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Urbancorp was one of Toronto’s most prolific and respected developers. When the company filed for bankruptcy protection last April, nearly 200 pre-construction buyers lost their future homes and their best chance to break into the market. Anatomy of a real estate disaster
Patrick and Jessie Hooker weren’t planning to buy a house. It was April 25, 2015, and they’d accompanied Patrick’s sister, Jessica, to a sales centre in a former public school near Lawrence and Black Creek Drive. Jessica had bought a home from Urbancorp, a property developer with a 24-year track record of building moderately priced condos and townhouses in the GTA. Her home was to be part of a cluster of 88 supermodern townhouses, semis and detached homes called Ravines on Lawrence. Patrick and Jessie had given her a lift there to sign the papers.
Patrick, a geophysicist, and Jessie, a software engineer, are both in their mid-30s. He has a Bunyan-esque build and a calm, frank demeanour; Jessie, who was born in Malaysia, has dark, shoulder-length hair and an easy smile. At the time, they were living in a rented condo in Fort York. They were happy there, but they knew there wasn’t enough space for a child, let alone Jessie’s mother, who they expected would one day move in with them.
Inside Urbancorp’s sales centre, the Hookers walked through the sleek model suites. There was an open-concept living room with wood-veneer floors. New appliances gleamed in the kitchen. They were dazzled by the premium finishes, the spacious layouts, the high ceilings. While they waited, an Urbancorp salesperson approached them with some news: a buyer had backed out of a deal to buy a $580,000 four-bedroom townhouse just two doors down from Jessica’s. If the Hookers acted quickly, they could reserve it for themselves.
Fearing that another buyer would snatch it up, they scribbled out four post-dated cheques on the spot, for a total of $58,000. Before they knew it, they’d spent nearly all of their savings on something that didn’t yet exist. The scheduled occupancy date for their new home was October 2017, two and a half years away.
They moved out of their condo and into a two-bedroom apartment in Jessie’s sister’s basement in Richmond Hill, hoping to save money for their down payment. For the next few months, they commuted an hour each way to their jobs downtown. In January, they found out Jessie was pregnant—they were glad they’d had the foresight to lock down a large family home.
One day last April, a year and a half before they were supposed to move in, Patrick was reading a discussion thread on BuzzBuzzHome, a website that tracks new housing developments. There was a rumour circulating that Urbancorp was in financial trouble—that the company might be on the verge of filing for bankruptcy protection, which would jeopardize all of its unbuilt projects. “At first, I thought, Oh, it’s just some random thread on the Internet,” Patrick said. “It can’t be true.” But it was, and the full story was worse than they could have imagined.
When a buyer places a deposit on an unbuilt condo, a developer is required, under Ontario’s Condominium Act, to either insure the deposit or hold it in a trust account, so the money can be refunded if the project is cancelled or delayed. But the Hookers’ townhouse was freehold, which meant the Condominium Act didn’t apply to them. When it comes to freehold properties, developers can do whatever they like with buyers’ deposits—and Urbancorp had taken advantage of that freedom. The Hookers’ $58,000 was gone, and so were the deposits of 180 other buyers across the GTA.
The man behind Urbancorp’s precipitous rise and rapid fall is Alan Saskin, the company’s founder and president. He and his wife, Doreen, live in a $6-million Yorkville condo that has a library; three bedrooms, including a master suite with a spacious dressing room; and a private terrace large enough to host dozens of guests. Down in the parking garage, Saskin keeps a Tesla and an Aston Martin.
The Saskins take lavish vacations—one recent trip included stops at Machu Picchu, Easter Island, Angkor Wat and the Taj Mahal. Saskin goes to Art Basel every year and has at least one original Jean-Paul Riopelle in his personal collection. Over the past few years, he and Doreen have donated money to the symphony and the ballet, and he served as chair of the Artscape Foundation’s board of directors. In 2014, his daughter Jyll had her wedding at the Art Gallery of Ontario. Her husband, Phillip Gales, later became Urbancorp’s CFO.
Saskin originally studied architecture at McGill but quickly realized there was more money to be made in development. He earned his MBA at Harvard in 1981, then climbed the ranks of the Canadian real estate industry. He worked for Cadillac Fairview before decamping to York-Hannover, a smaller company, where he became a vice-president. According to former colleagues, Saskin was a strategic thinker who could see opportunities where other people didn’t, but he also had a daredevil streak. For a time in the 1980s, he made a hobby of shorting stocks on the TSX.
By 1990, Saskin was an executive VP at Camrost, a large commercial and residential developer. After a dizzying five-year rally, the housing market had entered a slump. The average price of a single-family home in the GTA was plummeting. Development giants struggled to refinance debt in a flailing market, and some collapsed into bankruptcy. Toronto developers found themselves sitting on parcels of land they couldn’t use.
Most people looked at this state of affairs and saw devastation. Saskin saw a gold mine. Home prices were depressed, but so were land prices. If he could buy up cheap real estate, he could build inexpensive homes, which are popular with first-time buyers, even in times of economic distress.
Saskin left Camrost with Ann Martin, who had worked under him as a senior project manager, and together they launched Urbancorp. His first move was to buy a small parcel of farmland in Richmond Hill; it was relatively cheap and had already been rezoned for 300 housing units. Saskin advertised stacked faux-Georgian townhouses for as little as $99,990 apiece, and young families lined up at the sales centre to place deposits. Urbancorp had found a way to make money on real estate when it seemed like there was none to be made.
The success of that first development earned Saskin credibility among financiers, allowing him to set his sights downtown, where he developed two projects on St. George Street: Sloane Square and Lennox Mews, which won Urbancorp glowing press. “For people who want a solid roof over their heads in a nice neighbourhood at a decent price, the company is doing everything right,” the Globe’s John Barber wrote in 1993. “All Urbancorp needs now is some competition.”
Within a few years, Toronto’s housing market had begun to recover. As the industry regained its confidence, Urbancorp started developing low-rise and mid-rise projects throughout the GTA. By 1998, the company had become the fifth-largest builder of new homes in the GTA, and it had made a major land purchase that would change the city: an ex-industrial site on King, west of Bathurst. Saskin turned some of the real estate into King West Village, a cluster of townhouses that initiated the area’s transformation from a grimy manufacturing district into a destination for young urbanites.
As Urbancorp grew, the company began aggressively pursuing taller, denser buildings. The denser the project, the more revenue. But Urbancorp would often sell units before they’d been approved by the city, which strained relationships with customers. In 2000, one buyer put a pre-construction deposit on a condo in Urbancorp’s Electra Lofts on King West only to discover that her unit had been removed from the floor plan during the approval process.
The constant tug-of-war with the city also jammed up the company’s construction pipeline. In 2002, new occupants of South Beach Marina Townhomes, an Urbancorp project on Queens Quay West, discovered that their building had a major omission: when one couple opened a door in their unit that was supposed to lead to the building’s elevator, they found an open shaft that ran all the way down to the garage. The elevator was installed a month after they moved in. Several years later, realtor David Fleming went to inspect a suite he’d purchased at Urbancorp’s Westside Gallery Lofts on Sudbury Street. He found chaos. His loft was a bare-concrete tomb with flaking walls and pipes poking through jagged holes in the ceilings. He made a video of himself exploring the wreckage and posted it on YouTube, where it racked up views among other realtors and developers.
Saskin declined to be interviewed for this story, but, according to one former employee, Saskin and Martin argued over their dealings with city hall. Martin was increasingly dissatisfied with the quality of the homes. She finally resigned. By the mid-2000s, the company’s credibility was eroding. “Urbancorp’s nickname in the industry is Urbancrap,” said realtor Carl Langschmidt. “They were a company that just delivered shitty units.”
In 2010, despite Urbancorp’s floundering reputation, Saskin went on a buying spree. Over the next five years, his company snapped up properties in Leslieville, King West, Downsview, Corso Italia and the Bridle Path. The projects were still selling, and the future looked bright.
Because developers only collect deposits on pre-construction homes, they usually have to finance their projects with outside money. A developer with good credit and enough capital to make a large down payment can generally get a mortgage for two to three per cent above the prime rate. If a developer can’t get one of those loans—or if he can only get enough to partially finance a building—he can make up the difference by tapping into a vast pool of money controlled by mezzanine lenders, who are often willing to make loans that banks won’t. As a result, they demand high interest rates, usually in the range of eight to 15 per cent. These lenders often exude the swashbuckling confidence of people who stand to gain no matter what becomes of a project. If a development runs into trouble, they can simply take it over and sell it for parts.
Urbancorp relied heavily on mezzanine debt during its spending spree. One company, Terra Firma Capital Corporation, financed large swaths of Urbancorp’s land purchases starting in 2012. The loans allowed Urbancorp to acquire more and more land, but, in the process, the company took on a huge debt load. While bank lenders usually only finance between 50 and 75 per cent of the land purchase value, Urbancorp was often using a combination of Terra Firma’s loans and bank loans to finance up to 95 per cent of the land purchase price.
By 2012, the company had two new projects underway near Queen and Dufferin: Epic on Triangle Park and Edge on Triangle Park. The land was already zoned for three 14- to 16-storey buildings, but Saskin wanted taller towers, for the same reason developers always do: more floors mean more units to sell. If he could convince the city to give him more density, it would set the stage for a significantly bigger payday.
Urbancorp managed to get the city’s approval for towers that ranged from 19 to 22 storeys, but the projects, already delayed by the wait for rezoning, ran into holdups and cost overruns during construction. “His construction department was horrendous,” said a former colleague. In one instance, a $3-million construction contract ballooned to about $6.5 million, as the contractor piled on extras that Urbancorp executives had failed to price into the original deal.
In the east end, the company encountered similar problems. At 50 Curzon Street in Leslieville, Urbancorp had pre-sold 55 townhouses. Among the buyers were Elaine Quinn, a civil servant with the province, and her husband, Howard, a marketing manager at Manulife Financial. In June 2011, they put a 10 per cent deposit on a $610,000 home with stone countertops, hardwood flooring and nine-foot ceilings. They expected to move in by February 2013. Five months after they put down the payment, Urbancorp mailed the couple a notice saying that their occupancy date had been pushed back to October 31, 2013.
The Quinns were worried. They’d recently had a baby, and they weren’t certain where they’d be living when he started kindergarten. Three delay notices later, Elaine called Urbancorp’s management office, where someone in customer relations gave her a firm occupancy date of February 20, 2015. The couple sold their Leslieville house, intending to use the proceeds to finance the purchase of their new townhouse. But, within weeks, Urbancorp had pushed their occupancy date back to August 2015. The company blamed the city for dragging its feet on installing water service.
Meanwhile, 50 Curzon Street was facing another set of problems. According to a former site superintendent who worked on the development, the project started to unravel mid-construction. The crews stopped showing up for work, and the reason was simple: Urbancorp wasn’t paying them. In September, their bosses began flooding the property with construction liens. “We must have spent six months there, doing nothing,” said the superintendent.
The company wasn’t completing projects, and costs were mounting. In fall 2014, pre-construction purchasers at an Urbancorp townhouse development in Etobicoke discovered their houses had been downsized because the original plans hadn’t received approval from city council. Many buyers tried to back out of their sales agreements after two years of delays only to learn that Urbancorp wouldn’t refund their money for months. When the developer finally did issue refund cheques, it warned the recipients not to cash them right away. In January 2015, the company abruptly cancelled Kingsclub, a condo development near Liberty Village that was under construction. The project was supposed to contain 639 units, but Saskin had only managed to pre-sell about 180.
Buyers at Urbancorp developments across the GTA were noticing a disturbing lack of activity at the construction sites where their new homes were supposed to be built. In Markham, there were still trees on a lot where 28 homes should have been completed within a few months. At St. Clair and Caledonia, where 41 more homes were originally scheduled for completion in late 2016, Urbancorp had only just started demolishing the vacant school on the site.
It was around this time that Patrick and Jessie Hooker visited Urbancorp’s sales centre on Lawrence Avenue. Like most pre-construction buyers, the Hookers assumed that the strength of the city’s housing market would shield them from disaster. They belong to a generation that has never lost money on Toronto real estate. But the market hadn’t failed them. Urbancorp had.
When Urbancorp buyers placed deposits on their homes, many of them regarded the money as down payments. In reality, deposits function more like loans. Each payment on a pre-construction home is pooled with the deposits of all of the other buyers of that development. And so, when buyers hand over their post-dated cheques at a sales centre, as the Hookers did in April 2015, what they’re actually doing is advancing the developer money, at little or no interest, which the developer can then use to get more financing—or, in the case of a freehold home, to spend on whatever he wants.
What buyers get in exchange for their money is not a home, or even an ironclad promise of one; a deposit entitles a pre-construction buyer to nothing more than a signed agreement of purchase and sale, which is written by the developer with his own interests in mind. The developer usually has latitude to make changes to the design of a unit; a buyer may show up on inspection day to find a side door missing, an unexpected set of steps to the front door or the entire unit built as a mirror image of the original floor plan. Developers often reserve the right to change the types of materials used without notice to the buyer, meaning the completed unit may look different from the model suite. A developer may even have the ability to cancel a project altogether.
When developers fall short of their obligations, there’s one organization that’s supposed to keep them honest: Tarion, the private, not-for-profit corporation that enforces Ontario’s New Home Warranties Plan Act. By 2015, Tarion had started to worry about Urbancorp’s troubles. The staff met with the company several times and asked to send in a forensic accountant to review Urbancorp’s books, but, as a non-government corporation, it had no formal investigative power. Urbancorp was free to refuse—and it did.
The pre-construction deposit, which homebuyers regard as sacrosanct, is surprisingly insecure. Tarion protects buyers against the loss of their deposits through government acts, but only to a degree. The legislation covers up to $20,000 of a condo down payment, which has to be held in trust. The coverage for freehold deposits, which don’t have to be held in trust, is higher, at $40,000, but most deposits exceed that amount. As 10 per cent of a property’s purchase price, a $40,000 deposit would barely cover a one-bedroom apartment in Toronto, let alone a single-family home. To recover anything in excess of $40,000, a buyer has nowhere to go but the courts. The bulk of Urbancorp’s townhouse developments were freehold—and most of the buyers I spoke to had no idea their deposits weren’t fully protected until it was too late.
By 2015, Urbancorp had invested in at least 17 different pieces of land in five years. Only two developments had been completed, and the company was hemorrhaging money as it tried to keep up with its debts. Among its holdings were nearly $16 million worth of deposits from homebuyers at five unbuilt townhouse developments.
Saskin’s existing loan options were no longer sufficient. He needed new and cheaper financing to sustain the company until developments were complete enough that Urbancorp could start collecting full payments from buyers. Only then would he be able to clear his debts.
He decided to tap into a popular source of interim capital: the Israeli bond market, which had gained a significant presence in North American real estate financing during the economic collapse of 2008. By 2016, U.S. real estate companies had raised $2.4 billion (U.S.) from Israeli bondholders. For developers, Israeli bonds come at much lower interest rates than mezzanine debt, but they’re ridiculously complicated to engineer. To issue bonds in Israel, a developer has to submit to financial audits and write a complex prospectus that describes his assets and what he intends to do with the money. The principals of the company usually travel to Israel for what’s known as a roadshow, during which they meet with money managers and investors. Several of Urbancorp’s loans were coming due in 2016, and it was unlikely that the company would be able to build homes quickly enough to pay them off. Saskin would have seen the Israeli bonds as the only way to refinance his debt.
He created a new company whose sole purpose was to hold all the projects he was about to peddle to Israeli investors. The new corporate structure included most of Urbancorp’s pending developments but excluded three troubled east-end projects, whose presence may have raised red flags. Saskin also committed to inject $12 million into the company. The prospectus made no mention of Urbancorp’s escalating conflict with Tarion. “The investors in Israel never bothered to inquire what Urbancorp’s status was with Tarion,” says Howard Bogach, the watchdog’s CEO. “Had they inquired, we would have told them that there were concerns.” Saskin travelled to Israel for the roadshow and met with potential investors, with huge success. “Out of all the people we visited on our roadshow, only one had googled us,” an incredulous Saskin told a colleague upon his return.
On December 14, 2015, the newly reconstructed Urbancorp Inc. made its Israeli offering. The bonds were worth 180 million shekels, or about $64 million (Cdn.), and Israeli mutual funds gobbled them up. The money bought Saskin some badly needed time. Urbancorp received $58 million from the bond issue and used most of the funds to pay off existing loans. Saskin had managed to satisfy some of his Canadian lenders, but, in exchange, he’d invited an army of Israeli mutual fund managers and securities regulators into his business.
For the moment, they were satisfied with him, but that didn’t last long. Within days of finalizing the bond issue, Urbancorp registered at least two more loans. Two months later, it defaulted on a $5-million 2014 loan from Terra Firma and Laurentian Bank that had come to maturity. The lenders quickly set about making a series of increasingly dire legal threats. At the same time, homeowners at The Bridge, a 534-unit condo tower, sued Urbancorp and Tarion over a long list of unaddressed construction problems, including shoddy balcony concrete, improperly installed wall cladding, and faulty wiring and elevator systems. As Urbancorp continued to collapse, Tarion’s leadership decided to use one of the most coercive weapons in its arsenal: it moved to revoke the company’s registration, which would bar 17 Urbancorp companies from building and selling homes.
In late March, the bad news reached Israel. The bond market there had recently been rattled by a plunge in the price of Extell bonds over fears the New York luxury condo market was becoming oversupplied. Into this jittery environment, Urbancorp fired a bottle rocket: it finally disclosed its problems with Tarion, and Saskin admitted his initial failure to make the $12-million capital injection into his company that he’d committed to in Urbancorp’s prospectus.
The reaction was swift and furious. The value of Urbancorp’s bonds dropped by 53 per cent in a single day, and the Israeli lenders initiated a class-action lawsuit. They accused both Saskin and Urbancorp of breaching disclosure and reporting duties. When Urbancorp finally released its 2015 financial report, it projected a $15-million loss in the fourth quarter. The bond price immediately plunged again.
Rather than wait for its bondholders to react, Urbancorp turned to the Canadian courts, filing for bankruptcy protection for eight of its subsidiaries. The move blindsided investors in Tel Aviv, who had expected Urbancorp to use the Israeli court system. Coincidentally or not, Urbancorp’s insolvency filing happened on the first day of Passover. An Israeli judge had to be summoned out of recess to deal with the mess.
Urbancorp eventually sought protection for 24 of its companies. Another three were thrown into receivership when a consortium of construction lenders took the company to court over $27 million in unpaid debts. Saskin also filed for personal bankruptcy protection—a career nadir for a man who had once been hailed as a visionary. At the time of Urbancorp’s collapse, it had 1,058 homes under construction in the GTA.
In a press release, Urbancorp tried to tamp down hysteria among its buyers. “We determined, after much consideration and consultation, that a court-supervised process is the best way to deal with current cash flow issues,” Saskin said. “The court process is intended to ensure that, with our partners, we will be delivering these homes in the next two years.” It’s possible that Urbancorp would have been able to build some or all of those homes if its Israeli creditors had been in a forgiving mood. They weren’t. At a meeting of the bondholders, they voted to demand immediate repayment of their misspent shekels. The quickest way for Urbancorp to satisfy many of its creditors—which included not only the Israeli lenders but also Scotiabank, CIBC, a few smaller banks, dozens of pissed-off contractors and Terra Firma—would be to sell off the company’s undeveloped land for whatever it was worth. The company would have to convince a court to set aside existing sales agreements—no land buyer would want to sell new homes at five-year-old prices.
Urbancorp’s buyers were stunned. Not only had their deposits been spent but they might not be fully recoverable. By tying up their deposits for years, Urbancorp had robbed them of both money and time. There were a number of loans between the company’s subsidiaries, leading to confusion about which buyers’ deposits had gone where. Buyers at four of the townhouse developments attempted to band together. Ontario law offers no formal support system to pre-construction purchasers who have been burned by a developer, so they found each other the way everyone does: online. They formed Facebook groups, and traded news and rumours gleaned from around the web. “This waiting is emotionally exhausting,” one person wrote in August. “I still don’t understand why this isn’t a criminal matter.” Their hope stayed alive until September 15, when Ontario Superior Court Justice Frank Newbould authorized Urbancorp’s court-appointed monitor to sell six of its properties, free of any obligations to pre-construction buyers.
Loraine Adal-Salmon and her husband, Anthony Salmon, told me they were looking forward to giving their children, five-year-old Isabel and seven-year-old Olivia, separate bedrooms in the family’s new semi-detached house in Urbancorp’s Manors of St. Clair West development. The girls had been bunking together in a guest bedroom in the family’s cramped townhouse. As Urbancorp tore down a school to make way for their future neighbourhood, the Salmons regularly visited the construction site. In April 2016, when they learned Urbancorp was insolvent and their $81,000 deposit had been spent, they kept the bad news from their daughters for weeks. “We’d been planning where our coffee maker was going to be,” Loraine said. “We believed our contract was a guarantee that we were getting our home.”
Another couple, Justin Polce and Anna Maria Pedace, put a $68,000 deposit on a semi-detached home at Urbancorp’s Lawrence Avenue development in 2013. The couple were in their late 20s at the time and still euphoric from their wedding a few months earlier. The semi seemed like a remarkably good value. Urbancorp promised hardwood flooring, a finished basement, and an iPad-controlled smart-home system.
Polce, who works in urban planning, started to worry a few months later, when he saw that Urbancorp hadn’t advanced its rezoning application for a year. When the couple found out they would likely never get their house, they were gutted. “If we had known even three years ago that this was going sour, it would have been easy to look for a smaller home at the same price,” Polce says. “You can’t do that in 2016.” The Urbancorp fiasco has warped the contours of their married life. The couple had hoped to have a child by now, but their condo isn’t big enough. They’ve been scouring the north end of the city for properties in the same price range as their Urbancorp townhouse with no luck so far. The average price of a new low-rise home has jumped 33 per cent in the past three years, from $654,147 to $937,689. “Our future is up in the air,” Polce says.
At Urbancorp’s half-completed Curzon development, 45 buyers joined forces and hired lawyers to represent them. It’s expected that the new owner of the land will charge each Curzon buyer a $200,000 premium on top of the purchase prices they negotiated with Urbancorp in 2011. In the meantime, their homes remain half-completed shells in a mud-encrusted construction site, cordoned off with graffiti-covered hoardings. Signs on the perimeter fence warn passersby to stay away.
For Patrick and Jessie Hooker, who have moved out of Jessie’s sister’s basement and are renting a two-bedroom condo downtown, losing their future home meant renting indefinitely. Four-month-old Nathan has his own nursery, but the living room, already crowded with furniture, has little space left over for the deluge of baby gear and toys yet to come. Their rent is about the same as the mortgage payments would have been on their townhouse.
“We’d love to look for a new home, but there’s no point,” Patrick said. “We can’t do it without the money we lost.”
In the months since Urbancorp’s problems became public, Alan Saskin has retreated from public life. He resigned from his spot on the Artscape board of directors and pulled back from the day-to-day management of his company, allowing a court-appointed monitor to handle many aspects of the business. He’s now Urbancorp’s sole officer. Everyone else resigned, including Phillip Gales, Saskin’s son-in-law.
Saskin’s reputation as a businessman is permanently tarnished. He has been struggling to avoid personal bankruptcy. According to court filings, he has no income, and his expenses are being paid out of family trusts or out of Doreen’s pocket. The insolvency proceedings have put a pause on any lawsuits against him and Urbancorp, but it’s only a matter of time before those legal battles resume. Tarion is suing him and Urbancorp over $146,000 in unpaid warranty claims, and the Israeli class-action is still pending.
Urbancorp’s shafted buyers are no longer customers: they’re creditors. They’ll have to wait in line to recover what’s theirs. Among the first to be repaid will be the insolvency monitors, banks, contractors, mezzanine lenders and bondholders who have registered legal claims against Urbancorp’s assets. Whatever is left will go to the pre-construction buyers.
There may be a silver lining. Urbancorp hasn’t gone bankrupt yet, and its raw development land has gained so much value in the past few years that the sale proceeds might cover most of the company’s debts, allowing it to refund buyers’ deposits and even potentially go back into business. As real estate prices continue to rise, condo-dwelling young professionals might be willing to ignore the company’s financial troubles for the opportunity to break into the market. Patrick Hooker, for one, is keeping an open mind. “This hasn’t deterred me from buying pre-construction,” he said. “Maybe I’ll do a bit more research into the builder next time.”
Correction
January 5, 2017
In a previous version of this article, the developments were incorrectly placed on the map.
Thank you for writing this piece and bringing this subject to more light.
Interesting story, except a key point is omitted. Many of the projects were in negotiation or had LOI’s in place to be purchased with existing depositors.
Problem is the land came with the depositors who had paid 3-5 year old market value. The land has now been sold and there are millions of $$ in surplus, Saskin used receivership to unlock $30+ million in value by shedding the depositors and is going to come out of this with a huge payday potentially.
Thats the real story that should be written!!!!
836 St Clair was sold for $9.2mm
1780 Lawrence St W was sold for $23.2mm
944 Queen Street West was sold for $14.1mm (but that was last year)
Bridal path site was sold for $25.88mm
425 Patricia was sold for $16.8mm
15 Mallow Road was sold for $21.3mm
19 Innes Avenue & 177 Caledonia Road was sold for $15.150mm
9064, 9084, 9100 and 9110 Woodbine Avenue was sold for $13.3mm
So in total he sold off $138.93 million worth of land. He should be able to pay back the Israeli Bond holders and other debtors but you’d have to calculate all the debt holding, really a sad situation for the purchasers. But I can’t believe they wouldn’t do research on the builder before you buy. When I bought pre-construction I met the builder personally and went and saw all his other projects and found out his reputation from other builders.
To this date, I would never buy pre-construction unless it was from Tridel, Hines, Daniels, Madison, Mattamy, Mikmada, Curated Properties, Adi Developments, Carlyle communities, Sorbara. Research your builder! Buy with caution!
That really is an important part of this whole deal. Developers are pulling the plug on preconstruction buyers just so they can relist at higher prices.
All starts and ends up in GREED from the realtors and developers. Instead of thinking more on their investments, they want more than they can deliver, wrong using the money, ending up using “other” money which is dangerous not only for their company but for the people who purchased real estate from the plan. Sooner or later, this creates a deadlock in the economy, and I suspect that Urbancorp is not the only developer/realtor that got into this kind of trouble.
Saskin isn’t getting anything.
Great article.
That’s funny, 425 Patricia was a worthless location to start with that they overpaid on and the new owner overpaid on it a second time.
That was the only site that they didn’t sell anything as they went to market and it was an epic fail.
@ian the money is going to the holding companies… potentially. Bay llp, urbancorp etc. He and his wife control the holding companies so same as him pocketing the money!
No, it’s going to the courts. I know someone on the inside, unless there is something left over after the deposits are paid back they won’t see jack.
While the Bonds are huge, there is a lawsuit pending on it which he will lose, the lawsuit on the deposits, the fact the bond people will get their money back may make the lawsuit disappear. Trust me, the guy is done.
I am on the inside. After Bondholders and Depositors get paid back there is still 30+ million left over. Its all public knowledge in Trustee reports.
Only way he get’s nothing is if the courts decide the depositors were defrauded and compensate them for appreciation lost on there purchases… than he wont get anything!
This article was well researched and well written before the 31 million net profit was even calculated for Saskin.
I am glad this story is out and in a prominent publication. The article just makes clear Saskin was a (unethical) builder who exposed an existing loophole in law and had the audacity to go through. THIS WILL HAPPEN AGAIN (via Saskin or another builder) until laws are changed.
They say buyer beware. I say Real Estate buyers purchase with an agent who would advise you to put the money in real estate lawyers trust account rather than direct to a builder.
Second Toronto Life perhaps use The Hooker Family rather than The Hookers, can’t read it with a straight face.
This doesn’t have anything to do with Realtors Flavia. As I wrote in my earlier post, any Realtor with his/her salt would’ve advised the buyer to put the money in Real Estate trust account. If the builder wasn’t in agreement I would tell my people to go elsewhere
If there was justice, you are right. BUT he will reap a windfall.
http://www.financialpost.com/m/wp/personal-finance/mortgages-real-estate/blog.html?b=business.financialpost.com/personal-finance/mortgages-real-estate/developer-could-reap-31-million-benefit-from-bankruptcy-filing-but-buyers-wont-get-their-homes
Read the Sales Agreement line by line, NEVER take your lawyer’s word “this is the norm so it’s OK”. As you can see “the norm” has many outclauses and little guarantee for the buyer. Being “the norm” doesn’t mean you are covered. There is also no law that outlines what must be in a Sales Agreement. You should also check if build plans have been approved by the city, or else you are subject to space and design changes, of course the builder is covered and owes you nothing in this case and will use every opportunity to blame the city for anything in the builder’s favour.
Alan Saskin is an EVIL man; white collar crime at its finest. It’s weird his wife Doreen is a psychologist / social worker by trade. Some day there will be (street) justice on Alan Saskin.
I’m sorry, I missed the part where a crime was committed?
“never take your lawyer’s word” has to be the dumbest think I’ve ever read.
He has to compensate them interest on the deposits, that’s standard rules, as well until the bond thing is done in court completely there will be there. I am sure there will be enough “legal fees” used to pull as much of the money away
Let’s also be honest, that if the value of the properties was so high, why didn’t he just sell some of it off to clear debts?
Bonds are unsecured debt and will be paid back easily, and regardless bridlepath and woodbine are not even tied into the bond offering. Interest on deposits are pennies! Unless there is appreciation compensation to depositors, alot of money will be left over for saskin and company, millions! Lets hope the courts recognize that and compensate the people who have really been hurt… the depositors. Thats the real story that needs to be written. Ive never heard of a recievership where a company cones out with 10s of millions of dollars in profit! Something is deffinately wrong with a legal system that allows that!
I was part of the Riverdale development before I resold (and still got stuck waiting for Title for 2+ years)..
Quite a few of us buyers were stunned our lawyers couldn’t answer the outcome if UC went belly up before Transfer of Title. No one could even say if their deposits were covered beyond $30k. This despite my buyers already having lived in a unit I sold them for 2+ years. We found most of our real estate lawyers were just facilitators of Title Transfer. In the quagmire field that UC had created, the standard Real Estate lawyer was stumped.
Sorry dumb is almost losing a home affecting TWO families for one unit. Live it first, then we can talk..
None of what Saskin did was illegal per se, but it is borderline criminal and definitely unethical. Using deposits to continually grow his Ponzi scheme. Misleading Israelis. Transferring all his assets to his wife before bankruptcy. I guess the point of the story was, what Saskin did wasn’t wrong (or borderline criminal ) ?? WTF
Anything involving Real Estate is buyer beware. The market is an insane seller’s market for the passed decade, and the quality went as south as the ethics.
Resale home uncovered as Knob & Tube ?? Too bad buyer beware, even if the sellers had 3 other buyers not needing a home inspection. Oh there isn’t even Tarion on resale.
SICK JOKE.. The worst built new cars have longer warranties than ANY new home built now ! Let’s not even get into how builders hardly deliver what they promised, if at all..
Laws need to change regarding ANY home sales.
At what point did you bring in your lawyer? Sounds like you brought the lawyer in after you signed the purchase agreement, in which their only job would be to check title, pay outstanding costs and transfer title. Did you actually have the lawyer look at the agreement prior to signing with UC? If your lawyer read the agreement and didn’t understand it then their first bit of advice would have been, “don’t sign this, I’m a lawyer and I don’t understand it”. Did that happen? It sounds like you signed a binding agreement and then asked your lawyer what they could do for you, the world doesn’t work that way.
Jack, the laws don’t need changing. You just need to learn how to purchase real estate. Maybe not take your own advice and hire an inspector and a lawyer before you sign anything.
Ian, there is no agreement to pay interest on real estate deposits unless it written into the contract. There is no standard legislation to provide this. In fact the story even said that the deposits act as an “interest free loan”.
You must benefit from the status quo, here’s what’s deficient in what you outline. And by the way, my lawyer reviewed my purchase agreement, and he said “nothing out of the ordinary, this is the norm”.
– There is no legal outline for what must constitute a Purchase Agreement on Freehold. It must really be titled a Deposit Agreement. Nothing has been purchased if the builder chooses to.
– Tarion has a cap on deposit protection, well below a GTA average down payment.
– Tarion has zero accountability to the government to flag or warn the public of builder issues (which has been written in other media as Tarion acting late on Urbancorp)
– home inspectors (as you recommend) have ZERO legal liabilities or obligations in what they say or do. Home Inspection is not a legally designated or regulated profession, unlike electrical inspection, or engineering.
– why aren’t deposits held in-trust by law ?
– why must buyers who were First In Line to fund the project be last in line at the bankruptcy money ? A builder can’t get bank loans until a chunk of deposits.
Granted people should be more weary of bad builders, but the mechanism for awareness is badly stacked against consumers:
– invested buyers not wanting bad publicity on units purchased to sell.
– Tarion itself suppressing and massaging bad claim stats (just look at Urbancorp stats).
Public stories about Urbancorp and bad builders can’t happen enough. Unfortunately it takes something this big and bad to make the big publications (seen in the passed year). The warning signs of Urbancorp trouble were evident around 2011, but most of this was suppressed by those benefiting from “more business”. For every bad article on Urbancorp written by a blogger in 2012, you had someone endorsing Urbancorp as a good builder. Where are those endorsements to defend Urbancorp now or in the passed year ?
Met with lawyer after signing and during Cool Off (just to get our foot in the door w no obligations). Check the tense of my description what he said, we were in a position to back out clean if the negative info on UC was available during a 2 week part time dig. In fact I actually looked up Tarion’s stats and went to previous townhome projects of Urbancorp (at that time only in King W village in 416). My lawyer’s words were “nothing wrong here, this is the norm”.
And that’s my point. Read my original post, I’m actually advocating for more scrutiny by the buyer, and not reliance on solely a lawyer’s word. I didn’t say “don’t trust a lawyer”. I said “NEVER take your lawyer’s word “this is the norm so it’s OK””
Let’s not forget by the time the people in the story signed an APS, Urbancorp’s rep was already shady at best. But beyond bloggers, the corporate entities incl Tarion said all is fine.
Where was the regulator/licensor of builders, the arms-length Ont goverment monopoly Tarion Warranty Corp? Tarion says in its Builder Bulletins they check builders’ financial records annually before renewing licenses.
An obvious red flag should’ve been that Urbancorp refused to let a forensic accountant look at their books. How many warning signs did Tarion as regulator need?
Why was there no warning for consumers about Urbancorp’s shaky financials on Tarion’s Builder Directory on their website? No consequences, no deterrent.
How many more Urbancorp disasters are out there? Why does Premier Wynne refuse to bring reforms to make sure this govt agency effectively regulates builders?
These are all very good questions. Also, why did Justice Cunningham (the person charged to head the current Tarion Review that is underway) tell the Toronto Star last year that he did not know enough about Urbancorp to comment? Urbancorp had been in the media for more than a year at that point. This was very concerning. How thorough will this Tarion Review be? Is this Tarion Review just another white-wash?
It’s critical that Tarion’s role in all of this is revealed to the public. This article says that Urbancorp refused to let Tarion’s forensic accountant review Urbancorp’s books. But isn’t there a Tarion regulation (#894) that says: “…The registrant shall allow the duly authorized representatives of the Corporation free access to the registrant’s books and records during normal business hours for the purpose of confirming matters relating to the Plan”? Canadians for Properly Built Homes (CPBH) has written to Tarion’s CEO, Mr. Bogach, and asked him about this.
Barbara Captjin asked how many more Urbancorp disasters there are out there. Does the ON Gov’t know? After all, the Liberals initiated “oversight fees” a number of years ago, and Tarion has paid the ON Gov’t millions in “oversight fees” — but the public does not know what that oversight entails. And the Wynne Gov’t has refused to provide specific information about where these oversight fees are going.
Consumer protection in Canada is primarily a provincial responsibility. Over the past 12 years, the ON Gov’t has shuffled its consumer protection minister about every year. By the time that person is starting to get to know the file, he/she is shuffled out. It’s time for the Wynne Government to start to get serious about consumer protection, and provide adequate consumer protection for the largest purchase most make – a home.
Justice Cunningham, the Tarion Reviewer, told Kenyon Wallace of the Toronto Star in Sept. 2016 that he didn’t know enough about Urbancorp to comment. This statement from Justice Cunningham shocked many. After all, the Tarion Review had been underway for more than 10 months at that point. (Canadians for Properly Built homes (CPBH) asked Justice Cunningham early in the Tarion Review process to use Urbancorp as a case study to test Tarion’s effectiveness as the industry “regulator”.) We are still awaiting Justice Cunningham’s final report for the Tarion Review. It was due June 30, 2016.
From my experience, I strongly believe Tarion must be replaced with a proper regulator, that is not governed by builders. We also need a choice of warranty providers also not governed by builders, Tarion is a monopoly and consumers are not in its best interest.
How can those bodies responsible for consumer protection, warranty , business ethics , corporation audits etc not be held accountable in the face of such outrageous experiences ? What are these bodies there for …they exist , collect the dollars , yell out their brand but when the time comes to ” deliver “, they squirm their way out of accountability and responsibility? It starts with the government and filters its way down ….Tarion as a start, must be reformed…and since the current government is not stepping up to the plate, the next one will ….
Jack, Mike:
Some would blame the buyer but realize that the builder record was clear from Tarion but that’s not saying much as Tarion builder record is INACURATE and misleading. Where is buyer to get objective information on builder? Definitely not from Tarion who side with protecting builders not homebuyers.
Problem here is that Ontario legislation for consumer protection is weak and Ont govt fails to regulate the new home builder industry. Currently, it is self regulated by builders!!! The public needs speak up to their ontario MP to get them to change outdated laws. But builders donate $$$ to political parties so……the Ont parties turn blind eye.
You got to stop bashing the homeowner and saying it’s their fault. A System failure.
Mike,
Many laws need changing. Consumer protection. Ontario new home warranty act which enables Tarion to be the new home regulator is way outdated. Tarion has failed us not only with Urbancorp but over past 40 y since it allowed builders to be regulating the new home industry. They set the deposit limits to be as low as it is. Hasn’t been updated in years. Why? Self interest. Look deeper at the Tarion conflict of interest. It’s the laws that builders do not want ontario government to change. The laws protects builders from accountability. Voters need speak up but don’t know how corrupt government, Tarion system is. You lose.
Voters can speak up by signing this petition to end Tarion’s monopoly http://tinyurl.com/z6ysez8 . As part of the Tarion Review, Justice Cunningham had a “jurisdictional scan” conducted and 89% of the jurisdictions avoided the monopoly model. If Tarion had to compete for its business like other provinces’ warranty providers, it would shake up this system. Ontarians: Sign the Petition! It’s easy and it’s free! #EndTarionMonopolyNOW
Exacerbating the situation is the false sense of security that Tarion represents coupled with the required premium that new home purchasers ultimately have to pay into. The review of Tarion’s status as quasi government endorsed regulator/warranty provider should not be conducted by a judge. He may only focus on the legal aspects of its existence and practice. Instead someone who understands governance and conflicts of interest would be better suited to conduct this review and propose changes. Tarion’s CEO, Howard Bogatch, who previously headed a credit union, was regulated with independent oversight and such conflicts of interest would not exist with his previous employer.
How many more lives, financially and otherwise, will be destroyed while a “review” is plodded though? Our “group” of organized citizens has provided more than enough info to complete the Tarion Review; and, over the years, contacted all possible authorities and branches of government; appealed to the tribunals and courts (up to the Supreme Court of Canada). One of us even went to prison for standing up against a system run amok, then died trying. The very people that are elected to protect us want to keep pretending that it’s not a problem for the fox to guard the henhouse. 40 years of this nonsense, deception, and tragedy. I am just one of the many victims, beat up and spit out by a sample of the greed and psycopathy that has been allowed to pervade this province. And this is NOT fake news!
Interesting point about Justice Cunningham.
Quote from Doreen Saskin
“Everyone makes mistakes. It is what you do next that counts.”
I wish she would tell that to her husband, I haven’t heard any apology from him to all the people he has hurt and stole from. That really shows his true character.
https://www.thestar.com/opinion/2009/07/02/survivors_story_touches_readers.html
Ever Google the Developer? As the story mentioned there have been issues with them going back a decade. At what point do we as a society start taking responsibility for our own actions? Why must we have the government put in all sorts of rules when we are unwilling to do the basic pieces of due diligence?
Do you think any of these people who didn’t contact a lawyer or run a simple Google search bothered to check with Tarion? Do you think that they said, “well the lawyer has their reservations and there are a lot of complaints from owners of other developments but Tarion says things are fine so let’s do this”? Don’t be so naive.
I’m sorry but housing is expensive enough, adding more rules keeps more builders out the game and only serves to drive prices up.
Kathleen, Tarion is not a regulator. It provides insurance to cover repairs in the first year after a new build to home protected by Tarion. It’s there in case your builder doesn’t complete repairs or is unable to correct mistakes in construction. It is not a regulator.
The fact that you haven’t bothered to learn the mandate of Tarion is exactly what is wrong in real estate, a lack of education. The sad thing is the information is out there but most don’t bother to take advantage of it.
– There is no legal outline for what must constitute a Purchase Agreement on Freehold. It must really be titled a Deposit Agreement. Nothing has been purchased if the builder chooses to.
This is for your lawyer to negotiate. If you don’t like the terms you don’t have to sign and you certainly don’t have to put up any money. Rarely in the world are there standard contracts, if there were we’d have no need for lawyers. This shouldn’t come as a surprise to you but in every negotiation each party is looking out for their own best interest.
– Tarion has a cap on deposit protection, well below a GTA average down payment.
Bank insurances rarely covers all your deposits, what’s your point? You could have went out and purchased additional insurance if you had any worry about the builders ability to close the transaction. I’m guessing that didn’t happen. That’s not my fault or that of my fellow taxpayers, the onus lies on you.
– Tarion has zero accountability to the government to flag or warn the public of builder issues (which has been written in other media as Tarion acting late on Urbancorp)
And? Is there a builder out there that not contracted to the government that has accountability to a government? Yes, there were a number of issues out there about the builder people still moved forward. Tarion also realises that they must give the builder every opportunity to fix any transgressions as taking away their insurance could force the builder into bankruptcy leaving homeowners in the abyss. Tarion has to balance this out, you call it a delay, it was only being prudent.
– home inspectors (as you recommend) have ZERO legal liabilities or obligations in what they say or do. Home Inspection is not a legally designated or regulated profession, unlike electrical inspection, or engineering.
Correct but we live in a small world with this great tool called the internet. Use a reputable firm like Carson Dunlop where most of the inspectors are engineers. The offer a guarantee on what they can see and hold a long reputation of doing a good job. That’s called relying on the free market.
– why aren’t deposits held in-trust by law ?
Why should they be? You have the ability to enter into a trust or escrow agreement on your own free will. Most don’t. A good lawyer would have recommended this; any time I forward funds to someone for a deposit, the first thing I ask for is the trust agreement. My lawyer taught me that.
– why must buyers who were First In Line to fund the project be last in line at the bankruptcy money ? A builder can’t get bank loans until a chunk of deposits
Buyers are unsecured creditors. Buyers advancing funds to a developer have the right to ask that they take security in the property, most don’t. Banks lend to condo developments when 80% of the units are sold to “qualified buyers”. The bank gets to choose who’s qualified and who’s not. Builders who don’t have 80% sold to “qualified buyers” must put up additional capital. Banks don’t care where that capital comes from, most comes from mezz lenders, some comes from deposits.
Granted people should be more weary of bad builders, but the mechanism for awareness is badly stacked against consumers:
– invested buyers not wanting bad publicity on units purchased to sell.
– Tarion itself suppressing and massaging bad claim stats (just look at Urbancorp stats).
How so? You can’t use Google? You can’t have your agent take you to various listings in previously built projects?
Exactly you brought in your lawyer after signing the documents.
Did your lawyer walk your through the terms of the contract? If not and you paid for their advice you should be contacting the Law Society.
Ah, Mike, Tarion is both the “industry regulator” AND provides the warranty…..
Yup – Been this way for more than 40 years now….
From the Tarion web-site: “….We investigate homeowner warranty claims; resolve warranty disputes between homeowners and builders; provide deposit and delayed closing protection for new home buyers; and prosecute illegal builders. We regulate new home builders and ensure they meet a province-wide standard of technical competence and financial capacity….”
Well I still had 2 weeks to bail on the deal during the Cool Off period..
He did walk me through key points, such as buying from plans, deviations allowed by the builder etc. So had my lawyer raised some flags on Urbancorp or at least the open ended builder favoured terms in the APS, then I coulda backed out with no penalties. Again the problem is most APS are indeed written like that. So he’s not being dishonest when he said what he said. Just that he’s never been involved in a heave ho with a builder, like most Real Estate lawyers who are just facilitators.
And in all fairness, the saga that was Urbancorp (which was in its infancy in summer 2011), who could have foreseen the ponzi would be this extensive and long running ?
Again not blaming the lawyer. The fault lies in a system where the bar is set so low on regulation and accountability. That’s the point of this story.
Awesome. Your (hindsight) wisdom is heavily implied by this article and by the entire saga. Now find me a developer or resale seller that will even agree to half the points you raised.
And by the way in 2011 the only credible negative publicity on UC was David Fleming on the internet. Guess it’s too much to ask to trust Tarion with its government mandate. And at that time there was just so many UC condo units on the market, no one wanted to talk for fear of devaluing their unit.
If you’re oblivious (or selective) to how Tarion is stacked against buyers. Then I can’t debate with you, the need to reform Tarion is one of few topics the PCs and NDP can agree on.
Here is something to contemplate regarding this whole debacle as it pertains to the points below and how the system is flawed.
Buyers are unsecured creditors. Buyers advancing funds to a developer have the right to ask that they take security in the property, most don’t. Banks lend to condo developments when 80% of the units are sold to “qualified buyers”. The bank gets to choose who’s qualified and who’s not. Builders who don’t have 80% sold to “qualified buyers” must put up additional capital. Banks don’t care where that capital comes from, most comes from mezz lenders, some comes from deposits.
Both the Bridlepath and Woodbine project were 100% sold, deposits on every single unit. In addition they were under a separate corp and isolated from Bondholders, other development debt etc.
The secured debt on both properties was around $13 million, less than what the properties were purchased for years ago. So Financing could not have been an issue.
The flaw in the system is that the builder was allowed to put these properties into receivership resulting in the shedding of the depositors and unlocking of additional value profit for the builder.
Now think about how flawed this is in a market of appreciating land/home value. Any builder who purchased land several years ago, collected depositor money to service their debt can today decide screw it … I don’t need to build anything my land value has doubled or tripled, I’ll just put the project into receivership to get rid of these depositors who bought at 2013 market price and get the receiver to sort everything out and deliver my profit for me for $0 out of pocket.
Jack,
Let’s be honest with one another, if you signed the paperwork and then went to your lawyer the probability of you doing any due diligence on the developer prior to signing the agreement agreement as well.
Once you sign that agreement you have on your rose coloured glasses. You’re thinking about the dinner parties you’ll host, if your kid will fall in love with the kid next door and all that fun stuff that comes with buying a house.
You’ve made your decision, you’ve paid your deposit, there is no going back.
You’re not alone, most people do exactly what you did. That said, just because most people do something doesn’t mean it was the right thing to do.
You should have had your lawyer read the contract before you signed it. You should have asked your lawyer if they or any other lawyer they knew, had dealt with the developer.
Yes, they say they’re a regulator but what do they do to “regulate”?
To register as a builder you have a meeting, sit through 7 courses, show them your financing and all is good.
The don’t meet your trades, talk to your bankers or visit the job site.
Tarrion regulates only in the fact that it protects its ability to maintain a warranty program.
Click past the splash page and it becomes abundantly apparent.
Nice of you to assume.. What you don’t know is I was a part of the original group of buyers who attended the developer’s battles with the locals to get the facade approved. (Urbancorp sold the units before city approval of site plans & design). Coincidentally, this occurred during the Cool Off Period.
What you don’t know is I was concerned enough to approach Alan Saskin himself (after the meeting) with my threat to back out unless he told us where we were headed for size and design. How’s that for First Hand diligence.
Tarion stats (cough cough), reading up on David Fleming’s site, and visitIng a King West unit were part of my diligence.
My last straw to ReAssign came in decor selection when UC was trying to pawn off laminate as standard when the APS said hardwood was standard, and the standard options SÛCKED. AND OH YEAH, they told me I could not have decor selection until I agreed to a new Delayed Closing (thereby waiving Tarion Delayed Closing Compensation @$7k). And I could not resell my unit unless the new buyers waived Delayed Closing Compensation. Talk about rotten builder, all now proven true.
So I guess you’re fine with UC doing what they did and just leave it to buyer beware. It’s a good thing buying a car or made to order cake doesn’t require such paranoia.
According to Mike, it’s the buyers fault for presuming the builder actually intends to build. So buyer beware don’t presume the builder intends to build.
Oh, ok – Now you are talking about how well Tarion does its job as the regulator! The legislation says Tarion is THE regulator. We need new legislation to fix this – and then ensure that the legislation is enforced. Which party will make this happen? How long to the next election?
Why do we need more regulations? With more regulations come more costs.
Unfortunately this is the risk that you take when you buy off of paper, you’re buying at a discount to what a built home would sell for, so you’re accepting risk in order to receive a discount in price.
The law has provisions to protect consumers but consumers want those protections spoon fed to them rather than make sure themselves that they’re in place before they commit to buying a house.
So you knowingly signed a contract where the project had yet to be approved and didn’t include a provision to cover the return of funds if the project was not completed. Some how this is the fault of Tarrion or a lack of regulation?
I don’t agree with what happened, no. But I believe you accepted risk in return for a lower purchase price and ignored all the warning signs that there could be an issue. I feel bad for what happened to you but I also believe that you share in the blame for your misfortune.
And yes, Buyer Beware is the law that governs all transactions.
and how is this not theft? Fraud?