More than 120 people awaiting around $15million tied up in deposits they paid on a failed seniors’ resort development will have to wait longer for their refunds after the group behind the project won protection against creditors.
The charity Trinity Ravine Community Inc. won protection from its creditors three weeks ago, citing the adverse effects of the COVID-19 pandemic and “skyrocketing” construction costs. The move comes seven years after the announcement of the development of Trinity Ravine Towers – a two-tower, 605-unit “55+ Christian lifestyle community” in Scarborough, just east of Toronto.
Trinity Ravine is currently undergoing a court-supervised sale of its assets and land for development, which is expected to be completed by the end of August. He says that once the land is sold, he intends to reimburse those who are waiting for reimbursement.
But that means people who bought life leases with the project will have to wait at least another five months for their refunds, although the organization has already missed the promised date for the return of deposits.
“It’s almost criminal,” said Lisa Lyn, who has been waiting four years for her $116,000 refund.
CBC News first reported on Trinity Ravine in December, when some life lease buyers complained that they were overwhelmed when it came to recovering their deposits. At the time, the organization promised that refunds would be made by mid-January.
As Trinity Ravine faces proceedings under the Companies’ Creditors Arrangement Act (CCAA), it cannot return any money and life lease buyers cannot sue , leaving some in limbo and the price of housing already expensive in the Toronto area market.
“I can’t even afford to move,” Lyn said. “It’s very devastating.”
Lyn purchased a life lease in 2016. She first requested her down payment in 2018 after the project stalled.
A life lease is not ownership, but the right to occupy a home for a long time, often a lifetime.
Trinity Ravine, which is affiliated with the Pentecostal church Global Kingdom Ministries, originally planned for the project to be completed in March 2019. Then it pushed the date back to March 2022.
It touted a community that would help seniors live independently with tailored programs, social activities and amenities. But construction never started and the parking lot where it was to be built next to the church remains empty.
Lyn posted bail for herself, her mother, and her grandmother to live in a penthouse. Instead, her grandmother was recently moved to a long-term care home, and Lyn is waiting for her down payment before planning her move.
“It destroys everything, all your plans,” she said.
“It’s just a hope and a prayer”
In December, CBC News spoke with Fengfeng Zhou who said Trinity Ravine had pushed back the repayment date for his $50,300 deposit multiple times.
At the time, he was skeptical of the organization’s promise to reimburse him in January. He has since lost his job and hired a lawyer. But during the CCAA process, he cannot take any legal action.
“We have no other choice [but to wait]”, he said in a more recent interview. “The question is whether we will get the money in August. I am not sure.”
Father and son Abdul and Aiman Hussain say they were approached by a real estate agent in 2016 who told them the project would be a good investment.
They each made a down payment of approximately $70,000; Abdul to live in the building, while Aiman invested in a life lease. They say they put their faith in the project because a church was behind it.
“They made false promises,” Aiman said. “We missed a lot of opportunities and we just won’t have a chance to come back to the market at this time.
“At this point, it’s just a hope and a prayer.”
Matthew R. Harris, a Toronto insolvency and bankruptcy lawyer, isn’t involved in the case, but he says that while creditors have to wait six to 12 months for their money, it looks like Trinity Ravine have a “solid plan” to get enough money to pay their way back.
“I would be optimistic if I were [life-lease holders]. I do not think that [Trinity Ravine] going to end up with a shortfall based on property prices,” he said.
The Trinity Ravine land has been valued at approximately $32 million, which is based on the redevelopment potential of the site.
Trinity Ravine repaid $12 million in deposits
CCAA documents show Trinity Ravine owes money to nearly 300 creditors and 280 people still have life leases.
More than 439 people have purchased life leases with Trinity Ravine, and the company has received more than $27 million in deposits, the documents show. So far, Trinity Ravine has returned deposits to 188 people, representing more than $12 million in refunds.
As of September 2021, Trinity Ravine had assets of over $25 million, but liabilities of over $29 million.
Trinity Ravine did not respond to concerns from life lease buyers or answer specific questions when contacted by CBC News, but instead responded with its own questions and answers document.
He says that before obtaining creditor protection, the organization did everything possible to pay off the life lease deposits.
“Trinity Ravine is disappointed that the project could not be completed as originally conceived,” the document reads. “Once the sale process is completed, Trinity Ravine intends to implement a court-supervised claims process and thereafter the proceeds of the sale may be distributed to its creditors, including the purchasers of life leases.”
Life lease buyers told CBC News that even if they get their deposits back and someone else builds the project, they fear the prices will be based on the current real estate market and will be too high.
Abdul says he is not comfortable getting involved in another real estate project.
“It’s very hard to take [the deposit] money and give it to other people because we have lost confidence.”