Condo News
December 2012

Condo owners ask would-be renters to boycott building
Saint John couple say they were misled by developer
CBC News
20 Dec 2012

Residents of a condominium in uptown Saint John are calling on potential tenants to avoid renting units in the building.

Three years ago, Leon Hull and his wife Marlene, bought one of six renovated condominium units at 247 Germain Street with the expectation the rest would be sold to long-term owners like them and that an exterior wall would be fixed.

But since then, the developer has sold only one other unit, rented out the other four — and the wall still needs repairs.

The Hulls — who paid $200,000 for their unit — say they now feel misled and are asking renters to boycott the building.

"We've been here over three years now, it's still in the same state of disrepair," Leon Hull said.

"I didn't expect to be having to fight my golden years with a developer that wasn't honest with us."

But developer Terry Cormier said he's under no obligation to sell the units, especially in a stale market.

"I can't make the units sell, right? If I could I would have sold them a long time ago. I'd be happy to sell them. But I can't change the markets,” said Cormier.

He said he was left with no other choice but to rent them after they weren't moving.

Cormier also said he's in no rush to sell and will need to move all the remaining units before repairing the building's exterior.

Hull said he asked Cormier how he plans to do that and told him: "You have an obligation to us, number one, to keep those on the market.”

It looks like the Hulls are in a bad spot. The developer owns four units and the owners own two so they have no power what-so-ever. With his 60% majority, the developer can pass any bylaw and rules that he pleases.


The Trump Tower—A canary in a coal mine?
"Other than the fact that it has my name on it — which I'm not thrilled about — I have nothing to do with the company."
—Donald Trump   talking about Trump Entertainment Resorts Inc.

A Financial Post story on 26 December 2012 stated that the Trump International Hotel & Tower Toronto could be the canary in the coal mine warning everyone that the Toronto condo market is about to collapse.

I think that the Trump Tower troubles are in are all its own making and is not at all related to the residential condo market in the rest of the city.

Trump Tower
The Trump Tower is made up of two completely different types of condos. The top floors consist of 118 luxury residential condominium units that are similar to the expensive luxury suites on top of the nearby Ritz-Carlton, the Shangri-La Toronto and the Four Seasons Hotel. They are priced at $2.3M to $6.6M. The developer claims that 60% have been sold.

Underneath them, there are 261 condominium hotel rooms. These are commercial units (without kitchens) that pay real estate taxes at commercial rates. They sold for $967,000 to $3,100,000. Approximately 80% of these hotel rooms have been bought.

Some of the owners of the hotel rooms are disgruntled. They believed that they were going into the hotel business with Donald Trump and when they bought their units, several years ago, they were told that they would be making between 5% and 27% profit a year. They also claim that they would be able to easily get financing when they took possession.

Instead, the purchasers are finding it difficult or impossible to obtain mortgages on units that have been dropping in value. One owner states that he is losing $7,000 a month on his “investment”.

So some of the owners are suing the developer to get out of the deals as they thought they were buying safe investments that offered monthly returns. They also are upset because Donald Trump is not an investor in this property.

In return, the developer is suing some of the owners. The developer states that anyone investing a million dollars should be smart enough to know what they are getting into and that the purchasers were given all the proper documentation they needed to make a sound decision.

The Trump name
"There are plenty of bankers you could find that would not do business with Donald Trump again."
—Roger Gros   Publisher of Global Gaming Business Magazine."

It seems that the hotel condo purchasers thought that Donald Trump was a modern day King Midas. How little they knew. Donald Trump’s many business failures are listed on several Internet websites. The one that the hotel room buyers should have taken note of was the Trump Tower in Tampa.

Trump was on hand in 2006 for the ground breaking of a 52-story luxury apartment building that was going to redefine Tampa's skyline.

The project went bust in fairly short order. It later emerged that Trump wasn't even the developer of the tower. He recently told MSNBC: It was just a licensing deal. ... I licensed the name 'Trump' to those buildings. Investors are suing Trump to recoup some of the money they lost in the doomed project.

It looks like history may be repeating itself.


YouTube videos
20 December 2012

I have just added the first YouTube video onto the References–Videos page.
Take a look and see that newly constructed condos can have problems that the builder and the board will not repair.

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