BURST
A 130-townhome project in Burnaby is the latest development to be placed under creditor protection as one of its lenders says it is owed more than $59 million.
KingSett Mortgage Corp. petitioned B.C. Supreme Court for an initial order under the federal Companies’ Creditors Arrangement Act.
The court has appointed a monitor so KingSett can provide interim financing of $27.9 million to stabilize the faltering project and allow it to continue.
The petition, filed by KingSett on June 1, said Symphony Homes Ltd., the developer of Moonlight Sonata, a project on Wayburne Drive in Burnaby, had credit facilities provided by KingSett starting in September 2024 for about $95.3 million.
The petition said payments were missed, construction is stalled, and there are builders’ liens of more than $2.3 million registered against the property.
Symphony also failed to inject $10 million of additional equity into the project to meet cost overruns beyond an original budget, which had been a condition of the loan agreement.
“KingSett has lost confidence in the debtors’ management,” according to the petition.
It said that the project is overseen by a construction manager affiliated with the debtors, “causing concerns about the construction manager’s engagement and ability to address site maintenance and safety concerns or other risks to KingSett’s security, including preservation of value.”
The project and borrowers appear to be in “serious financial jeopardy and require interim funding and competent management to resolve their problems,” said the petition.
The court appointed KSV Restructuring to take over monitoring the project, which includes a combination of 90 townhome strata units, of which 28 are subject to pre-sale purchase agreements, and 40 rental units.
One observer said this project’s struggle is interesting because it is a smaller development with larger, ground-level homes designed for end users as opposed to a tall tower with hundreds of smaller homes sold to investors.
Moonlight Sonata is a wood-frame project with three- and four-bedroom, ground-level, garden units of around 1,200 to 1,600 square feet.
“This is what a lot of people call the missing middle,” said Vancouver real estate agent Oleg Galyuk.
He pointed out that in May, Rennie Intelligence released a report called Homes of Tomorrow, which analyzed lifestyle choices, preferences and daily habits of 1,400 renters, as well as past and future buyers. Over half identified townhomes as their preferred choice, with the “sweet spot” being a three-bedroom family townhome with ground-level living.
That being the case, seeing a project like this get snarled is especially heartbreaking, said Galyuk.
“We don’t know exactly what happened with this project. How much of the project they sold out. It seems like it was enough to start construction. It was supposed to be completing around summer 2026,” he said.
“It’s just that, as a buyer, you’re probably looking at buying a townhome as one of the quote-unquote safest investments, safest bets.”
The court order comes as KingSett is involved with another Burnaby project that is being watched closely.
Presale buyers at Eclipse, a 34-storey, 329-unit residential highrise in the Brentwood area of Burnaby, filed petitions in April to void their sales contracts and walk away from their purchases.
They are claiming that the contracts are not valid because the developer, Thind Properties, did not disclose a material fact in its marketing of the units when it failed to note it faced a $12 million Canada Revenue Agency tax bill in 2023 and the suspension of warranty insurance and building permits in 2024.
The Eclipse project was placed under creditor protection in January 2025 when KingSett reported that Thind owes it more than $189 million. The building was almost finished at that point, but construction was halted and KSV Restructuring was appointed by the court to manage its completion.