TORONTO (Reuters) - Canada’s top securities regulator said on Tuesday it would take no action against the developer of the Trump International Hotel in Toronto after looking into complaints by investors who bought condos in the troubled project.
“After a thorough review of the matter, we have determined not to pursue regulatory action,” the Ontario Securities Commission said in a statement.
The brief investigation by the OSC had prompted Talon International Inc, which developed the 65-story granite and glass hotel-condominium tower, to delay its closing date for final payments on condos by two weeks to December 13 as it cooperated with the inquiry.
With the OSC’s decision, disgruntled investors who are trying to get out of their contracts to buy luxury condos in the project are left scrambling to find financing for their purchases.
More than a dozen buyers are suing Talon to get out of the deals, while the developer is suing others who filed notice earlier in the year of their refusal to close.
While real estate mogul and TV personality Donald Trump’s company did not develop the property, the Trump Hotel Collection manages the property, which opened this year in Toronto’s business district. A lawyer for the Trump Organization has said the lawsuits are a simple case of buyer’s remorse.
Buyers, many of them foreign investors, have complained the project has been far costlier and less profitable than the developers promised and argued Talon sold them an investment rather than a condominium. The property contains 118 residential condos and 261 hotel-condos that go into a rental pool.
Investors have also struggled to secure mortgages on the units, which are to be rented out to hotel guests as part of a pool of privately owned units. A lawyer for several buyers said banks and tax authorities view the units as commercial rather than residential properties, subject to far higher tax rates and riskier and more expensive lending rates.
Reporting By Andrea Hopkins; Editing by Peter Galloway