Provincial real estate watchdogs are looking into a long-delayed Langley condo project that remains mired in legal battles, including extradition proceedings against the company owner.
Murrayville House, a 92-unit condo complex near Langley Memorial Hospital, is a year and a half past its scheduled completion, but no buyers have been allowed to move in.
The project is finished, but is the subject of multiple lawsuits, and now of provincial intervention.
The Office of the Superintendent of Real Estate issued an emergency order Monday calling for the owner, a numbered company owned by Mark Chandler of development firm Newmark, to stop promoting the project, place all deposits in trust, and file a new disclosure statement.
The order says that interviews with potential buyers and an accountant suggested that $3.2 million of $4.5 million paid in deposits by one group of 24 buyers did not go into trust, as required by B.C. law.
The order also noted that there were at least 17 units which had been sold twice.
The order notes there is no evidence “that the purchasers identified in the 17 agreements are aware that their unit is subject to two purchase agreements.”
The units were sold in two different ways.
Buyers on one end purchased their condos in the normal way, putting down a deposit, and signing an ordinary contract. They were apparently not aware of the other sales.
Another group of buyers also bought at “wholesale” or “builders prices,” putting down significantly more money – up to $205,000, in one case. They were paying about 60 per cent of the standard purchase price.
Some of the buyers at the higher rate were told of the additional “retail” buyers. They were told that if the “retail” buyers completed the deal, the “wholesale” buyers would get the difference between the two prices – up to $120,000 for one transaction detailed in the order.
If the retail buyer backed out for any reason, the wholesale buyer would take possession of the unit without having to put up any more money.
Some buyers apparently expected to receive their units at the discounted price.
Chandler did not speak to the OSRE, but his lawyers said the money received from the “wholesale” sales were loans, according to the emergency order.
The project is currently the target of court actions, including a judgment in favour of the U.S. National Bank Association, and pending litigation by Canadian West Trust Company and HMF Home Mortgage Fund in one case, and the “wholesale” buyers of 24 units in another case.
The information about the double sales and the lawsuits should have been included in disclosure statements, wrote Michael Noseworthy, superintendent of real estate in B.C.
An FBI investigation in the United States has resulted in extradition proceedings against Chandler. His most recent hearing was last Friday in B.C. Supreme Court.