Dozens of pre-sale purchasers in troubled Lower Mainland condo tower claim contracts invalid

At $40 a haircut, Mohammadjavad Nadali spent nearly quadruplet years saving the $38,295 he used as a shoot down defrayment in 2023 for a pre-sale building block at Burnaby's occult condo building.

Had he known then what he has since learned about the developer's troubled finances, the 30-year-old claims he never would have bought into the Thind Properties development, which was forced into creditor protection in January 2025.

In court documents filed last month, Nadali claims allegations of misappropriated funds, a huge tax bill and the suspension of building permits and new home warranty insurance — all of which emerged during insolvency proceedings — would have served as massive red flags.

"If I knew that the developer owed $12 million to Canada Revenue Agency, I would never have purchased that unit," Nadali says in an affidavit filed in B.C. Supreme Court.

"Knowing any of these facts I would view the developer as not responsible, and I would not purchase from them."

Nadali is one of more than three dozen Eclipse pre-sale purchasers asking a B.C. Supreme Court judge to declare their contracts unenforceable for alleged breaches of B.C.'s Real Estate Development Marketing Act (REDMA).

The proceedings threaten to upend a standard creditor protection process by pitting provincial legislation protecting real estate consumers against federal laws designed to give debtors "breathing room" needed to repay creditors.

In court documents, the monitor appointed to oversee the Eclipse developer's finances claims Nadali and the others are essentially trying to get out of deals that time and the real estate market have proven to be money losers.

KSV Restructuring Inc. Says the alleged breaches all occurred before the creditor protection proceedings and notes that the developer's "alleged misuse or misappropriation of certain funds" was "never substantiated."

The company acknowledges that pre-sale purchasers agreed to pay "substantially above what could be achieved for the same units in the current market" but claims allowing them to back out now could have a devastating knock-on effect.

The monitor says a court victory would "encourage further challenges to closings by other pre-sale purchasers, resulting in additional value erosion."

"The marketing of unsold Eclipse units will be, at best, challenging given current market conditions, existing inventory, purchaser financing constraints and the need to preserve market confidence in the Eclipse project," the court filings read.

"The impact on the debtors and their creditors ... Will be severe."

The Eclipse was one of a string of Thind Properties developments forced into court in late 2024 and early 2025 by KingSett Mortgage Corporation, the company owed $225 million as of last December by firms Thind incorporated to build the Burnaby tower.

The insolvencies captured headlines, with KingSett loan and portfolio management director Daniel Pollack pointing to "uncertainty in the economy and particularly in the real estate market" in an affidavit outlining the developer's tax problems and mortgage defaults.

In the months since, numerous other condo developments around the Lower Mainland have entered receivership.

With condo prices slumping and the inventory of unsold units in Metro Vancouver doubling from 2024 to 2025, questions about the rights of pre-sale purchasers have come into focus.

In a separate set of proceedings facing another embattled developer — Helen Chan Sun — both Sun and a company that provides deposit insurance claim a bankruptcy order itself could be enough of a change to give pre-sale purchasers the right to rescind.

In an affidavit sworn in 2024 in relation to another Thind project — Surrey's District Northwest — Thind president Daljit Thind claimed he did "not believe the deposits for the pre-sold units are at risk as they were sold at a price that is below current market value."

But the market has since caught up, and according to court documents filed last year — when offered the chance, enough District Northwest pre-sale customers rescinded their contracts to scuttle a plan to sell that development out of receivership.

According to B.C. Assessment, the assessed value of the Eclipse tower fell from $257 million in July 2024 to $185 million last July.

Nearly $70 million of that drop was in the value of the building.

At the time the Eclipse project went into creditor protection, the 34-storey development was 95 per cent complete and 232 of the tower's 329 units had been pre-sold.

In its legal filings, KSV Restructuring claims the court-appointed monitor has since taken steps to complete the building's construction, reinstating the new home warranty insurance, retaining "critical trades and vendors and filing a strata plan for the Eclipse project."

Construction was "deemed substantially complete" by mid-March and "an occupancy permit was issued on April 10, 2026."

The monitor went back to court in April to obtain an order allowing for the sale of the Eclipse land and buildings — pursuant to any of the pre-sale agreements.

But lawyers for two groups of pre-sale owners wrote to the monitor in December 2025 and February 2026 claiming their contracts were unenforceable and demanding the return of their deposits.

Last month, both groups filed B.C. Supreme Court applications accusing the developer of breaching B.C.'s Real Estate Development Marketing Act well before insolvency proceedings began by failing to provide purchasers "material facts" about the Eclipse.

"The developer was in dire financial circumstances dating back to at least June 2023, when Canada Revenue Agency (CRA) obtained a judgement against it for approximately $12 million," one of the applications reads.

"By the fall of 2024, the situation has further deteriorated. In October 2024, warranty coverage for the development was suspended. In November 2024, the City of Burnaby suspended the building permit and construction ceased."

Nadali and the others claim "those facts were not disclosed by the developer in clear breach of the REDMA."

"The REDMA requires a developer to disclose a misrepresentation in a disclosure statement immediately after it becomes aware of it," the court documents claim.

"The developer failed to do so."

The court proceedings concern 32 units worth a combined pre-sale total of more than $26 million to the developer.

In affidavits filed with the court, three pre-sale purchasers of Eclipse units worth nearly $600,000 apiece claim they were "shocked" in December 2025 to learn the developer was insolvent.

In her affidavit, massage therapist Nazila Ghorbani claims she intended to live with her husband and son at the million-dollar condo she agreed to purchase at the Eclipse in 2023.

She says she would have thought differently about investing had she known about the developer's tax debts and the delays in completion.

"There were lots of units available from other developers," she writes.

"I needed to know with certainty that the development would be completed. I intended to move into the development ... The uncertainty surrounding the project has caused significant disruption to my family's financial and personal planning."

In his affidavit, Masaki (Kevin) Matsumoto says his father loaned him the $107,085 deposit he put down for the purchase of a unit worth $713,900.

"My plan was to live in the unit. My purchase of a unit in the Eclipse was my first and only real estate purchase," Matsumoto claims.

"I regret my decision to purchase a unit in the Eclipse. I believe I was significantly misled by the developer and that the overall quality of the development is very poor."

In response to the applications, KSV Restructuring accuses the pre-sale purchasers of trying to do an end-run around the federal Companies' Creditors Arrangement Act (CCAA).

The federal government describes the CCAA as "a federal law allowing insolvent corporations that owe their creditors in excess of $5 million to restructure their business and financial affairs."

"The CCAA has a broad remedial purpose, allowing a company to continue in business while it seeks to develop and obtain the approval of compromises or arrangements with its creditors," a government website dedicated to the legislation explains.

"Canadian courts have held that the main purpose of the CCAA is to avoid, where possible, the social and economic consequences of bankruptcy, and to allow a company to carry on business."

Under the terms of the CCAA, KingSett Mortgage Corporation obtained a broad stay of proceedings in January 2025 preventing anyone from pursuing legal action against the Eclipse developers while the monitor works to salvage the creditors' investment.

The monitor claims the CCAA prohibits "conduct that could imperil a restructuring" — like consumers trying to rely on provincial legislation to address a breach of B.C.'s Real Estate Development Marketing Act.

KSV Restructuring says the pre-sale purchasers waited a year before making their claims, giving them "the benefit of determining whether the real estate market would improve" before asking for their money back.

As part of the proceedings, the monitor has filed a "notice of constitutional question" — alerting both Canada's and B.C.'s attorney generals to the fact that KSV Restructuring intends to argue that the CCAA should take precedence over REDMA.

That's a concern the pre-sale purchasers address in their application.

The stay of proceedings "did not change the developer's obligation to issue an amended disclosure statement, nor did it negate past breaches of that obligation," the pre-purchasers argue.

"The developer is not lawfully permitted to close contracts that are unenforceable by the developer under provincial law."

Even if they lose, the monitor says, the pre-sale purchasers will receive exactly "what they bargained for – completed units in the [Eclipse]."

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