August 7, 2013
Alex Nino Gheciu
Councillor Josh Matlow is waging a war on what he deems “misleading” ads and billboards for condos that have not yet been approved by the city.
He’s calling for a law requiring developers to clearly indicate if they have not yet acquired building permits for condos when marketing them.
“It’s common for developers to display ads around the city announcing their condos with terms like ‘coming soon’ before their application is even approved,” said Matlow. “That really confuses people.”
It’s legal for developers to advertise projects and request deposits from homebuyers before receiving zoning approval for a condo’s construction.
Matlow argues this can lead people to “sell their current dwelling and rearrange their lives only to find out the unit they’re about to purchase may not exist.”
In April, the city approved Matlow’s motion to recommend that the province compel developers to devote a quarter of each ad to disclosing whether approval is pending on a project.
The motion covers outdoor signs, as well as print, radio and television ads.
The province is considering the city’s suggestion as it reviews Ontario’s Condominium Act, said Consumer Services ministry spokeswoman Sandra Bento.
In the interim, Matlow is taking enforcement measures into his own hands. He has vowed to “personally ditch” every A-frame ad for an unapproved condo he encounters on the street.
On Monday, he tweeted a photo of an A-frame ad for 155 Redpath Condos that he removed from a sidewalk and hid behind a mailbox near Yonge St. and Manor Rd.
Freed Developments, the company behind the Redpath project, did not respond to requests for comment.
Condo tycoon Brad J. Lamb argues most developers “do a very good job informing their buyers that a project is not finally and fully approved when asked.”
Lamb said zoning approval information is “clearly disclosed” in purchasing agreements, disclosure documents and municipally mandated rezoning signs at the construction sites. He noted deposits are fully refunded with interest whenever projects fall through.
“If they’re asking us to also put that information on advertising then I guess some people who are hysterical buyers who look for any reason to not buy because they’re terrified of life may say, ‘I’m afraid, it sounds risky,’ ” said Lamb.
“Even though the only risk is loss of opportunity.”
David Nakelsky, a lawyer who represents several developers, said Matlow’s idea “would not assist buyers” because “there have not been a lot of developments in the GTA that have fallen after the development has started.”
But condominium lawyer Gerald Miller argued there should be more disclosure and transparency in condo sales.
“I find developers are very astute at creating hysteria and momentum about a particular project based on clever marketing,” he said. “The consumer is never aware they may be reserving a unit that may not have a hope of being approved.”
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