A home buyers’ group will have to shoulder the costs of their own legal expenses after Toronto developer Urbancorp went bust earlier this year.
On Monday (August 29), the Ontario Superior Court of Justice decreed that buyers in Urbancorp’s four projects will have to pay for their legal costs by drawing on any compensation they receive from the proceedings, The Globe and Mail
“Estate funds should be spent for the benefit of the estate as a whole, not for the benefit of one group whose interests are contrary to the interests of the estate as a whole,” Court Justice Frank Newbould wrote in the order.
“It’s very, very disappointing,” depositor Loraine Adal-Salmon lamented, expressing doubts that she and her spouse would be able to get back their $80,000 deposit.
“It doesn’t make any sense to me why there is so much opposition toward us,” she said.
Records noted that a total of approximately $15 million has been deposited by hopeful buyers for units in the Urbancorp projects.
The court permitted law firm Dickinson Wright to serve as the home buyers’ representative, however. The group petitioned that their legal costs amounting to $150,000 be paid for by Urbancorp.
The developer’s representatives and court-appointed trustee, KSV Advisory, voiced strong opposition to the buyers’ appeal.
“It could start to derail some very big pieces of real estate,” KSV attorney Robin Schwill told the court.
KSV has said it expects enough money will be left over from the sale of Urbancorp’s coveted development lots to repay home buyers’ deposits.
Some of the buyers have expressed their interest to Dickinson Wright in attempting to convince the winning bidder of the Urbancorp sites to build their homes in lieu of their original purchases.
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