Vandyk Properties in Receivership.
Sunday Dec 03rd, 2023
This blog will be updated as the new information becomes available.
In the January 9 update, the receiver advises that the Heartlake and Ravine Projects are freeholds and only the Tarion deposit protection applies. I believe the Heartlake project was advertised and sold as condominium, therefore the amounts in excess of the Tarion protection should be insured. I encourage every buyer in this project to review the legal documents and consult their real estate lawyer.
Vandyk Backyard and Vandyk The Buckingham are now under receivership.
Vandyk Properties – Toronto based real estate developer which owes the lenders amounts in excess $200M is currently in the receivership. The companies who are owed the most ( and Dorr Capital Corporation) have asked the Ontario Superior Court of Justice to appoint KSV Restructuring Inc to be the receiver and take over the management of Vandyk’s following properties:
The projects total 1,757 units of which 830 have been sold to buyers, and the buyers paid significant amounts of deposits.
In addition to the money being owed to above mentioned lenders (Kingsett $169M and Dorr $34M) multiple subcontractors placed construction liens on various Vandyk properties.
It is worth noting that the company is in the process of constructing other projects which are not yet under the receivership, but by all accounts, the construction on these projects have stalled as well. The projects not under receivership (as of December 2, 2023) are:
These two properties, which total approximately 1,000 units, also have construction liens placed on them for unpaid work.
Receiver – KSV Restructuring Inc.
The company in charge of the receivership is doing a very good job posting updates on the situation, there are multiple documents already listed on their website, and we will be updating as soon as new documents became available, you can also subscribe to their newsletter and stay up to date this way.
Are the deposits safe.
Generally speaking, yes, they are. The deposits on condominium projects are covered by Tarionup to $20,000 and according to the Ontario condominium regulations the deposits must be placed in trust accounts. The developers are allowed to use the funds held in trust accounts if the funds in excess of the amount covered by Tarion is insured bywe have previously written in more details about thishere
KSV Restructuring Inc. issued a memo on November 24, 2023, updating theThe deposits in excess of Tarion are insured by
Online forums discussions related to Vandyk issues.
Many people, buyers, subcontractors, employees and so on have been affected by Vandyk, and there are multiple discussions online related to the topic to which we provide links below, please keep in mind that the info posted by anonymous users may or may not be accurate.
What are the possible outcomes for properties in receivership or bankruptcy.
The projects which have started will be completed, usually another developer will buy it. In the current environment as a future owner or buyer we would be concerned with the quality of these projects. There are 3 most common options:
- the new developer will honour the contracts as is,
- the new developer will cancel the contracts and sell for higher prices,
- the new developer will give the original buyers an option to increase the price to purchase the units before cancelling the contracts. They aren't likely to honour the original contracts if they think they can sell for higher prices.
If the construction hasn't started yet, the land will be sold to another developer, they may cancel the contracts and either sell again right away or wait until the market conditions improve.
This is a very difficult and stressful situation for many involved, we will update the information as it becomes available.