Eastboro homebuyers told they’ll never get to move in

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More than five years after making a deposit on a new home in Eastboro, Sami Bibi has been told he will never move into his all-but-completed home.

Bibi is among the 108 homebuyers who put down deposits for units in Ashcroft Homes’ Eastboro development, which went into receivership in late October.

The buyers have been told by the receiver that their purchase agreements will be terminated and their unfinished homes sold as part of a broader liquidation of assets in the Orléans development.

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Bibi, 57, an economist at Statistics Canada, made a $75,000 down payment on his four-bedroom Eastboro house in October 2019. His $750,000 home was substantially finished by June 2023, but he could not take possession because the subdivision’s stormwater system was unfinished.

Now, he’s learned his family will never get in the front door — even though the house is now worth considerably more than when he bought it.

“I’m disappointed,” Bibi says. “The loss is almost the price of a small apartment, but life is like this sometimes.”

Court-appointed receiver MNP Ltd. said it had been unable to find a “viable path” to complete the unfinished homes and honour the sales agreements.

In a recent update, MNP said it had discussions with Eastboro’s main lender, the Royal Bank of Canada, and the City of Ottawa, with a view towards completing construction work that would allow buyers to take possession of their homes.

The city has said it would issue occupancy permits only if a $15-million, permanent stormwater trunk sewer was built to serve the development.

The receiver proposed that a nearby dry pond be used as a temporary solution to the problem until the subdivision was sold and a new developer assumed responsibility for building the permanent stormwater trunk sewer along Navan Road.

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But the city rejected that proposal in late December.

John Sevigny, a City of Ottawa development manager, said the receiver’s proposal raised the same concerns as a similar one made by Ashcroft in 2023.

That proposal, Sevigny said, relied on a single submersible pump, increased the risk of basement flooding in the development, and offered no “certainty of timing” for the construction of a permanent stormwater solution.

MNP says it now plans to ask an Ontario Superior Court judge to approve a plan to terminate the Eastboro buyers’ agreements, refund available deposits and put the whole project up for sale.

The receiver’s recent update also revealed that MNP “anticipates a shortfall” in the $3.65-million account holding those deposits.

MNP did not disclose how much of a shortfall existed. It said Ashcroft officials had told MNP that some of the deposit monies were used to pay for home construction and services at Eastboro.

MNP said it had not been able to verify how those funds were used.

MNP did not respond to questions about the size of the shortfall or how much of those funds should have been held in trust.

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Eastboro’s homebuyers may have their losses partially covered by Tarion, the consumer protection organization that administers the Ontario New Home Warranties Plan Act.

Tarion provides deposit coverage of up to $60,000 on homes bought for $600,000 or less and up to 10 per cent of the purchase price (to a maximum of $100,000) on homes above $600,000.

MNP said it “continues to investigate the availability of deposit insurance” to cover the shortfall for Eastboro’s homebuyers.

In October, Ashcroft lost control of its 200-acre Eastboro development, which was sent into receivership after the company defaulted on an $80-million loan from RBC. RBC said Ashcroft failed to make $4.85 million in interest payments and could not offer a satisfactory plan for restarting the stalled project.

The Eastboro project is on land bounded by Navan Road, Renaud Road and Mer Bleue Road. It features 25 mostly-completed homes and another 83 in various stages of construction.

After several delays, including supply problems related to the COVID-19 epidemic, work on the project began in 2021, but it ran into more trouble in January 2022, when workers digging a trench for a stormwater sewer encountered soft, marine clay. Work was halted, and engineers eventually proposed costly changes that would require a different route beneath Navan Road.

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Ashcroft and the city fought for years about who should pay for that work.

Meanwhile, the Ashcroft Homes Group, a group of eight related companies, suffered broader financial turmoil. The company received court-ordered creditor protection in December.

Founded by David Choo in 1992, Ashcroft has built thousands of homes, condos, apartment and retirement units in and around Ottawa. Its previous projects include planned communities such as Central Park at the Experimental Farm and townhouse neighbourhoods such as Manhattan Square at Bells Corners.

Bibi has tried to move on from the Eastboro fiasco. He recently closed a deal on a home and expects to move in by October.

Andrew Duffy is a National Newspaper Award-winning reporter and long-form feature writer based in Ottawa. To support his work, including exclusive content for subscribers only, sign up here: ottawacitizen.com/subscribe

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