Sam Bibi’s Orléans home was built last year. But he can’t move in until Ashcroft Homes and Ottawa settle a dispute over sewers in the new development.
Sami Bibi put a down payment on a house in the new development of Eastboro in Orléans back in October 2019.
His four-bedroom home — exteriors, bathrooms, kitchen, hardwood floors — was completed in June 2023. Since then, he’s driven up and down his street and walked along his sidewalks. But he still hasn’t moved a single piece of furniture through his front door.
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That’s because a year after the house was completed, Bibi and his family are still waiting to move in because of an impasse between the city and the developer, Ashcroft, over who has to pay for a stormwater sewer. And they’re not alone.
Another 24 Eastboro homebuyers also own completed houses they can’t occupy.
Even if an agreement were reached today with the city over the stormwater sewer, it would still take between six and eight months to complete, said Manny DiFilippo, Ashcroft’s chief financial officer.
“We are in an unfortunate standoff with the city.”
In a statement of claim filed in court last month, Ashcroft asked that the court issue a mandamus — essentially court order — directing the city to issue a commence work notice, as well as $30 million in damages for “breach of contract, unjust enrichment, negligent misrepresentation and/or bad faith.”
None of the allegations have been proven in court.
In a brief statement, city solicitor Stuart Huxley said that, while the city will respond to the litigation through the court process, it is open to “continuing to explore means by which the developments can move forward.”
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Bibi, meanwhile, isn’t taking sides. But he wants Ashcroft and the city to figure it out as soon as possible.
He simply wants to move into his new home.
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Bibi agreed to pay $670,000 for the house, plus upgrades, in 2019. Over time, he paid $66,000 in deposits, plus deposits for the upgrades.
“I wanted the house to be ready for the summer of 2021, because my son was starting secondary school,” he says.
The house was originally scheduled for occupancy in July 2021. Bibi sold his house in Gatineau and rented a place for his family of five in Ottawa, at a cost of $2,500 a month. He expected a short delay because of the pandemic.
“To my mind, I was to move to my new house,” he says. “I thought it would be in February 2022.”
The delivery date was instead pushed back to the “last possible date” of November 2022, because the house was still not ready. Even after it was completed, it was not connected to sewers and water because there is no stormwater sewer. That meant Bibi had to wait for an occupancy permit.
It also meant Bibi had to learn first-hand the financial complexities that can occur between developers and the city.
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One of the issues is Ashcroft’s “front-ending agreement” with the city under the Development Charges Act. Under such an agreement, a developer may install city services earlier than the city would build them. The developer pays for the costs of installing the services, and the agreement includes the terms for repayment.
But it’s not that simple.
“Local services” are not eligible for reimbursement of development charges to builders, as they are considered the builder’s responsibility because they make it possible for the builder the sells homes. Non-local services, which serve the broader community, are eligible for development charges reimbursement.
In the end, homebuyers — and sometimes taxpayers — pay the costs of development.
The Eastboro subdivision needed three pieces of infrastructure — a stormwater pond, a sanitary sewer and a stormwater sewer. The first hurdle was to build the pond after cleaning up a former construction dump, DiFilippo says.
The project hit a major snag in January 2022, however, when treacherous blue clay was discovered while digging a trench for the stormwater sewer. Construction came to a halt. Ashcroft’s consultants proposed a costly change in engineering technology, he says. The trench would have to be deeper, and there would be added materials costs.
On April 6, 2022, Ashcroft executed an addendum to its agreement with the city. If authorized by city council, Ashcroft would enter into a front-ending agreement for repayment of the costs associated with the construction of the stormwater pond, the sanitary sewer and the stormwater sewer, according to the statement of claim.
The city agreed to fully reimburse Ashcroft for the sanitary sewer, but has maintained that it will only reimburse Ashcroft for oversizing on the storm sewer—not the entire storm sewer itself, which will cost over $19.7 million in total, Ashcroft alleges.
The big question is whether the stormwater sewer benefits only the Eastboro development or if it benefits the entire area. Ashcroft argues it’s the latter. The city argues it’s the former, DiFilippo says.
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The Ashcroft CFO says that no local sewer would be built to that depth or that size.
“There is a diabolical difference of opinion on what this is. There’s one side saying it’s a tree and the other side saying it’s a car,” he says.
“What the city is offering on the front-end agreement is $15 million lower than what Ashcroft is requesting to be reimbursed.”
According to Ashcroft’s statement of claim, the stormwater pond, sanitary sewer and storm sewer were all designed to service a larger area than the subdivision, and choosing a site for the stormwater pond had a significant impact on the cost of the storm sewer, with additional costs coming from locating the storm sewer and the sanitary sewer within Navan Road.
In a posting on her website last November, Orléans South-Navan Coun. Catherine Kitts says that, even though a large portion of her ward is under development, she has never encountered a situation where people have been waiting on their homes for such a long time.
Reached for comment, Kitts says Ashcroft’s litigation limits her ability to speak openly in detail on the situation.
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“I have incredible sympathy for the residents that continue to await the delivery of their homes in what has become a stressful and unfair situation,” Kitts says in a statement.
“As anyone familiar with the area will know, a large portion of Orléans South is under development — this dispute is exceptional. I have remained open and honest with those who have reached out about the status of the work, and I appreciate that all affected are anxious for an update.”
In its statement of claim, Ashcroft says the city is aware Ashcroft is carrying significant costs over the subdivision, the stormwater pond, the sanitary sewer and the stormwater sewer. Ashcroft has entered into agreements of purchase and sale for the homes in the subdivision and is “currently in default or will be in default if construction of the storm sewer is not allowed to proceed soon after issuing this statement of claim.”
Construction costs continue to rise, but the selling price of the houses was fixed as of the date of sale—and Ashcroft has seen a deterioration of profits of about $10 million, according to the statement of claim.
“Every month that goes by, Ashcroft is half a million dollars more in the hole,” DiFilippo says.
Ashcroft is obligated to sell the homes to the buyers at prices agreed to years ago, he says. “We can’t do that until we get the work done on Navan Road.”
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With respect to the impasse, Ashcroft is willing to go ahead with the stormwater sewer work, and let the legal system sort out the details of the agreement, DiFilippo says.
“Give us the work permit and then we can go to court and figure out the front ending agreement. Let the court decide.”
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It’s not the first time Ashcroft and its buyers have hit a speed bump because of delays in servicing land.
In July 2020, Ashcroft notified more than 50 homebuyers that it was terminating their sales agreements rather than delaying things further, citing its “inability to meet the condition regarding the servicing of the subdivision within the time permitted.”
Ashcroft said it would return the deposits — without interest — and offered the buyers an opportunity to purchase at a “preferred price” as soon as it was ready to re-launch the affected homes.
The issue was a report from an engineering consultant hired by the city, DiFilippo says. The report had not been issued by the end of June 2020, which meant that a condition in the buyers’ agreements of purchase and sale had not been met. Ashcroft had no idea how long it would take for the report to be issued, he says. Because of that, the agreements were terminated.
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That left some of the would-be homeowners — who had tied up their money in a house that had theoretically gained in value, but had no house — with a case of buyer’s remorse.
But he says the current situation is different because the conditions in the agreements of purchase and sale have been met. “It’s not Ashcroft’s intention to terminate those deals due to undue delays by the city.”
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As the developer and the city wrangle for a resolution to Eastboro’s latest impasse, homeowners like Bibi are left with a question of their own: do they wait it out or walk away?
If Bibi decided to walk away from the purchase agreement on his house, he would qualify to get his deposit back, plus interest, as well as up to $7,500.
But that’s “peanuts” compared to what he stands to lose, he says.
The cost of housing has significantly increased since he signed the purchase agreement in 2019 and sold his house in Gatineau. Not to mention, in the past three years, Bibi has spent $90,000 on rent.
While his new house would fetch over $1 million in today’s real estate market, in one last cruel twist, he can’t sell it for a profit because it has no services and no occupancy permit.
He was given a tour when the house was completed, but right now he’s technically not even allowed inside. He’s not even sure who put the “No Trespassing” sign out front.
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