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Refunds coming for backed-out Cheakamus Crossing buyers

Blog by Nick Swinburne | November 4th, 2010

November 3, 2010

People who put up deposits and then decided not to go through with buying a new home at Cheakamus Crossing are breathing a sigh of relief this week after recent word that refund cheques are on the way.

The Whistler 2020 Development Corp. board decided at its meeting on Oct. 25 to approve deposit refunds for the approximately 35 people or families who backed out of their purchases, Joe Redmond, Whistler 2020 president, said on Monday (Nov. 1).

“All along we had felt that the deposits would be returned,” Redmond said, adding that it was just a matter of board approval and timing when the refund cheques would be processed.

Now that most of the resident-restricted homes in the new neighbourhood are occupied and only about three units remain available for sale, it “was a good time to refund the money,” Redmond said. About 18 units became available for resale about two weeks ago and most have already been purchased.

The refund cheques range from about $6,000 at the low end to as much as $25,000, Redmond said. Would-be buyers put up deposits of between two and five per cent of the total unit price. All the money is being returned, plus interest, except for a $750 fee per party for administration and legal costs, he said.

An email went out notifying the approximately 35 people who are eligible for a refund, and cheques will be ready for pick-up at the Whistler 2020 office in Function Junction. Redmond said efforts are also being made to contact several people who have moved, and cheques can be mailed if necessary.

He said the response has been “positive” to the news that refund cheques are coming.

The purpose of Cheakamus Crossing was to provide affordable housing for Whistler employees, so it would have been “political dynamite” to have kept the deposits of people whose personal situations changed and couldn’t follow through with the purchase, Redmond said.

He previously told The Question that those who decided not to finalize purchases cited a variety of reasons for their decisions. Some people have moved away from Whistler, personal circumstances such as employment changed for others and a few were trying to sell another house and haven’t been able to because of the market.

Redmond said it’s unlikely that people would receive much, if any, refund if Cheakamus Crossing had been built by a private developer. Whistler 2020 Development Corp. is a subsidiary of the municipality.

“I think if we were a private company, no one would be receiving any money back,” Redmond said.

There is a mechanism under B.C.’s real estate laws under which a would-be purchaser could claim a deposit refund, but a developer could charge holding costs and other fees to greatly reduce the refund amount, he added.

In the case of Cheakamus Crossing, forfeited units were resold soon after signed a contract that they were backing out, so there was little loss in holding costs, Redmond said. There were some legal, administrative and marketing costs, however — hence the $750 fee.

The biggest concern of the Whistler 2020 board at the outset was whether there was enough of a market for local employees to purchase housing, Redmond said. But with virtually all of the 221 available units now snapped up, “this has proven to be very successful,” he said.

“It’s a great thing that’s been created,” Redmond said.

The next phase for Whistler 2020 and Cheakamus Crossing is to keep plugging away at sales efforts for the open market townhouses and single-family lots, he said. Those sales will take longer than originally anticipated, Redmond said, but they will sell over time and the municipality has until November 2011 to repay the loan taken out to build the neighbourhood.