A B.C. Supreme Court judge has ruled that 40 buyers of units in the troubled Murrayville House condo project in Langley will not be able to purchase them at the original price.
It is a setback for the people who signed agreements to buy units in the 92-unit condo at 5020 221A St. that was placed into receivership in October.
The court-ordered receivership came after months of wrangling between the builder and various creditors that has prevented buyers from moving in.
The Bowra Group Inc., the court-appointed receiver in charge of untangling the troubled condo project, has reported that the builder of the complex owes at least $62 million to various creditors.
Bowra also said a number of the units in the four-storey wood frame condo at 5020 221A St. have been sold more than once, with 31 units sold twice, 12 units sold three times and one unit had been sold four times.
The receiver recommended 40 of those 149 deals should be recognized and the buyers ought to be allowed to complete the deals.
The issue was a “complex” one, the judge said, but it came down to the rights of the creditors, who would get more back, if the units were sold at current market rates versus the rights of the people who signed presale agreements more than two years ago at prices below current rates.
“The Receiver is directed to disclaim the 40 pre-sale contracts that are the subject of this application,” said the written decision released by Justice Judge Shelley Fitzpatrick today.
“Further, the Receiver is directed to take immediate steps to remarket and sell these 40 units as soon as possible, subject to legal requirements, and subject to court order.”
The decision noted that one of the lawyers suggested buyers should have a right of first refusal in respect of their units.
“This seems a reasonable proposal and one I would adopt,” the judge said.
Fitzpatrick said while “some sympathy is in order for the purchasers in these circumstances … I am satisfied that the equities in favour of the pre-sale purchasers do not justify overriding the mortgagees’ legal priority and giving the purchasers a preference that they would not otherwise enjoy.”
Several buyers have been house-sitting and renting rooms in hotels and bed-and-breakfasts while they wait to move in.
Other have gone ahead and bought other condominiums to avoid being priced out of the market.
One of the buyers, Nolan Killeen, called the decision”shocking” and said it shows how little protection consumers have.
“Where’s the regulation?,” Killeen said.
“There’s nothing. It makes me sick to my stomach.”
Killeen, who speaks for a group of about 40 Murrayville House buyers (not all of them among the 40 that were subject of the court decision), said the decision will add $100,000 to $200,000 to the price of units if buyers decide to proceed according to the right of first refusal decision.
Killeen said some sales agreements were signed as far back as the fall of 2015, when some one-bedroom units at the project were selling for as little as $199,000.
He doubts the decision will be appealed.
“The big fish are going to win.”