Murrayville House remains unoccupied. File photo

Appeal filed in Langley condo case

Lawyer for buyers seeks a court order preventing cancellation of purchase contracts

Lawyers for buyers of units in the troubled Murrayville House condo project in Langley are trying to overturn a court ruling that would force the purchasers to pay substantially higher prices than the units originally sold for.

An application filed in the B.C. Court of Appeal asks the high court to set aside the April 4 decision by B.C. Supreme Court Justice Shelley Fitzpatrick, who ruled that 40 buyers would not be able to purchase units at the original prices.

The ruling was a setback for the people who signed agreements to buy units in the 92-unit condo at 5020 221A St. as far back as 2015.

It’s estimated the decision would force buyers with signed pre-sale agreements to pay $100,000 to $200,000 above the original agreed-upon price if they are forced to pay current market rates.

The application to overturn the decision was filed by lawyer Diego Solimano on behalf of eight named appellants.

It said the judge “erred in law by failing to give weight to public policy concerns (and) erred in fact by accepting financial information from (the developer) as fact without any, or adequate evidence.”

Solimano told the Times he will be asking the appeal court to order a stay to prevent cancellation of existing purchase agreements while the challenge is underway.

That application is scheduled for May 2, Solimano said.

Murrayville House ended up in receivership on October 4, 2017, after months of wrangling between the builder and various creditors that prevented buyers from moving in.

READ MORE: Stalled Langley condo project owes $62 million, receiver says

The Bowra Group Inc., the court-appointed receiver in charge of untangling the condo project’s finances, has reported that the builder of the complex owes millions more than it is worth to various creditors.

Bowra also reported that a number of the units in the four-storey wood frame condo at 5020 221A St. have been sold more than once, with 31 sold twice, 12 units sold three times, and one unit sold four times.

The receiver recommended 40 of those 149 deals should be recognized and the buyers ought to be allowed to complete the deals.

The B.C. Supreme Court judge refused, saying it came down to the rights of the creditors, who would get more back if the units were sold at current market rates, versus the rights of the people who signed pre-sale agreements more than two years ago when real estate prices were lower.

“The Receiver is directed to disclaim the 40 pre-sale contracts that are the subject of this application,” the written decision declared.

“Further, the Receiver is directed to take immediate steps to re-market and sell these 40 units as soon as possible, subject to legal requirements, and subject to court order.”

The decision noted that one of the lawyers suggested buyers with contracts should have a right of first refusal.

“This seems a reasonable proposal and one I would adopt,” the judge said.

Fitzpatrick said while “some sympathy is in order for the purchasers in these circumstances … I am satisfied that the equities in favour of the pre-sale purchasers do not justify overriding the mortgagees’ legal priority and giving the purchasers a preference that they would not otherwise enjoy.”

READ MORE: Losses mount for buyers of troubled Langley condo project

The application to appeal was cautiously welcomed by one of the buyers, Nolan Killeen, who speaks for a group of Murrayville House buyers.

Killeen is not among the named appellants on the application.

He said if the appeal court decides to hear the matter, he hopes the judges will take a different view that would benefit all the buyers.

“I anticipate there will be a few more (buyers) joining (the appeal),” Killeen said.

Several buyers have been house-sitting and renting rooms in hotels and bed-and-breakfasts while they’ve waited to move in.

Others, like Killeen, have gone ahead and bought other condominiums to avoid being priced out of the market.

Killeen said some sales agreements were signed as far back as the fall of 2015, when some one-bedroom units at the project were selling for as little as $199,000.

Representatives of the project developer and the receiver did not immediately respond to Times requests for comment.



dan.ferguson@langleytimes.com

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