Rocca companies face lawsuit over condo sales in Saint John, Fredericton
Suit alleges many units worth less than mortgages used to purchase them
A well-known Saint John developer is being sued by 40 out-of-province investors over real estate deals in Saint John and Fredericton.
John Rocca, the estate of his brother, the late Pat Rocca, several family companies, and a Montreal-area real estate investment promoter are named in the suit.
The investors allege they purchased condominiums at artificially inflated prices after the units and a number of promised extras were misrepresented by the sellers.
The suit claims more than $3 million in damages.
The condominiums in question are in five Saint John developments, including Harbourfront Residences and Waterloo Place Townhouses, and one building in Fredericton, Lincoln Heights Condominiums.
Most of the buyers live in Ontario but others are from British Columbia, Alberta and Quebec.
The 40 owners purchased a total of 57 units.
Their statement of claim, filed with New Brunswick's Court of Queen's Bench, describes a rental agreement that was purchased on top of the price paid for the unit itself.
Tenants in New Brunswick
It saw the new condo owner lease the unit back to a different Rocca company, Woodhollow Park Developments, for renewable two- to five-year periods.
Woodhollow would then rent the units to tenants in New Brunswick.
In early 2015 the company was placed in bankruptcy, leaving the condo buyers to find tenants on their own.
"Due to the various misrepresentations made by the defendants, the Plaintiffs now own units which are actually valued far below the mortgages being carried on those units," said the claim.
"Some of the Plaintiffs have been forced to sell their units at significant losses and are still carrying mortgages as a result of the Defendants' blatant overvaluation of their units."
The allegations have not been proven in court and are described as "false and outrageous" by John Rocca, who promised an aggressive defence.
The condo owners allege the units were "advertised, promoted, and sold" by Montreal-based real estate investment promoter, Marie-France Dayan.
Dayan owns a company called The Zen Investor.
Its website says Dayan is also a life coach.
According to the company's website, "Marie F. Dayan challenges her clients … she inspires them to deconstruct the paradigms of convention that serve only as barriers to financial success and spiritual fulfillment."
Dayan declined to answer questions, referring CBC to her lawyer, Robert Astell.
Astell claimed his client was involved only in marketing for Rocca companies and will soon be dropped from the list of defendants in the suit.
"All the representations [to the buyers] were done by the Rocca companies," said Astell.
The lawyer for the plaintiffs, Justin Fogerty, says Dayan is still a defendant in the case.
A web archive search of The Zen Investor website found a promotion for the Waterloo Place Townhouses in Saint John dating from March 2014.
It offers a "hassle-free investment with an attractive monthly Positive Cash Flow after all expenses are paid."
It describes secured rent that will return to investors from a triple-A tenant with zero vacancies in a "strong and stable Saint John market."
The statement of claim says rental cheques from the Rocca management company began to default around January of 2015.
The statement also said a promised designated parking spot and furniture for the units failed to be delivered.
John Rocca said the claimants in the suit are suffering from "buyers remorse."
"The vast majority of the individuals who purchased a condo had their condos appraised before the closing date by an appraiser picked by their bank," said Rocca.
"They had lawyers at home and in New Brunswick represent them and some had financial advisers."
Rocca describes the group as "experienced investors" who want to be reimbursed because the units are worth less today than when they were purchased.
"We will continue to aggressively defend ourselves," he said.