Proposed Alberta condo legislation would 'bankrupt' industry, developer warns

A high-profile Canadian developer says he’ll stop building in Alberta if the government passes a proposed new condo regulation that calls for mandatory occupancy dates.

New regulation intended to protect condo buyers from long construction delays

The Infiniti On 105 development faced criticism from buyers when construction stalled two years after they bought their condos. (Trevor Wilson / CBC)

A high-profile Canadian developer says he'll stop building in Alberta if the government passes a proposed condo regulation that calls for mandatory occupancy dates.

But the head of a condo group that represents owners and consumers said if developers can't work within the proposed regulation, perhaps they shouldn't be building in the province.

The regulation is intended to protect those who buy condos in new developments from long construction delays. Currently, developers do not have to add an occupancy date to the purchase agreement, leaving buyers with little recourse to get their money back if they're unhappy with long delays.

The Alberta government's proposed legislation, expected to be tabled in the spring, would make an occupancy date mandatory for purchase agreements. If the unit is not ready one month after that date, the buyer would have the option to walk away with a refund, or renegotiate with the developer.

The government has said it consulted with stakeholders, the home builders association, developers and condo owners.
Brad Lamb says the proposed new condo regulation would force him to rethink building in Alberta. (CBC)

But Brad Lamb, a Toronto-based developer, called the proposed legislation a stupid idea, and said it would force him to rethink developing in the province.

"Then we would do zero business in Alberta," said the owner of Lamb Development Corp. "I'm going to tell you, that would bankrupt the development industry in Alberta. It would be a horrendous piece of legislation."

The legislation would have to contain provisions that would allow developers to have extensions, he said.

Lamb is currently developing three condominiums in Alberta — Jasper House in downtown Edmonton, and two projects in Calgary called The Orchard and 6th and Tenth.

He said the current economy in Alberta and rezoning permits have slowed down his Edmonton project. Lamb argued there are many reasons for project delays that are out of the developer's control.

We would do zero business in Alberta.- Toronto-based developer Brad Lamb

The proposed regulation won't work for developers, he said.

"It's far too risky. Thirty days is nothing in construction. Thirty days of delays could be a wet site that you had to de-water."

But Anand Sharma of the Canadian Condominium Institute's northern Alberta chapter has little sympathy for developers who oppose the proposed change.

"It's stupid that people are forced to put their lives on hold for a purchase agreement on a home because a developer is selling units before it has been zoned, for example," said Sharma. "If you want to talk about something that's unfair, and not practical, it's doing what the practice has been by some of these developers."
Anand Sharma, president of the Canadian Condominium Institute's northern Alberta chapter, says the proposed occupancy date regulation will even the playing field for condo buyers. (CBC)

Sharma said the time for consumer protection from long construction delays is past due.

"This legislation as proposed is a good step in the right direction, but there's more that can be done. Quite frankly, if you can't build in a fair and open manner, maybe you shouldn't be building in the province of Alberta."

The Canadian Home Builders' of Alberta has also been a part of the consultations that led to the proposed condo legislation.

"I think we've arrived at something that is fairly workable both for industry and consumers to make something that can work for everyone," said T. J. Keil, external affairs manager for CHBA Alberta. "I think there's probably a few i's to be dotted and t's to be crossed."

Keil said he knows some developers are nervous about the regulation because they rely on buyers to get financing from the banks for their projects. Letting consumers back out a deal may jeopardize that. But he said he thinks developers can still work within the new regulations.

"I think the more they learn about how we worked through this, details that have been kicked back and forth, the fact that government was willing to listen to the perspective of stakeholders, including ourselves, and include that in the regulation, they'll understand."

The proposed regulations are expected to go to cabinet in the spring.