February 12, 2020
Fernwood Developments, a Guelph, Ontario-based developer of a stacked townhouse condominium complex located in Barrie, Ontario (the "Development"), was placed in receivership on February 12 on application by MarshallZehr Group, owed approximately $24.0 million. The Development is to be comprised of 94 residential condominium units in six buildings, to be completed in three phases. While construction on Phase 1 and 2 is finished, the units in Phase 3 are in various stages of construction and have yet to be sold. The developer has been unable to sell 26 units in Phases 1 and 2 of the Development during the last two years. As a result, the developer has fully drawn on the funds available under its commitment letter with MarshallZher and cannot raise additional financing to complete construction of Phase 3, which will cost around $1.6 million. Furthermore, it is alleged that Pensio Property Management Group, which acts as a property administrator for the Development collecting rents and managing units, has collected but failed to remit rental income to the developer over the last two years. RSM was appointed receiver. Chaitons is counsel to the applicant.