February 2015
The Story of Centrium Condos
F>our years ago Centrium Condos was just another Toronto condo project. It was to be built at 5220 Yonge St. The development was to include two towers, a 150-suite hotel and 258 condo suites. Pre-construction sales were strong and it sold out.
Buyers provided deposits ranging from $40,000 to $700,000.
The Centrium development changed hands at least once in 2013 and has since disintegrated. The developer has disappeared, sales agents are nowhere to be found, construction never commenced and to describe the lawyer collecting deposits as “untrustworthy” may be overly generous.
Today the property appears abandoned with no evidence that construction has or may commence.
An estimated $12.1 million in deposit money has been reported as missing. Most of this money were deposits on “commercial condos” and “hotel rooms”. Another $9 million in deposits on residential condos has been returned.
Centrium Condos is no longer a sold out condo development. It is a lesson to those who believe that investing in non-existent real estate is a sound practice. It does not represent problems in the condo industry as some have suggested.
Purchasing non-existent real estate in the form of an unbuilt condominium may be one of the riskiest investments in the marketplace. Buyers commit to something they can’t see or touch and which may be of questionable quality.
Purchasers accept that developers can alter the final product or delay its delivery. Finishings and construction, soundproofing between units, durability of window or wall systems and other important considerations remain unknown until delivery. And, as in the case of Centrium, the entire project may collapse for a myriad of reasons.
Real money was paid as a deposit for non-existent real estate. This is speculation and it comes with significant risk. Financial losses in Centrium may eventually prove to be the result of poor financial decisions unrelated to home ownership.
