A Surrey man is accusing a B.C. developer of acting in bad faith and costing him tens of thousands of dollars.
Sudip Sehgall is a relatively new immigrant to Canada and dreamed of owning his own home in B.C.
He put almost $82,000 down on a presale townhouse in Surrey in December 2021, which was being built by Streetside Developments.
“I wanted to buy a place of my own because rents were increasing exponentially and I thought I would be priced out of the real estate market,” Sehgall told Global News.
He was able to get the money together from his savings, his father’s savings and a loan.
“Because at the rate things were increasing, I thought I would be homeless,” Sehgall added.
He was in the process of selling his property in India at the time and was counting on that money to fund the Surrey townhome.
However, that deal fell through, forcing Sehgall to travel back to India to try and complete the sale himself.
He was not successful.
Sehgall believed his next best option was to assign his contract to a new buyer. But to do that, he needed permission from the developer.
Despite a clause in the contract that states the developer shall not withhold consent unreasonably, Streetside Developments said no.
Sehgall said he even had two buyers who would be interested, but the developer also kept his down payment.
“How could this happen? How could they just walk away?” he asked.
Streetside Developments did not respond to Global News’ request for comment but did send a statement, saying this is a legal matter and it cannot comment on the specifics.
“As standard practice, legal professionals are involved in the home-buying process to safeguard both the buyer and seller. StreetSide Developments BC is governed by the Real Estate Development Marketing Act of British Columbia and develops contracts that adhere and comply with real estate law in the province.”
Sehgall said he has now obtained legal representation, but said his lawyer has not heard back from the developer’s lawyer yet.
“They just want to walk away like they have done,” he said. “Just like David and Goliath.”
Seghall said the whole process has been “unjust, unethical” and now the unit he was supposed to have as his new home will be sold to someone else.
Aman Bindra, a lawyer at KSW Surrey, specializing in lending, real estate, and corporate matters, told Global News that pre-sale contracts are usually drafted by developers and their lawyers so they are quite friendly to developers.
“Most pre-sell contracts will allow developers multiple rights to back out of the contract and just return the buyer’s deposit,” Bindra said.
“The buyers often don’t have very many rights to back out. Usually, they can only back out and get their deposit back if the developer can’t complete the unit, or if there’s a material change to the unit.”
He added that everyone should read their contracts closely, but, usually, the contract will say someone cannot assign it to someone else without the developer’s consent.
“Sometimes a developer can withhold their consent reasonably or unreasonably, so that language is very important,” Bindra said. “But, you know, there’s no guarantee that you can actually assign the contract to somebody else.
“So the real risk is that if you buy a pre-sell contract with the intention of just assigning it and never actually closing, there’s a chance that the developer might withhold their consent and you could lose your deposit.”
Bindra recommends reviewing any pre-sale contract with a real estate lawyer before signing anything.
Seghall said his request to return his down payment is not unreasonable and he will not give up easily.
“I have been ruined. My mum and dad have been ruined. My dad had a little heart attack because of this huge forfeiture. I am ruined mentally and monetarily as well.”