Eden Group Sophia goes into recievership

Old news to some, but The Sophia on east 11th and Sophia street in Mount Pleasant has gone into recievership. The Bowra group (the reciever) has 21 days to submit a plan to the courts. The thing that makes this really surprising is that the Sophia is 85% complete. When the Eden group canceled two other Vancouver developments in November of 2007 Bill Eden assured reporters that the Sophia would be completed.

The problems with completing all of these developments is reportedly related to cost over-runs and difficulty finding construction crews, but with condos selling for record high prices in Vancouver how is this going to play out in the long run? Limited availability of crews sounds to me like a temporary bottle-neck based on a large number of projects currently under construction, has the cost of labour really risen that much in the last few years?

The Sophia will very likely be finished given that it’s 85% complete, but this news probably makes those pre-sales contracts worthless. This issue is brought up in this CTV article:

NDP housing critic Diane Thorne said unless our laws change, presales could be the next leaky condo crisis.

“I think it should be a guaranteed price,” she said. “Prices will go up in the beginning, but I think there’s more security for homeowners. They won’t buy something they’ll lose or not be able to afford.”

Bob Rennie, who makes his living marketing presales, says reputable developers welcome new laws.

“Anything the government wants to put in place to protect the consumer doesn’t worry those top 15, 20 developers,” he said. “If you’re getting creative with your financing, or your profit margin is too low, that developer may worry. But then again we’re protecting the consumer so let’s do it.”

Thorne is drafting a private member’s bill about pre-sale law and she hopes the government will take it seriously.

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Anonymous
Anonymous
12 years ago

correction the date for the hearing is March 26th.

Anonymous
Anonymous
12 years ago

SORRY…THE DATE FOR THE COURT HEARING IS TUES, MARCH. 25, 2008….

Anonymous
Anonymous
12 years ago

I URGE EVERYONE AFFECTED BY THE SOPHIA RECEIVERSHIP TO ATTEND THE VANCOUVER COURT HOUSE ON TUES, MARCH 15, 2008 AT 9:00 A.M. TO STOP THE BOWRA GROUP'S RECOMMENDATION TO THE COURT. THE REPORT IS AS STATED IN HIS REPORT "NON-AUDITED" AND RELIED UPON INFO PROVIDED BY DEVELOPER. HOW CAN DAVE BOWRA DEPEND ON THE FIGURES PROVIDED BY THE DEVELOPER WHO IS THE BIGGEST FRAUDSTER IN VANCOUVER!!!

Kill Bill
Kill Bill
12 years ago

Changing the property to his wife's name isn't going to help. People just better hope he doesn't sell and return to South America.

Anonymous
Anonymous
12 years ago

How do you know that Bill bought property in Brazil? if true, the investors need to know a.s.a.p…i know he has already changed ownership on his principal residence in Dunbar, 2nd home on Yew Street and home in Whistler to just his wife's name…this guy is smart!!!!

Kill Bill
Kill Bill
12 years ago

Bill bought some property in Brazil, where do you think the 1mil has gone. He's going to dine and dash. My feeling is you won't see Bill again very soon.

Eden group of crooks.

investigatorG
investigatorG
12 years ago

There is detailed evidence that the Sophia project did not have to go into receivership. The project definately exceeded the original cost budget and construction schedule. My sources have advised that the final cost to complete additonal monies were committed by Bancorp and some inside investors. In summary, there was enough money to complete the Sophia, estimated to be $2,500,000 +/- by raising these monies and proceeding with completion of the project. Instead of taking this route, which any decent developer would do, Bill Eden personally chose to put the project into receivership and not Bancorp which he is using as a cover up. Further, the receiver, Bowra Group has completely destroyed any hope of this project being completed. Has anyone analyzed the cost to complete done by the Bowra Group? Absolutely ridiculous!! Now, he is recommending that all purchasers… Read more »

Jason Cole
Jason Cole
12 years ago

ummmmm… yeah…. construction is where all the drug lords and users end up…… it is really an exclusive club and we hate it when any other sector tries to head hunt our addicts.

And I for one have a problem with construction workers buying usless items like trucks….. I have a strict policy to only hire trades that utilize public transit for any and all material and equipment transport.

Problem identified and solved.

redvodpl
redvodpl
12 years ago

JASON – please email me at redvod@gmail.com on how to contact you – I'll tell you all about, I'm on your side.

redvodpl
redvodpl
12 years ago

Jason – I wold be interested in talking with you, how do I get in touch ?

scullboy
12 years ago

So to recap:

1) At a developer in receivership it is discovered that Money held in escrow is not where it should be.

2) There is rampant flipping in the market

3) The banks know 70% of condos downtown are speculative builds

4) The Banks are cutting off the cash

5) With the shutting off of spigots, suddenly developments are going into receivership, which by the way leads back to (1).

Smells like the top of the market to me. Anyone else see the same cause-and-effect relationship here? Could I just have unlocked… The Secret?

Oh and as the icing on the cake half the construction workers have drug habits…. but that's an unrelated data point….

Anon
Anon
12 years ago

"This is not to say that the trades are not to blame as well- just that it is hard to sit back and hear all the sympathy for the investors who generally are in a better state than the guys building the place."

In theory I would agree with you. But in practice, I've hard too many stories about trades having too much money to blow on drugs, new pickup trucks, etc.

For example, I heard from someone working on a certain buiding downtown which happens to be the tallest in the city now… that many of the trades have serious coke habits. And I've heard similar stories on ALOT of other projects.

So personally, I have little sympathy if they've been making good money the last few years, which is at least 90%+ of them.

Anon
Anon
12 years ago

"I heard the CBC local report this morning (Rick Cluff) and my understanding of the Condo Homeowners Assoc guy’s statement was that he thought up to 50% were buying the assignment to trade and that some assignments had been traded 5 times. 5 times! This is tulip mania, baby…"

I work for one of the big five banks here in Vancouver, lending money to developers. It's accepted knowledge around the office that for pre-sale condos downtown, at least half of all buyers are speculators, and usually more like 70%. Nobody cared while the market was going up, but now all the banks are turning off the taps because the risks are too high, everyone knows the party is over.

Jason Cole
Jason Cole
12 years ago

Where it is I do not know- where it is not I do know…. it is not where it should be. You would have to ask the developer that question.

investigatorG
investigatorG
12 years ago

WHAT HAPPENED TO THE HOLDBACK MONIES?

Jason Cole
Jason Cole
12 years ago

Some of them do have liens but once a building goes into recievership all bets are off. My meetings with the reciever have been….. well…. typical. The truth of the matter is that the lien act is a toothless tool that can be twisted by whoever has enough money to wait it out. It still leaves the holder in the state of unsecured positioning. The wording of the actual act leaves loopholes that are quite large. This happens more often than most people know of and is part of the reason construction costs are skyrocketing. Once a trade is bitten- they are going to pad the next job- and so on. This is not to say that the trades are not to blame as well- just that it is hard to sit back and hear all the sympathy for the… Read more »

M-
12 years ago

Jason, do the subs have liens against the property so that they can be sure to collect before any real estate changes hands?

Jason Cole
Jason Cole
12 years ago

I feel for all involved in the ill fated Sophia project….. but my 'all' includes the trades that were placed in a very bad position. That position is as an unsecured creditor. I was the superintendent on this project and have seen first hand how the investors, purchasers, and contractors were taken for large sums of money- in the case of the trades however, they were not investors but rather regular workers who had a choice near the end….. stay onsite and hope the developer would hold true to his word and pay out or leave the site and be sure to get nothing. Quite the choice. Most of these guys had not been paid for months and to add insult to injury their holdback monies (which shold never be in question) seems to have gone for a walk. This… Read more »

Anonymous
Anonymous
12 years ago

You take a risk buying a pre-sale and that's why Homebuyers should only buy a pre-sale at a discount – the discount compensates you for the risk. In general, if you are a Homebuyer and you're not getting a discount, buy a newly completed home. Note that I've used the term Homebuyer. If you are an Investor, then a pre-sale makes more sense – you are getting "free" leverage by purchasing a pre-sale. With leverage comes risk – that's part of being an Investor. There are so many Investors buying in this market that there is nolonger a discount for buying a pre-sale – in fact there is a premium in many markets. So if you're a Homebuyer, unless you've got a really compelling reason to buy a pre-sale, buy an existing home. Why should the government use public money… Read more »

ex-vancouverite
ex-vancouverite
12 years ago

2 more Vancouver condo projects in receivership

http://tinyurl.com/ypttjw

"Two more condominium projects in the Vancouver area have run into financial difficulties, leaving dozens of purchasers in limbo."

bcubbins
bcubbins
12 years ago

and that some assignments had been traded 5 times

How do assignment contracts work if a building is canceled? Suppose an original buyer puts down a $10,000 deposit and then flips the contract for $60,000. Then developer cancels and returns the deposit. Can the person holding the contract recover the difference from the original purchaser? (Assuming of course that the original buyer hasn't turned around and spent the $60k on several other condos.)

Anonymous
Anonymous
12 years ago

The news you are refering to is a bad news for you and for your friends above let’s see if the pope bring this update to friday free for all otherwise I will post to back up my comments above.

I'm not sure I understand you kindergarten level english but this is only bad news for speculators.

Vanguy
Vanguy
12 years ago

I heard the CBC local report this morning (Rick Cluff) and my understanding of the Condo Homeowners Assoc guy's statement was that he thought up to 50% were buying the assignment to trade and that some assignments had been traded 5 times. 5 times! This is tulip mania, baby… People are buying options and trading the options with no interest or care in the apartment, location, ameneties, nothing. It's just highly geared speculative options…but man what a risk. If you are the last guy holding the assignment and you paid too much for it from the previous guy and now you have to take occupancy…ouch! Oh well, no risk, no reward, but man as somebody who would just like a place to live, I've got no interest getting in the middle of this high-stakes game of poker. The run-up in… Read more »

Krrissh has nothing
Krrissh has nothing
12 years ago

You couldn't back up a car

krrish1
12 years ago

Tony,

The news you are refering to is a bad news for you and for your friends above let's see if the pope bring this update to friday free for all otherwise I will post to back up my comments above.