Ontario couple walks away from $140K after dispute with developer

The last year and a half have been an emotional roller coaster for engaged couple Joe Jennison and Alicia Murrell.

Looking to buy their first home, the couple sought a new build in Guelph, Ont. but were unsuccessful in two lotteries by developer Fusion Homes.

“We tried when they released a detached and we didn't get, then we tried to do their semi-detached, we didn't get that,” Murrell said. “We finally got their townhome and we were like pretty excited about that.”

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The couple says closing on their first home, in the “Sora at The Glade” development, was a major life moment.

“So we went: ‘That's it, we made it. We got our house.’ We were super excited,” Jennison said.

ISSUES WITH INCENTIVES

The couple says their relationship with Fusion Homes quickly started to sour not long after closing.

“It was probably a few months later they started releasing incentives because they weren't selling their homes,” Murrell said.

“Nothing like earth shattering but still very nice,” Jennison continued. “So we reached out to our sales lady and said: ‘Can we get in on any of this incentive?’ And she said: ‘No, sorry, we don't backdate anything, this is for new customers.’ So it sucked, but not the end of the world.”

According to the couple, by the time they were ready to move in, the incentives had reached $100,000 off the sale price and there were offers for around $100,000 in free upgrades.

They say these programs devalued their home by $200,000.

“It's not the fact that we aren't getting anything at all and we're stomping our feet and upset saying, 'We want this too,'” Jennison said. “It's the fact that they've devalued our house before we've even literally looked at it.”

Joe Jennison and Alicia Murrell say their relationship with developer Fusion Homes quickly began to sour, not long after closing on a new build in Fusion's “Sora at The Glade” development in Guelph. (Jeff Pickel/CTV Kitchener)

BALLOONING FEES

Still willing to go through with the deal, Jennison and Murrell say they were hit with another bombshell in the form of occupancy fees.

“I was at work that day when I got the email from the lawyer saying: ‘Hey, I need six post-dated cheques for basically $6,600.’”

Occupancy fees are unique to new build communities. It is essentially paying rent to the developer until enough units have been sold to form a condo corporation.

Originally told the occupancy fee was $3,250 per month, Jennison was told two days before moving in that number had ballooned to $5,423.

Additionally the maintenance fee went up from $309 to $517. All in with tax, Jennison says it came to around $6,600 monthly.

Jennison and Murrell say adding to the confusion, there was no way to tell how long the occupancy fee would be in place.

“It could be two years that we were paying and nothing's going towards the mortgage,” Murrell said. “So we calculated at six months of cheques is about $40,000 just going down the drain.”

At this point, the couple say they were desperate to get out of the deal, but that is not a simple process.

'WE WERE RELIEVED TO LOSE $140,000'

As real estate lawyer Stefan Avramovic explains, once the contract is signed, the home builder holds most of the power.

“If you try to walk away from deal there are a lot of legal repercussions as well. If you walk away from a deal, not only can you lose your deposit, but if the property is sold for less than you signed on for – for example, let’s say you bought the property for $900,000 but it sells for $700,00 – you can be on the hook for the decrease in price as well,” Avramovic said.

After negotiations, Murrell and Jennison agree to forfeit their $141,000 down payment, and they say Fusion Homes agreed not pursue legal action.

Initially Murrell says the feeling was relief.

“And that's sad that we were relieved to lose $140,000,” Murrell said. “I was happy when we got that email, I'm like, ‘Okay, we're out, they are keeping our down payment, I’m ecstatic.’”

That feeling later turned to frustration and resentment.

“It's a very tough and bitter pill to swallow because Fusion walks away with all of our money and they get to resell the house and make even more money,” Jennison said.

The couple says they are not accusing Fusion of doing anything illegal, but say they expected better.

“Just the way to handle the situation, it just shows that they really don't care and that they honestly are just money hungry,” Murrell said.

Jennison says he hopes their story will help others going through the home buying process.

His advice? A good lawyer goes a long way.

“If your lawyer is not on the phone with you a day or two later, once you've submitted the paperwork to them, you should be calling them or firing that lawyer and getting a brand new one because they should be on the phone with you telling you exactly what each page of that document means,” he said.

CTV News reached out to Fusion Homes several times over the last several weeks, but has not received a reply.