117 homebuyers out millions, as Ontario builder admits to selling homes without legal approvals

Homebuyers in Clearview, Ontario Face Major Losses After Developer Enters Receivership

Over 100 homebuyers have collectively lost millions after the developer of a pre-construction housing project in Clearview, near Wasaga Beach, Ontario, went into receivership. Many individuals, each having invested tens of thousands of dollars, now face financial turmoil.

Rayyan Shahid and his wife, expecting their first child next month, were excited to move into their new home at the Clearview development next year. Shahid, a first-time homebuyer, had paid $100,000 from his life savings toward the property, scheduled to be completed by April 2025. However, that dream has been shattered since the project’s developer, Sunrise Acquisitions (Stayner) Inc., filed for receivership in February.

Court records show that 117 buyers are affected, with losses totaling around $4 million. Some individuals have lost as much as $130,000, with Shahid alone losing $15,000. "It's really devastating," Shahid said. "It’s heartbreaking... not only are we not getting the house, but we’ve also lost our money."

Sunrise’s Troubled History and Allegations of Fraud

This is not the first financial collapse involving Sunrise Homes. The developer, based in Richmond Hill, has a history of selling homes without legal approvals. In addition to the Clearview project, it faces allegations of fund misappropriation related to a Markham project and owes millions for another failed development in Elmvale, Ontario.

According to court filings, Sunrise Acquisitions (Stayner) Inc. spent all the deposits it collected from buyers and lacks the funds to return their money. The company was not legally bound to keep the deposits in trust. "Where did all the money go?" Shahid questioned. "It’s not like they started construction and stopped midway—it’s still just barren land."

CEO Admits to Risky Practices

Sajjad Hussain, CEO of Sunrise Homes, told CBC Toronto that the allocation of funds is under review, with some deposits being used to repay loans. He admitted to knowingly selling properties without the necessary approvals, calling it a “calculated risk” the company has taken for years.

"Usually, we register when we start construction, which isn’t the correct approach," Hussain said. "We've been doing this for 15 to 20 years."

Despite ongoing financial troubles, Sunrise’s licenses remain active. However, the Home Construction Regulatory Authority (HCRA) has now initiated a closer inspection of the company’s operations.

Disputes Between Sunrise and Clearview Township

The court recently approved the sale of the Clearview project site to Brexit Holdings, one of Sunrise’s lenders. As part of the sale agreement, all purchase agreements with homebuyers were terminated. The developer blamed rising costs and delays in water infrastructure for the project’s downfall.

Sunrise had assured buyers that water services would be available by summer 2024, but John Ferguson, Clearview Township’s chief administrative officer, said this was never confirmed. "The first tender to assess costs went out only in fall 2022, and the costs were too high to proceed," Ferguson explained.

Toronto real estate lawyer Bob Aaron described the company’s promises about water availability as "serious misrepresentation." He criticized both Tarion, the provincial warranty corporation, and the HCRA for failing to act sooner. "Why wasn’t Tarion stopping the sale of unapproved homes?" he asked.

History of Financial Misconduct

Sunrise Homes’ financial troubles are not limited to the Clearview project. The company previously entered receivership for developments in Markham and Elmvale. In the Markham case, court-appointed receivers accused Hussain and his business partner, Muzammil Kodwavi, of writing fraudulent checks to themselves and falsifying financial records.

An affidavit from October 2022 shows the partners admitted to owing $5.5 million to Sunrise Homes, with a court later ordering them to repay over $10 million. Hussain dismissed allegations of wrongdoing, claiming the payments were legitimate project management fees.

Homebuyers Demand Better Protections

Another buyer, Faran Haq, also lost $100,000 to the Clearview project. He had hoped to move into his new home this summer with his family but was shocked to learn about the developer’s history of financial failures.

"If someone has caused harm before, the system should ensure they can’t do it again," Haq said, calling for stronger regulatory oversight.

Tarion maintains that it offers the most comprehensive deposit protection in Canada, but Aaron argues the current coverage—up to $100,000—falls short. "With their track record, it’s unbelievable they’re still allowed to sell homes," he said. "It boggles the imagination."

The Ontario government has promised to consult on new measures to address illegal home sales and protect buyers, while the HCRA’s investigation into Sunrise Homes is ongoing.