More than 120 people waiting on roughly $15 million tied up in deposits they paid on a failed seniors complex development will have to wait longer for their refunds after the group behind the project was granted creditor protection.
Charitable organization Trinity Ravine Community Inc. was granted protection from its creditors three weeks ago, citing detrimental effects of the COVID-19 pandemic and “skyrocketing” construction costs. The move comes seven years after it announced the Trinity Ravine Towers development — a two-tower, 605-unit “55-plus Christian lifestyle community” in Scarborough, just east of Toronto.
Trinity Ravine is now going through a court-supervised sale of its assets and development land, which is expected to be complete by the end of August. It says once the land is sold, it intends to pay back those waiting for a refund.
But that means people who purchased life leases with the project will be kept waiting at least another five months for their refunds, despite the organization already missing its promised date for returning the deposits.
“It’s almost criminal,” said Lisa Lyn, who’s been waiting four years for her $116,000 refund.
CBC News first reported on Trinity Ravine in December when some life-lease purchasers complained they were getting the runaround when it came to getting their deposits back. At the time, the organization promised refunds would be paid by mid-January.
While Trinity Ravine is going through Companies’ Creditors Arrangement Act (CCAA) proceedings, it can’t repay any money and life-lease purchasers can’t take legal action, leaving some in limbo and priced out of the already expensive Toronto-area housing market.
“I can’t even afford to move anywhere,” Lyn said. “It’s very devastating.”
Lyn purchased a life lease in 2016. She asked for her deposit back for the first time in 2018 after the project wasn’t moving forward.
A life lease is not ownership, but the right to occupy a unit for a long period of time — often a lifetime.
Trinity Ravine, which is affiliated with Pentecostal church Global Kingdom Ministries, originally planned for the project to be complete in March 2019. Then, it pushed the date to March 2022.
It touted a community that would help seniors live independently with programming, social activities and tailored amenities. But construction never began, and the parking lot where it was supposed to be built next to the church remains empty.
Lyn put down a deposit for herself, her mother and grandmother to live in a penthouse. Instead, her grandmother was recently moved into a long-term care home, and Lyn is waiting on her deposit before planning to move.
“It wrecks everything, all your plans,” she said.
‘It’s just a hope and a prayer’
In December, CBC News spoke with Fengfeng Zhou who said that Trinity Ravine had pushed back the date to repay his $50,300 deposit several times.
At that point, he was skeptical about the organization’s promise to refund him in January. He’s since lost his job and hired a lawyer. But during the CCAA process, he can’t take any form of legal action.
“We have no other option [but to wait],” he said in a more recent interview. “The question is whether we will get the money in August. I’m 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 paid a deposit of about $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’ve made false promises,” Aiman said. “We’ve missed out on numerous opportunities and we just won’t have a chance to get back in the market right now.
“At this point it’s just a hope and a prayer.”
Toronto insolvency and bankruptcy lawyer Matthew R. Harris isn’t involved in the file, but he says while creditors may have to wait six to 12 months for their money, it appears Trinity Ravine has a “solid plan” to secure enough cash to pay them back.
“I would be optimistic if I were [life-lease holders]. I don’t think that [Trinity Ravine] is going to end up with a shortfall based on real estate prices,” he said.
Trinity Ravine’s land was appraised at approximately $32 million, which is based on the site’s redevelopment potential.
Trinity Ravine has refunded $12M in deposits
CCAA documents show Trinity Ravine owes money to nearly 300 creditors and 280 people still have life leases.
More than 439 people purchased a life lease with Trinity Ravine, and the corporation received more than $27 million dollars in deposits, the documents show. So far, Trinity Ravine has given 188 people back their deposits, amounting to more than $12 million in refunds.
As of September 2021, Trinity Ravine had assets of more than $25 million, but liabilities of more than $29 million.
Trinity Ravine didn’t address life-lease purchasers’ concerns or answer specific questions when contacted by CBC News, instead responding with its own question and answer document.
It says prior to obtaining creditor protection, the organization made every effort to refund life lease deposits.
“Trinity Ravine is disappointed that the project could not be completed as originally conceived,” the document reads. “Upon completion of the sale process, Trinity Ravine intends to implement a court-supervised claims process and thereafter, the sale proceeds may be distributed to its creditors, including life-lease purchasers.”
Life-lease purchasers told CBC News that even if they get their deposits back and someone else builds the project, they’re afraid prices will be based on the current real estate market and will be too high.
Abdul says he isn’t comfortable getting involved in another real estate project.
“It’s very difficult to take [the deposit] money and give it to some other people because we lost confidence.”