Agents warned about pre-construction scams

by Grainne Burns23 Oct 2014
Seller’s market or not, agents are warning buyers to be more careful about handing over deposit money given a $12-million fraud case earlier this year – still reverberating across the marketplace.
 
Buyers need to wake up to the threat of fraud in real estate or they could face huge losses.
 
It’s a perennial warning but one at the top of a growing number of agent minds in the wake of a fraud case involving Toronto-based lawyer Meerai Cho. She represented the developer behind Centrium, the condo hotel project in North York that robbed buyers of thousands in deposit funds.
 
The lawyer faces 75 charges for failing to return deposits to purchasers of the mixed-use development. According to a police representative, the project seemed legitimate and not a front for a scam.
 
“Our thoughts are that it shows how important it is to buy pre-construction through reputable builders. Buyers should always research the project as well as other developments done by the builder,” Erica Smith of Condo Chicks told CREW. “We would never take clients to a pre-construction sales office without knowing the reputation of the builder.
 
“It's so important these days considering the amount of fraud and international money in the real estate market.”
 
It is believed that almost 140 people are affected by this case with buyers putting down deposits ranging from $40,000 to $700,000.
 
 

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