Original Published on Sep 13, 2022 at 13:00
By Derek Howard, Local Journalism Initiative Reporter
What shouldn’t be a fight between middleweights became one, and Midland, Ontario bounced off a punch by Kaitlin Corporation to deliver a flurry of counters.
On August 31, the developers of the Bayport Village Phase 2 subdivision in Midland – Kaitlin Corporation – terminated all incomplete purchase and sale agreements through letters sent out to homebuyers, effective as of August 31.
The news caught many off guard with several affected parties contacting MidlandToday to share their surprise and disappointment. As of that time of publication, no response for comment by Kaitlin or the town had been received.
Also caught unaware were Midland staff through CAO David Denault, who had received an email from a purchaser who “lit into me, she lit into the town in this letter” about her contract being cancelled.
During a recent meeting of council, staff responded by presenting a report which allowed Midland to publicly respond to the Kaitlin letter that placed much of the blame for termination on the town’s shoulders.
“The basic statement on the reason they’re cancelling the contract,” began Denault, reading directly from the letter. “‘We are not able to satisfy the necessary conditions in the Agreement of Purchase and Sale to complete the transaction at this time. Accordingly the Agreement of Purchase and Sale will automatically terminate effective August 31, 2022 and your deposits will be returned to you.’
“So that seems to speak to some of the contractual language. This is a contract between Kaitlin and their buyers; the town has no influence in that,” added Denault.
Within the letter by Kaitlin, through director of business development Devon Daniell at Lanarose Midland Ltd., it stated that the town had everything needed to process the agreement for the subdivision.
Mayor Stewart Strathearn also took exception to the letter, and gave a six-minute retort that targeted each of Kaitlin’s accusations.
“This process started as a result of an application to modify an approved site plan for what is Phase 2, from condominium townhomes to freehold. In doing so, the road structure had to be changed because we’re now talking about municipal level roads that require 66-foot right-of-ways that were not contemplated in the original plan,” said Strathearn.
“To make it financially viable – I assume – Kaitlin then asked for provisions to change the depth and width of the lots to accommodate a little more density, presumably to make up their numbers with the lost space as a result of the 66-foot road right-of-way. And you may say, so what?
“Well, in accommodating that, the municipality set 43 conditions. To date, only three of them have been met, is my understanding,” Strathearn punctuated. “Only three. In three years.”
Both Strathearn and Denault noted Kaitlin’s lack of taking responsibility in the letter to homebuyers.
Said Denault, “One example of a currently unfulfilled condition I think is really illustrative of the degree of misrepresentation of the facts: Kaitlin does not have a plan for hydro power for that subdivision.”
In the letter, Kaitlin stated that “two additional planning firms” (Weston Consulting and Macaulay Shiomi Howson Ltd.) they had independently contracted agreed that necessary materials had been brought forth to Midland to proceed with the project.
“How can a reputable planning firm say that they’ve met conditions when we are waiting for an external agency to approve how you’re going to provide electricity?” countered Strathearn.
“It would appear that it’s between six months and a year to get this through to Hydro One. That was (late August) that was made clear.
“So then how can you say to somebody in a letter where you’re terminating their hopes and dreams that they in good faith put a down payment on: ‘If we can build this within the year, we’ll honour our purchase price of the contract?’ It’s not possible. It’s physically not possible. So it’s disingenuous at a minimum to say that to people.
“The communication from these folks has been less than stellar,” Strathearn added.
An apology from Kaitlin in the letter noted how “completely unprecedented in the industry” the situation was.
It was a statement that caused Denault to reply that the provincial Home Construction Regulatory Authority was put in place, due to the frequency of the cancellation of building contracts and for “these kinds of disputes between builders and homeowners.”
Denault also noted, “In March 2022, Kaitlin indicated that they intended to register the entire subdivision at one time… which makes it a little more complex; a lot more conditions that they have to deal with in a time-frame they’re trying to hit the market with.” He added that Kaitlin “appealed the updated draft plan conditions including the extended lapsing date” in August.
“Their appeal letter acknowledged that there are electrical and phasing issues that will take longer than three months to resolve; they acknowledge that in their appeal. But it wasn’t in the (termination) letter.”
The dense 35-minute council discussion included a thank you from Coun. Cher Cunningham for presenting “just the facts”… “in such a rational, specific, timeline-based way with some specificity that some people can get their teeth into.”
Coun. Bill Gordon raised concerns when he again pressured staff to provide the exact list of conditions required to approve the four homes of Block 27, prompting that he would visit Kaitlin to discuss those conditions. Strathearn “vehemently” urged Gordon to “cease and desist” claiming that the action would put the town into legal jeopardy, while Denault reinforced that mediation had so far best suited the town in the matter.
Executive director of planning building and bylaw Adam Farr reiterated that staff had been fully transparent throughout the process, referring to an 11-page report regarding Block 27 from the May 25 regular meeting of council, and a 40-page report on the Phase 2 extension of conditions within the August 10 agenda package.
Council approved a motion to receive the report as information. As of the time of this publication, no response was received by Kaitlin Corporation.
Denault replied to MidlandToday through email, “We’re working with Kaitlin and their representatives so discussions and exchange of information continue to hopefully get people into their homes.”
All reports, including the September 7 staff report in response to Kaitlin’s claims as well as the full termination letter, are available within the council agenda page on the Town of Midland website.
Council meetings are held every third Wednesday, and can be attended in person or virtually through Zoom by contacting the clerk’s department of Midland town hall for a link to the meeting.
Council meetings can also be viewed on Rogers TV cable channel 53, or through the livestream on the Rogers TV website. Archives of council meetings are available through Rogers TV and on the Town of Midland’s YouTube channel.