Another 24 homebuyers who have partially-constructed units must decide whether to keep their contracts in place or terminate those deals and pursue insurance claims.
An Ottawa judge gave Eastboro’s receiver the green light Thursday to sell the troubled Orléans development while offering 24 homebuyers a glimmer of hope they might hold onto their properties.
Ontario Superior Court Justice Calum MacLeod approved the receiver’s request to sell phase two of the Eastboro development and to terminate the contracts signed by 90 homebuyers.
The 65-acre development is zoned for 985 housing units and will be sold to maximize the return for creditors left in the lurch by the failure of Ashcroft Homes’ Eastboro subsidiary.
The 90 homebuyers who will have their contracts terminated own properties that have not been built.
Another 24 homebuyers who have partially-constructed units will now have to decide whether to keep their contracts in place — in the hope that a new developer will honour their deals and finish their homes — or terminate their contracts and pursue insurance claims to recoup their deposits.
Court heard Thursday that Ashcroft Homes spent most of the deposit monies from the 24 buyers to build their homes.
It means the buyers will have to pursue claims with Tarion, the consumer protection organization that administers the Ontario New Home Warranties Plan Act, to recoup their deposits.
Fraser Mackinnon Blair, the lawyer for receiver MNP, told court that Ashcroft Homes spent $1.9 million of the $5.3 million it had secured in deposits for homes in Eastboro. The receiver, he said, had not been able to confirm how Ashcroft spent that money.
Evening Update
The Eastboro sales process is expected to last at least four months with a tentative deadline for bids set for May 31. A final sale will be subject to court approval.
That means it will be months before the 24 Eastboro homeowners find out if the new buyer will honour their agreements or offer them new terms to retain their homes. The buyer could also ask the receiver to terminate those sales agreements.
Blair said the receiver did not yet know if “there’s an appetite to complete the construction of the partially constructed units, nor what terms a buyer might require to do so.”
Any developer that purchases Eastboro, he noted, will have to complete a $15-million stormwater management system before the City of Ottawa will allow anyone to live in the subdivision.
Eastboro homebuyer Chantal Bergevin, who owns a partially constructed unit, told court Thursday that the fiasco had been “devastating to me and my family.”
“My entire life has been on hold for the past six years,” said Bergevin, who also told court she was repeatedly lied to by Ashcroft about the state of the development.
“We were not provided with the information we needed to do our own risk assessment … This is extremely unfair to me, my family and all of the unit buyers, so I’m hoping something can be done to help us and at least ensure we get all of the money back that we put into this.”
Bergevin, a single mother and federal public servant, put down a 10-per-cent deposit on a $375,000 townhouse in November 2018 and later paid $11,000 for upgrades to the property.
In an interview, Bergevin said she didn’t know yet if she’d terminate her contract or hold on in the hope that a new developer would honour it. She’s doubtful a new buyer will help.
“We’re the real victims here, but nobody cares. We’re left to fend for ourselves,” she said. “I don’t think it’s feasible for me to continue to hope that another builder will purchase Eastboro and be willing to sell me the house at the price I bought it for.”
Anne Clarisse Ndjou’ou, 50, a single mother and federal public servant, put down a 10-per-cent deposit on a $675,000 home in Eastboro in January 2020.
She has been living in Rockland while waiting for her home; her son goes to school in Orléans. “We have been waiting for all this time and having hope that the house will be built,” she said. “I think it’s so unfair. Someone needs to be accountable: They can’t just treat us like this.”
Ndjou’ou is worried that she won’t be able to buy into today’s real-estate market after losing out on five years of equity in her new home.
“I can’t afford the current market, it’s so expensive,” she said. “Every day, every night, I’m thinking about options, but it’s a nightmare. I don’t want anyone to experience this.”
In October, Ashcroft’s Eastboro development was sent into receivership after the company defaulted on an $80-million loan from RBC. RBC said Ashcroft failed to make $4.85 million in interest payments and could not offer a satisfactory plan for restarting the stalled project.
The Eastboro project is on land bounded by Navan Road, Renaud Road and Mer Bleue Road.
After several delays, work on the project began in 2021, but it ran into more trouble in January 2022, when workers digging a trench for a stormwater sewer encountered soft, marine clay. Work was halted, and engineers eventually proposed costly changes requiring a different route beneath Navan Road.
