In the market to buy a condo? Kitchener resident has word of warning before purchasing new builds

By cceolin

A Kitchener man says buying a condo in a brand new building should be approached with caution, after finding himself shelling out thousands of dollars on a unit he doesn’t legally own.

David Bruce says he recieved the keys to his unit at the Victoria Common condo building at 155 St. Leger Street in June of 2017.

But it’s taken two years for the building to be registered, and that means some of his condo neighbours have been paying what’s known as ‘phantom rent’ for just as long.

“It is a risk and reward type thing,” says Bruce. “I would consider myself to be in a better position to take that risk than someone that does have a full family and children. For me it’s more of a cautionary tale.”

Since purchase deals can’t close until the units are registered, new condo buyers like Bruce should prepare to pay this so-called phantom rent, which includes property taxes, the usual operating fees and interest on the outstanding balance owed to the builder.

Bruce expects he’s made monthly payments totalling $18,000 in the year he’s lived at Victoria Common. That money doesn’t count towards a mortgage either, because ownership lies with the developer until the final registration is complete — however long that may take.

“That’s really the frustrating part is that we can’t get a mortgage because technically the property doesn’t actually exist and you can’t own something that doesn’t exist,” Bruce says. “I’ve had about five pre-approval mortgages already and my interest rate has been climbing every single time.”

Queensgate Homes built the Victoria Common condos, and tells 570 NEWS the registration process began in 2016 when at least half the building was moved in, and as of Friday afternoon was finally complete.

It’s a process in which director of sales and marketing for the development Joey Tsang says the builder has very little control over.

“We would have loved for those closings to have happened [already] — it usually takes about six months from the time that we start until the full registration, and it has taken us longer than that,” says Tsang. “What I want to emphasize is that it’s not that the builder wants to hold out the registration nor the final closing.”

Bruce says he’s relieved this day has finally come, but hopes his experience will serve as a caution for those thinking about purchasing new builds.

“When you’re budgeting for a closing … and it keeps getting pushed out, it puts your life on hold because you don’t know when you’re actually going to have to spend that money,” he says. “It’s something I maybe wouldn’t do in the future.”

Top Stories

Top Stories

Most Watched Today