SkyCity condo buyers suing to get deposits back
Proposed class action alleges builder in breach of contract because of delays on Winnipeg project
Condo buyers are suing SkyCity Centre Winnipeg, claiming it has become "patently obvious" the company has breached the sale agreement because it can no longer meet the move-in date of October 2019, say court documents filed Monday.
A couple dozen buyers want their 10 per cent deposit back, said lawyer Richard Olschewski, who's representing buyers in a proposed class action lawsuit.
The long-delayed, $200-million condo building was supposed to be Winnipeg's tallest tower. Instead, the project site remains a surface parking lot at the corner of Smith Street and Graham Avenue.
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"There's a certain frustration that all buyers seem to share, and there's a patience that's run thin, and a need to do something about their investment," said Olschewski.
The lawsuit is the latest in a string of problems facing the company behind the project, Fortress Real Developments, based in Richmond Hill, Ont.
The RCMP's Integrated Market Enforcement Team raided the company's offices last month as part of an investigation into syndicate mortgage fraud. That happened after Ontario's financial services regulator issued $1.1 million in fines following an investigation into mortgage companies involved in financing SkyCity and other real estate developments by the company.
In addition, Fortress chief operating officer Vince Petrozza was ordered to stop brokering mortgages.
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The representative plaintiff, Sherif Sherif, put down $14,075 as a deposit on a 28th floor condo in October 2015.
"There's been very, very little in terms of communication from the developer in terms of what's happening next," said Olschewski. He found out that co-developer Edenshaw Developments pulled out of the project from a CBC News article, he said.
Olschewski said some of the buyers bought condos to move into at retirement while others simply wanted to be part of an exciting downtown project.
"Most of the purchasers had bought into the dream of SkyCity," said Olschewski.
Buyers he spoke to initially wanted to be patient, thinking there was potential the condo tower would become a reality.
"It's time to just call it what it is, and it's a project that is unlikely to move forward. It's time for the purchasers to get their deposits back," said Olschewski.
"You can imagine there would be this corresponding disappointment to learn that not only is their money tied up but their their plans are not going to materialize."
The lawyer acting as escrow agent for SkyCity said condo buyers don't need to worry about their deposits.
"I can tell you that any deposit funds that have been paid to this firm are still safely in our trust account," lawyer Doug Forbes, of Winnipeg's Thompson Dorfman Sweatman LLP, said at the end of April.
Fortress Real Developments did not respond to requests for comment.
The proposed class action is not certified and the allegations have not been proven in court.