'They took away our future,' says buyer of home that was never built — on land seller didn't own
Couple who sold Winnipeg home, expecting to move to Niverville, could be out $26K
A Winnipeg couple waiting to move into a new home south of the city were shocked to learn the project never started — and that their builder didn't even own the lot that had been sold to them.
Like a lot of young couples, Laura and Dorde Memic needed more living space after they had their first child.
So when they got a chance to leave their 800-square-foot Windsor Park bungalow for a brand-new, two-storey, 1,500-square-foot home in the Red River Valley town of Niverville, they almost couldn't believe their luck.
A home builder called Fine Haus Building Co. promised to make it happen for $289,900 — a price well below what a similar build would cost in Winnipeg.
All the Memics had to do was sell their existing home to free up money for the new build.
"It was a lot bigger than our home — double the size — and we could afford it, if we paid half off our debts and then used the rest on the down payment. So we decided to just go ahead with it," said Laura Memic, who signed on the dotted line in June.
She, Dorde and their infant son Alexander moved out of Windsor Park and stayed in Airbnb rentals while they waited for their house to rise in a new Niverville subdivision called Fifth Avenue Estates. The possession date listed in the contract was Sept. 30.
One month later, they're still living in a rental home while the Niverville lot they thought they bought remains empty.
No construction has taken place on the site. No building permits were ever requested for the plot, said Eric King, chief administrative officer with the Town of Niverville.
What came as a bigger shock to the Memics was the lot they thought they bought from Fine Haus has never belonged to the home-building company. It remains owned by Fifth Avenue Estates, said Cornell Friesen, the developer of the subdivision.
The Memics only learned this after they forked over a $16,000 deposit for the build.
"I think we were just kind of shocked and … confused, really confused, as to why we were being lied to," said Laura Memic, sitting on a couch in a Riverview Airbnb rental home.
She's on maternity leave from her job managing the deli at Sobeys supermarket. Dorde Memic works as a painter.
She said while she has not recently heard from her home builder or the real estate agent who represented her, she knows what she would say to them.
"I would probably tell them they stole so much from us, so much more than just the money," she said. "They took away time for my son, they took away time for my family. They took away our future."
To date, the Memics say they have racked up almost $10,000 in Airbnb fees while they contemplate the prospect they may get nothing for the money they handed over to the company.
They are not alone. Cornell Friesen said his firm has been contacted by a total of six homebuyers who believed they had purchased Fifth Avenue Estates lots through Fine Haus.
"They all think they own those lots," said Friesen, referring to the homebuyers. The normal process would involve a home builder acquiring the lots before it sold them to customers, he added.
Friesen said his company came within a day of bulldozing a partly completed home Fine Haus erected on one of the properties the house builder did not own.
"We found out they built a house on one of our lots, and they didn't own the lot," said Friesen, adding he's worried complaints about Fine Haus may affect his subdivision.
"All the [other] builders so far have been phenomenal," he said. "Our concern is this paints everyone with the same brush. We don't want to lose business."
Concerns in Niverville, Hanover
There are concerns about Fine Haus in other municipalities south of Winnipeg.
"We've heard complaints from individuals in the region regarding that company," said King, the Niverville CAO.
"I've had buyers calling me in tears, asking what I can do," said Jeremy Neufeld, the planning manager for the RM of Hanover, which includes communities east of Niverville.
He said Hanover won't issue any building permits to Fine Haus until the firm carries out a work order on a build in the community of Mitchell, about 20 kilometres southeast of Niverville.
In the nearby community of Kleefeld, homeowner Kevin Smith said he's taking Fine Haus to small-claims court in Steinbach on Dec. 16 for about $8,500 worth of what he describes as deficiencies in a house he moved into in 2017.
Smith claims Fine Haus handed over the home without applying the stucco exterior, finishing tubs or grading his yard. He also claims screws were falling out of cupboards and some heating work was deficient.
"I don't want anyone else to suffer from this company," said Smith, explaining why he's chosen to speak out about his experience.
According to corporate records, Fine Haus is registered by a numbered Manitoba company whose president and shareholder is Jason Cianflone, a former real estate agent who used to work in Winnipeg.
CBC News could not reach Cianflone for comment by phone, text, email, Facebook messenger or FedEx mail. Cianflone uses a Houston-area telephone number and owns a home in the Houston suburb of Spring, Texas, according to Harris County property records.
Cianflone is also president of, and a shareholder in, a separate numbered Manitoba company. Preston Myre Real Estate Services, whose agents sold Fine Haus builds, was registered to this second numbered company.
Laura Memic and Kevin Smith said neither of the Preston Myre agents who sold them their homes disclosed any relationship between the real estate firm and Fine Haus.
"Little did we know the home builder was also in charge of the real estate company. That would have been nice to know," said Smith.
Memic said her representing agent was Preston Myre's Joe Fiorillo. Smith said his agent was Scott Kurz, also with Preston Myre.
Both Fiorillo and Kurz now work with a different firm in Winnipeg. CBC News could not reach either Fiorillo or Kurz via phone, text or email.
Complaint made to real estate association
Smith said when he learned of the connection between Preston Myre and Fine Haus, he contacted the Manitoba Real Estate Association.
It declined to comment on the relationship between Preston Myre and Fine Haus, other than to note the Manitoba Securities Commission is handling the situation.
"We understand the MSC is dealing with the matter," real estate association communications director Kim Gandier said in a statement.
Gandier said in general, members of the real estate association "must disclose the role and nature of the service they are providing" and disclose who they're representing in any transaction.
"The Realtor code requires that our members are not to buy or sell, or attempt to buy or sell an interest in property, either directly or indirectly, for himself or herself, any member of his or her immediate family, or any entity in which our member has a financial interest, without making his or her position known to the buyer or seller in writing," Gandier said in a statement.
Cornell Friesen of Fifth Avenue Estates said his firm has been contacted by both the RCMP and the Manitoba Securities Commission about Fine Haus.
Neither the Mounties nor the securities commission would say whether an investigation is underway.
The RCMP does not confirm or deny who or what may or may not be the subject of an investigation, Sgt. Paul Manaigre said in a statement.
The Manitoba Securities Commission does not comment on whether investigations are underway, said Jason Booth, communications co-ordinator for the Manitoba Financial Services Agency, of which the securities commission is a branch.
Booth said in a statement that according to The Real Estate Brokers Act, "a real estate agent representing the buyer of a newly-built home is not obligated to disclose his or her employment by a firm owned by the same entity as the builder of said home."
Agents who represent both sides, however, must disclose they're acting on behalf of the buyer and seller, Booth added.
Lanny McInnes, president and CEO of the Manitoba Home Builders Association, said he has never heard of a situation like the one the Memic family has described.
"Nothing like this has come across my desk," he said in an interview, adding Fine Haus is not a member of his organization.
McInnes urged prospective homebuyers to stick with MHBA member companies.
"There's a level of qualification and track record they must have before they can be a member of our organization," McInnes said.
"What we stress is for consumers to really look at the professionalism of the builder you're going to be involved with and to do the due diligence on the builder before they commit to them doing the work."
'We were just really naive'
Laura Memic said she wishes she did more research before she signed her deal with Fine Haus.
"We were just really naive at the time. We didn't know anything about a build and we were just really eager to get in and sign it," she said.
They've been warned they may not recover any of the $26,000 they've spent so far on the Niverville home and the Airbnb fees.
"Unfortunately we have to restart [and] go back to renting," Laura said.
"It'll be a long time until we have enough money for another down payment, especially if we have to pay for a rental. We have two dogs and a baby now that we have to care for as well, so it's not that easy."
Friesen said he is working with Memic on a plan to sell her the lot directly, at a discount roughly equal to her down payment.
Some of the other Fine Haus buyers may not be so lucky, he said, because they made larger down payments on their lots. He likely cannot afford to provide larger discounts, he said.
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