Ottawa condo owners fight back with class action against builder
Owners claim Theberge Developments tricked them into signing heating system rental agreement
CBC News
By Ashley Burke,
30 March 2017
An Ottawa woman has launched a $3-million class action on behalf of
more than 100 condo owners, claiming builder Theberge Developments Ltd.
failed to deliver on its promises and blindsided purchasers with hidden
costs.
Sabrina Heyde, 31, alleges the builder "tricked" her into signing an agreement to rent her forced air heating system.
She put a $20,000 deposit down on a two-bedroom unit in the Alta Vista
Ridge development on Everest Private, south of St. Laurent Shopping
Centre, in 2011. The building was not yet constructed at the time.
'It's an issue of being tricked, it's an issue of being lied to.'
—Sabrina Heyde, condo owner
Two years later Heyde was asked to meet with the builder to pick out
tiles and paint colours. She claims that during that meeting the
developer slipped the heating system rental agreement into a pile of
unrelated paperwork, and she signed it without realizing what it was.
Heyde and other condo owners now pay $89 a month for their combined
heating system and hot water tank, a cost some of them claim was never
disclosed by the developer.
"It's an issue of being tricked, it's an issue of being lied to," Heyde said.
Theberge disputes the claims of breach of contract, breach of the
Condominium Act and negligent or fraudulent misrepresentation, and
intends to file an appeal to have the case thrown out.
Kevin Marshall says he never signed his agreement to rent a heating system for his new condo. (Ashley Burke/CBC News)
'We just got stuck with it'
Experienced real estate investor Kevin Marshall claims he never signed the agreement to rent a heating system.
"We just got stuck with it," said Marshall, who also sits on the condo board. "It was unknown and it wasn't explained."
Marshall has purchased five investment properties including a triplex
and a four-unit building, and said furnaces have always been included.
Marshall said he went to a lawyer to try to get out of the condo purchase, but claims Theberge refused.
Valeda Babineau and Joe Corkery said they feel "cheated" and "deceived"
by Theberge. The couple is nearing retirement and recently decided to
downsize to a condo.
"We were lied to," said Babineau. "We didn't know that when we
purchased we were going to have to pay an extra $89 a month...
Otherwise I think we would have thought twice about purchasing."
Babineau and Corkery said they were told about the heating system
rental during their upgrades meeting and were so upset they also went
to a lawyer to try to get out of the deal.
The couple said they spent $3,000 in legal fees, but couldn't get out of the purchase.
Builder promised storage lockers
The lawsuit also accuses the developer of reneging on a promise to
provide more than 60 condo owners with storage lockers, even though the
lockers were included in their original purchase agreements, according
to court documents.
The company blamed a drafting error in an original contract, which stated storage lockers were included in the purchase price.
"I would have not purchased the place without storage," said Babineau.
"They manipulated us," said Corkey.
An Ottawa judge certified the class action earlier this month. Justice
Robert Smith wrote in his decision that purchasers "were in a
vulnerable position when dealing with the developer," and said they
either had to close the transaction and sue for damages, or forfeit
their deposits.
The Law Foundation of Ontario has reviewed the merits of the class
action and is covering the costs of the case under its class
proceedings fund.
Theberge disputes claims
Class actions against condo developers are a growing trend in Toronto,
where the market has been booming for years, but it's believed this is
the first lawsuit of its kind in Ottawa.
According to a statement submitted by Theberge Developments president
Joey Theberge, Reliance Home Comfort approached him in 2013 and sold
him on the idea of a rented heating system.
Theberge Developments Ltd. plans to appeal an Ottawa judge's decision to certify the class action lawsuit. (Danny Globerman/CBC)
According to court documents, Theberge tasked his agent with speaking
to buyers about the rental fee at upgrade meetings so they had an
opportunity to ask questions or raise concerns.
"I wanted to ensure that each purchaser understood and accepted the rental fees," he wrote.
"If almost every purchaser had not executed the rental acknowledgement,
I would have not have installed the ... system," he wrote in his
submission.
Joey Theberge did not provide CBC News with an interview by the
deadline provided, but did a provide a statement, in which he claims he
"offered to install storage prior to this litigation at no cost to the
home buyers as a goodwill gesture."
Past and present condo board members say condo owners have yet to be presented with this offer.
Heyde said she hopes the lawsuit encourages other condo buyers to stand up to developers.
"This is the only way really to stop them from doing it," said Heyde."
This Reliance Home Comfort heating system is at the centre of the lawsuit. (Ashley Burke)
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