Site now under receivership
SELKIRK—Residents of Shelter Cove (SC), an in-development modular home community near Lake Erie, are angry as a long list of purchase promises remain unfulfilled by the developer.
The Press was first approached by residents Ed and Cheree Daurie, who signed a purchase agreement with “2039882 o/a Shelter Cove” on April 7, 2021 and, after five closing changes, moved in May 19, 2023.
Haldimand Press photos by Mike Renzella.
The couple listed many promised amenities they have not received, including a clubhouse that never opened, a pool that has been shut down in a state of disrepair, a non-existent walking trail, and a marina with significantly fewer slips than advertised.
The Press met with several concerned residents at Shelter Cove.
“We’re treated like second class citizens all around,” said resident Scott Wylie. “There’s really no professionalism here…. Your expectations need to be below zero on a scale of 1-10.”
Resident Al Wilson noted that the clubhouse began construction in 2015 with an email promising completion by 2017, but it remains closed. He said, “It disappoints me.”
“In almost six-and-a-half years, there has been some doors installed, and a little bit of work on the cupola,” added resident Katrina Beattie on the clubhouse. “Other than that, I’ve seen no work done on that building with the exception of water being pumped out of the basement because it routinely floods.”
Many roads in the community remain unpaved, many driveways have yet to be installed – despite some residents waiting over seven years, and many homes have fields of weeds instead of grass. In addition, residents have since been asked to pay an additional fee for driveway installations, despite expecting that within the purchase price.
Perhaps most concerning are issues surrounding water and sewage treatment on the site. While the development is far from complete, the on-site sewage treatment facility is already nearing capacity, with Haldimand County refusing to issue new permits for further development until the issue is fixed.
Beattie shared, “We don’t know exactly when (the sewage treatment facility) started to fail. The levels it was sending out were too high; they did not meet the ministry standard. That for sure was happening as of February 2023.”
Beattie said treated water from the site is being pumped into nearby Sandusk Creek. She noted court-appointed monitor Price Waterhouse Cooper (PWC) is now monitoring the plant, testing levels, and keeping the ministry up to date.
“That’s reassuring, but I feel that the government of Ontario and Haldimand County, despite paying taxes, have gone ‘sorry, you’re on your own,’” added Beattie.
Ed and Cheree noted in their letter that a promised “state of the art water treatment facility” is in actuality a cistern filled by “12 to 15 truckloads of daily water delivery,” leading to a higher-than-average water bill.
The site does have wells in place to connect to underground aquifers, with Beattie noting that SC has a permit to take water, but the system has never been connected, which she believes is likely due to high sulphur levels requiring a “proper water treatment plant.”
Resident John Burletson has seen an average $136 water bill: “I’ve never paid that much in my life.”
Beattie added that residents are fighting against two additional charges on their bill: one for water testing they believe should be included in their maintenance fee, and one for a $19.07 bulk water administration fee.
Compounding the residents’ concerns are:
- Poor workmanship on the homes, and work completed without proper permits, leading to issues such as water damage and expensive repairs.
- Higher than quoted property taxes, with resident Chris Daiken noting, “My property taxes were quoted at $118 a month; 2.5 years later they went up to $239 and we were sent a bill for back taxes in the amount of $3,385.”
- A lack of reliable internet access.
- A lack of streetlights, causing poor nighttime visibility.
While the problems accumulated, Shelter Cove filed for CCAA protection in January, listing $36.7 million in liabilities at the time, including $20.1 million in debt to KHL Investments USA Inc.
According to the website ‘Insolvency Insider’, SC listed delays in the delivery of electrical transformers used in construction, leading to delays in closings of home sales, inflationary pressures, and the rise in variable interest rates as the reasons they could not meet their debt obligations.
At that time, PWC was appointed as monitor and SC was issued a $2.5 million DIP (debtor in protection) loan to help cover continued operational expenses.
“In January 2022, KHL provided Shelter Cove with a $20 million loan or mortgage as a secure creditor. August 2023 was the last full monthly payment made by Shelter Cove to KHL. By December, KHL advised that they were looking to a receivership situation,” said Beattie.
Daiken wondered how much money SC has spent on legal fees, rather than trying to address residents’ concerns.
Resident John Burletson would like to see a breakdown of the DIP loan funds: “We’d like to know where the money has gone. Anyone who’s moved in here in the past year wants to know how we’re going to be compensated for things that need to be done in our homes. I have a long list of things that haven’t been done yet.”
While these issues play out, Daiken noted that there are 20-plus purchasers who have paid deposits for yet-to-be-installed homes and are sitting in limbo as long as construction is halted due to the water/wastewater capacity issues. Near the back of the development sit several built homes wrapped in plastic.
“I’ve been in touch with three of them. They’re devastated. Some have homes that are up for sale or have closed,” said Daiken.
Cheree feels for these residents, having experienced a significant move-in delay herself where they “lived in a trailer and our friend’s basement for three years.” It all leaves her to wonder, “Where has all of our money gone?”
The Press reached out to SC for a response to the residents’ complaints.
“Shelter Cove is currently under a CCAA Ruling debtor protection which avoided a receiver appointment for six months and is before the courts. Due to this position, we are not able to respond or provide any comments at this time,” replied SC rep Barry J Racippo.
The Press contacted Haldimand County for further information on their involvement.
“There are two key issues, and while they are not specifically between Haldimand and Shelter Cove, they do involve the County in various capacities,” read the statement, listing inadequate volume/flow of water, the effluent quality for sewage disposal, and the court insolvency process.
According to Haldimand, SC is currently hauling 11,000 litres a day of sewage to a county plant as an “interim measure,” with ministry approval.
On permits, they stated, “The County is only issuing permits for decks and sheds at existing established units at this time. New units are not being permitted given the inadequacy of the water and sewage systems and the need to bring those into compliance with MECP (Ministry of Environment, Conservation and Parks) operation requirements.”
The statement said the ministry is “heavily involved” in the water and sewage issues, with the owner retaining an engineer consulting team and presenting a work plan to the province and “working through identified issues to correct deficiencies with the water and wastewater systems. This is realistically not a short-term project to bring the site into compliance, requiring significant plant upgrades to achieve that.”
Once that work is complete and the province reissues an environmental compliance approval, the County may issue permits for new units again. However, any future expansion of the site would require site plan approval: “The site plan approval process includes the requirement for various technical studies (stormwater, lot grading, etc.) as well as archaeological assessment/clearance.”
On July 19, residents of SC received word that The Fuller Landau Group Inc. had been appointed as receiver and manager of the site by the Ontario Superior Court of Justice, ending SC’s CCAA protection and transferring all “assets, undertakings, and properties” in the process, according to PWC’s website.
Residents hope it’s the silver lining they’ve been waiting for in their years-long journey of frustration.
While they wait for improvements to come, those residents continue to believe Shelter Cove can be the retirement community they dreamt of.
“We live in a community like this in Florida. It’s amazing how it operates. Every single day the clubhouse is busy, there’s so many events going on,” concluded Daiken. “This place could be the same thing.”
