Townhome owners stuck footing $2M bill after stormwater system at new-build complex collapses

Dozens of townhome owners in sarah vaughan, Ont., ar veneer monumental bills — at present up to about $2 million collectively — to replace major damage to their recently built complex. 

The condominium corporation says the collapse of a community playground in 2024 was caused by installation errors during construction. But at this point the developer has defended the work, the insurance provider has denied a claim, and owners are now on the hook for the damages, with the total bill now growing to close to $40,000 each. 

“Would you think buying a brand new home would be this stressful?” said owner Asta Law. She said she bought pre-construction thinking it would be “stress free,” but it has been anything but. 

Some owners point to what they see as gaps in protections for homeowners in Ontario. 

Owner Jarreau Hickson says he and his wife thought they’d found the perfect home for starting their family, when they bought it pre-construction, and moved in in 2021. Instead, he says they’ve been dealing with “a nightmare,” and lots of financial stress.

“My biggest question is why isn't there something in place to protect homeowners from something like this? And if it can happen here, it can happen anywhere to anybody,” Hickson said. 

The Arthur Townhomes, near Keele Street and McNaughton Road, was a project by developer Treasure Hill. The 51 units were completed in 2021.

The freehold homes are individually owned, but the community is set up as a condominium corporation, with jointly owned infrastructure, such as the road itself. The common elements also include a small playground, which was built on top of a stormwater system. In June 2024, the playground suddenly collapsed, when a sinkhole developed. 

“We have nephews that come here and they play on the playground,” said Hickson. “Thank goodness no one was actually hurt here. You know, that's the first and foremost. But what could have been? I mean, it's unbelievable.”

Shock over the sudden collapse later turned to shock over what the financial implications would be for homeowners. They’ve individually been billed close to $40,000 each in special assessments in about a year and a half, to cover associated costs. 

Special assessments are one-time charges that are used to cover unforeseen expenses and budget shortfalls. Toronto-based condominium lawyer Bradley Chaplick, who is not involved in this case, says the fees in this case are “really high, and it's something that would not be within the contemplation of most homeowners when they buy a condo.”

Arthur Townhomes owners were first charged a special assessment fee of $7,843.12 each in August 2024, to pay for an engineering assessment – which the condo corporation said was needed for its insurance claim – as well as site protection measures, which totalled more than $30,000 per month.

They received another special assessment of just over $16,000 each in February 2025. 

A letter to owners from the property manager, on behalf of the corporation, explained “the condominium corporation’s engineers discovered that the location and depth of the [storm water] tank was not in accordance with drawings available, or those drawings produced by the developer.” A “revised approach” was therefore needed, adding to the costs. 

In May, there appeared to be an explanation for the cause of the damage. 

The property manager explained in an email to owners that the condo’s experts discovered that “makeshift” pieces of wood were used as temporary shoring during the tank installation, and were incorrectly left in place. The email explains that the shoring failed, and pushed against the tank, “making it laterally unstable, leading to the eventual collapse.” 

However its insurance provider seems to have come to a different conclusion. In October this year — 16 months after the collapse, and after the condo corporation had already spent more than $1 million on investigation and mitigation — the insurance claim was denied. 

Kozovski said Treasure Hill is also reviewing an engineering report from the insurer, and that the condo board “has not contacted us directly to discuss the next steps.”

“We are committed to working with the condominium board to resolve this issue,” her statement said. 

The latest special assessment was issued this month. Owners were told to pay another $16,000 each, in three installments, to fund the replacement of the water tank, and other “related and necessary work.” The first payment date was last week, and the final installment is due in January. 

“I don't know where I'm going to get the money from. I just have no money at all to pay anymore,” said owner Asta Law. 

Law said she doesn’t understand why she’s paying for what she’s been told is a construction mistake, and she wants accountability. 

Fellow homeowner Rezwan Razzaque also wants accountability from the developer, as well as from the City of Vaughan, which issues building permits. 

“How can this even happen? There [are] all these checks and balances, inspection,” Razzaque said. 

Some homeowners have also tried turning to Tarion, which administers warranty coverage for all new homes in Ontario. However coverage for individual owners only applies to issues directly affecting their unit. There is a separate warranty coverage for common elements, but those claims must be made by the condominium corporation. 

Owners like Razzaque, Law and Hickson say they feel like there are insufficient protections for homeowners like them. 

Gaps do exist, said Chaplick, the lawyer not involved with the case.

“There are gaps in what the Condominium Act does to protect homeowners and there are gaps in the Tarion coverage and those gaps are filled by the courts,” Chaplick said. 

In communications with owners, the property manager has indicated that the condo board is considering “exercising the condominium corporation’s rights against all parties responsible for the incident that occurred and against its insurer.”

That, of course, would require even more money from owners to cover legal fees. And even if the condo corporation successfully sues the developer or insurer, individual condo owners would not be reimbursed. The Condominium Act specifies that money would go into the condo corporation’s coffers. 

Chaplick notes that owners would benefit from the condo corporation having a well-funded reserve fund, but recognizes that “might be cold comfort.”

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