A lawyer for a mortgage company accused the embattled developers of three debt-ridden Lower Mainland condo projects Friday of misappropriating funds meant for the Canada Revenue Agency.
But under questioning from a judge who has now placed three Thind properties projects into receivership in the span of a month, Kingsett Mortgage Corporation lawyer Emma Newbery said her client wasn’t alleging “criminal connotations” against the developers.
“When I see that word, it has a connotation on the far end — it suggests something where you need to go to police,” Justice David Masuhara told the lawyer.
“I do not think that’s the intention,” Newbery responded.
‘Ultimately controlled by the same people’
The exchange was one of only a few bumps in an otherwise smooth 30-minute proceeding that ended with Masuhara appointing a receiver for unsold units in Burnaby’s Highline completed condo building and Richmond’s Minoru Square — a project which appears to have stalled.
Newbery said the projects carry mortgages worth a combined $250 million — and defaults dating back to September are now accruing interest at a rate of about $70,000 a day.
Friday’s order came just weeks after Masuhara put Thind’s District Northwest project — a two-tower, 1,023-unit yet-to-be-built complex billed as “Surrey’s new growth centre” — into receivership after Thind defaulted on an $80 million mortgage related to that project.
Although Thind is the developer, the parties named in the legal proceedings are the companies and partnerships incorporated to build each of the individual projects — with notice given to Thind Properties president Daljit Thind in relation to each of those entities.
“The three projects are ultimately controlled by the same people,” Newbery told the judge.
She said the developer used Minoru Square as collateral for the Highline — and vice versa.
Deposits allegedly not ‘at risk’
The fate of the three projects has drawn a great deal of media attention and questions from pre-sale purchasers wondering about the implications of a receivership for their units.
Newbery stressed that about 40 units at the Highline are currently occupied, whereas 163 units are held in the name of the developer. The receiver was not seeking control of the occupied units.
In an affidavit filed with the court, Daljit Thind claims 90 per cent of units at District Northwest had been pre-sold — leaving $78 million in deposits held in trust by a law firm.
“Despite the delay to the start of construction, I do not believe the deposits for the pre-sold units are at risk as they were sold at a price that is below current market value,” Thind wrote.
In response to a question from the judge about sales of units at the Highline, a lawyer for the receiver said the firm originally hired to market the project would be retained to sell units according to the prices the mortgage company had agreed on in the first place.
Mounting claims
Thind Properties didn’t file a response to the application seeking a receiver for the Highline and Minoru Square properties; the Highline’s strata corporation responded but did not take a position.
In strata housing, condo owners have title to their individual lots but own the common property and common assets of a building as a strata corporation. More than 1.5 million British Columbians live in strata housing.
The Highline’s strata corporation claims the developer owes the strata more than $1.1 million in unpaid fees registered in liens against the building last summer.
The strata corporation claims their liens rank in priority over the mortgage.
Beyond the battle over financing, a series of lawsuits related to the Highline has been filed in recent months by workers, contractors and a real estate agent claiming commission for consulting on a deal to sell $47.2 million worth of units in the building to a hotel company.
Other claimants include a company seeking nearly $1.7 million for the installation of steel stud and drywall systems at the Highline, a firm claiming nearly $600,000 for electrical work, and a glazier allegedly owed nearly half a million dollars.
