Is a GTA real estate deal that sounds like paradise too good to be true?

A million dollar-plus home in the Greater Toronto Area's hot real estate market for only $700,000. A five per cent down payment. A 30-year mortgage at a 2.75 per cent interest rate. Those were the appealing terms of a real estate deal that local realtor Horace Dockery said has been circulating in Toronto's Black community since last summer.

The offer was for pre-construction homes in developments constructed by Paradise Developments Inc. a licensed developer currently building homes in the GTA communities of Pickering, Whitby, Brampton, Aurora and Vaughan.

Dockery said the seller Paradise Development Homes Limited (PDHL) had a nearly identical name to the builder, and a private lender called Empire Finance would provide mortgage financing.

To Dockery, who is Black, the terms weren't an indication of a great deal, but rather one of several major red flags that prompted him to post a warning in a Facebook group for members of Toronto's Black community interested in real estate.

"The numbers didn't make sense or add up,"Dockery told CBC News. "Those are the alarm bells that sort of sent my spider senses off, and I was like, 'There's a problem here.'"

His post alleged a group of men were selling Paradise Developments Inc. homes but convincing buyers to provide deposits to the company with the similar name Paradise Development Homes Limited. In his post, Dockery said anyone who gave money to that company would be "homeless"and "out a lot of money."

"Our community is the main target,"the post reads. "If it is too good to be true, it typically is."

CBC News conducted a monthslong investigation that revealed Paradise Developments Inc. has been trying to prevent a number of individuals and companies including two that have used the similar-sounding name from collecting deposits for homes in its developments.

The numbers didn't make sense or add up. Those are the alarm bells that sort of sent my spider senses off.- Horace Dockery, Toronto real estate agent

The investigation raises concerns about who is running those companies and whether they're doing business legally. Amid all this, questions remain for buyers whose closing dates are still months or a year away and who have collectively put down hundreds of thousands of dollars.

CBC News spoke to more than 10 people who say they either gave deposits to individuals connected with PDHL or Empire Finance, have friends or family who made payments, or who heard the sales pitch in person but didn't invest. Most, but not all, are members of the Black community. Some raised concerns about the validity of the deals, while others believe they have legitimately purchased a home.

• If you have information about this story, please reach out to CBC Toronto at torontotips@cbc.ca and use the subject line "Developer Story."

Most wouldn't go on the record due to fear of losing out on the deal, fear of offending community or family members who bought in, or because they are waiting for their closing dates.

CBC News can't say for certain if these deals are legitimate, because the buyers'closing dates are in the future.

Companies offered low rates, weren't registered

Dockery, who is also a licensed mortgage broker, said there is "no way"a private lender would offer such a low mortgage rate.

Ron Butler, founder of Butler Mortgage and a 27-year industry veteran, agreed.

"The concept that a private mortgage can be offered at 2.7 per cent is so ridiculous, so impossible, that they should have picked a better number,"he said.

A typical interest rate offered by a private lender over the past year or so would be in the range of 6.5 to eightper cent, Butlersaid.

Butler pointed out that to offer a 30-year-mortgage, a lender would need to have securitized billions of dollars worth of mortgages, something only large institutions such asbanks have the ability to do.

Another red flag toButler was the fact that PDHL and Empire Finance weren't registered as approved lenders with the Canada Mortgage and Housing Corporation,which,under the National Housing Act, they must be in order to offer mortgages with a fiveper cent down payment.

Agreement warned buyers not to talk to builder

A draft purchase agreement provided to a potential buyerby PDHL for a home at the Seaton community in Pickering, Ont., where Paradise Developments Inc. is building homes, contained irregular clauses, according to Dockery.

CBC News reviewed thatagreement.

The agreement lists the model for sale as "The Eaglewood" a 2,360 square foot detached home that is one of dozens built by Paradise Developments Inc. The purchase price is $705,000, and the deposit amount is $35,250.

Dockery said when he contacted Paradise Developments Inc., he learned houses at Pickering Seaton weren't on the market yet and hadn't even been priced, something CBC News later confirmed.

This is information he says potential buyers would know if they contacted the builder, which the agreement reviewed by CBC tells them specifically not to do.

One clause states that the buyer risks losing their deposit if they share information about the deal or contact the builder (Paradise Developments Inc.); a section stating the buyer should consult a lawyer is crossed out.

"They don't want you to ask questions, and they don't want you to share it so you can be informed,"said Dockery. "That was the biggest concern for me."

What the developer says

In a statement, Paradise Developments Inc. said it has no connection to or business relationship with Paradise Development Homes Limited or Empire Financeand that the two companies have no right to be marketing or selling its homes.

In spring 2021, the developer became aware of "illegal real estate activities and improper use"of its name, marketing and corporate materials, according to an email sent in May by Daniel Salerno, vice-president for operations, sales and marketing at Paradise Developments Inc.

"We immediately retained legal counsel and began an investigation,"he wrote.

That investigation revealed use of the developer's marketing materials on Facebook Marketplace, he said. After Paradisecomplained, the platform removed the posts.

He said the developer informed police in Peel and Toronto and sent out cease and desist letters in 2021 to Paradise Development Homes Limited and another company called Estate Financial.

"Our counsel asked that any deposits be returned to the affected purchasers or potential purchasers,"said Salerno.

He said a second round of letters was sent once the lawyers learned a new company with the name Paradise Development Homes Limited had been incorporated at the end of 2021but with different corporate leadership.

Peel police said in a statement in May that they were investigating a situation similar to what Dockery described in his Facebook post.

A tale of two companies

Two corporations with the name Paradise Development Homes Limited have been incorporated within the last year and a half, documents filed with the Ontario Business Registry show.

The registry contains the only online documentation for either company. CBC News could not find a website or social media account associated with them.

The first PDHL was incorporated in February 2021, with an individual named Hassan Zafar as its sole director, according to its articles of incorporation.

That company changed its name on Oct. 28, 2021, to Dezi Cars and Autobody Limited and then to Dezi Development Corporation on Feb. 16, 2022, registry records show.

Paradise Developments Inc. told CBC News that in 2021, it petitioned the provincial ministry responsible to force the name change. A spokesperson with the Ministry of Public and Business Service Delivery confirmed this.

A new, separate company called Paradise Development Homes Limited was incorporated on Dec. 24, 2021 two months after the first changed its name.

This time, the company listed a different director on its incorporation documents Conan J. Hamdani, a 38-year-old Milton resident. In June, at an unrelated plea hearing, an Ontario court judge called Hamdani a "career fraudster."

In 2008, Hamdani was sentenced to 31 months in jail after he and his father were accused of producing and possessing fake passports, traveller's cheques and money orders. In the 14 years since, he has been charged with multiple criminal offenses including fraud, most recently in June 2022.

While there is no public link between the two PDHL companies, CBC News has uncovered a connection.

Purchase documents obtained from the online incorporation company hired to register the second firm show Zafar placed the order to incorporate it on Dec. 23, 2021, listing Hamdani as its sole director.

When reached by phone in June, Hamdani said he was unaware he was listed as director and knew nothing about the company.

"This is not my company, and I don't own it," he said."I've never registered this company. Maybe somebody did something under my name."

Zafar did not respond to multiple attempts to reach him by email, phone and at his Etobicoke home.

Paradise Developments Inc. confirmed one of the cease and desist letters it sent in 2021 went to Zafarwhile a second was sent to Hamdani this year.

The developer also launched another objection against the second PDHL upon learning of its existence this year. The ministry spokesperson confirmed in late June that it issued a certificate of amendment forcing the second company to change its name to 1000063697 Ontario Limited.

Zafar, Hamdani and the companies that list them as directors are not licensed as vendors with the Home Construction Regulatory Authority (HCRA), which they legally have to be to build and sell homes in Ontario.

The HCRA said it hasn't received any complaints about this situation.

Mortgages, financing and deposits

When people approached Dockery with information about the real estate deal, they told him the mortgages for homes purchased through PDHL were being provided by Empire Finance, which is not registered as a company in Ontario.

Empire Finance had its headquarters on the fourth floor of an office building at 2 County Court Boulevard in Brampton, Ont. That address appears ona business card belonging to a man named Moiz Kunwar, whom a source told CBCmet them at the office to talkabout a potentialdeal for homes in a Paradise Developments community.

The card lists Kunwar as president.

According to the description on the cardand an archived version of its website, the company is involved in mortgages, private lending and pre-construction development.

CBC News spoke to four individuals who did not want to go on the record who indicated Kunwar was offering deals on homes in Paradise Developments Inc. communities as recently as this spring. Two of those sources said they or others they know paid their deposits to PDHL.

Some said Kunwar told them he provided an early investment to the established developer in return for access to discounted homes. They alleged he pledged to provide mortgage financing and collected deposits from would-be buyers, sometimes in person at the Brampton office.

The fourth floor of the building is also the address of the second company formerly known as PDHL, according to its articles of incorporation.

Two sources said Kunwar has returned deposits to buyers who got cold feet.

'I'm not going to have a home'

This isn't the first time concerns have been raised about Kunwar's real estate dealings.

Toronto resident Guerline Cribe told CBC News that she and her son, Edward Noel, met Kunwar at his home in May 2020 and signed a purchase agreement for a brand new three-bedroom townhouse in the New Kleinburg subdivision being built by Paradise Developments Inc. in Vaughan, Ont.

Noel says he gave Kunwar a $10,000 bank draft to secure the $545,000 property. CBC News viewed a photo of the draft.

"You have to have a house in order to build your wealth,"Cribe said in an interview at her Toronto hair salon.

"So, I was thinking: 'Oh, finally, I'm going to move forward with that.'"

WATCH | Guerline Cribe discusses meeting Moiz Kunwar:

Toronto woman describes meeting Moiz Kunwar to buy home

2 years ago

Duration 1:03

Toronto resident Guerline Cribe describes visiting Moiz Kunwars home with her son in May 2020 to sign paperwork to buy a home in Vaughan, Ont. Kunwar denies any involvement with selling homes.

Cribe said Kunwar had represented himself at that time as the president of a mortgage company called I.L.Y.A.S. Pvt. Ltd., which isn't registered anywhere in Canada.

Photos of the signed sales agreement, viewed by CBC News, listParadise Development Inc. no 's'in development as the sellerand listKunwar as the person to whomcheques can be made payable.Kunwaris also listed as president, although it's unclear for what company.

The document lists the terms of the 30-year mortgage:monthly payments of $1,526.23 at an interest rate of 2.7 per cent.

Cribe and Noel were supposed to take possession of the home in March 2022. Five months later, they're still without keys despite multiple attempts to contact Kunwar.

Cribe says she has mixed feelings about the situation.

"We in the community, Black community, we're so used to people doing bad things to us."

Without a home, Cribe said the plan she had for herself is gone, and she must continue renting for now.

"I'm supposed to have a home, and I'm not going to have a home, so that's going to be like a step back,"she said.

In its statement, Paradise Developments Inc. said Kunwar has no authority or legal right to sell any of its properties, including those in the New Kleinburg community where Cribe and Noel thought they would be living by now.

Kunwar denies being responsible for deals

Salerno, the vice-president of Paradise Developments Inc., said cease and desist letters were sent to Kunwar and Estate Financial in 2021 after its investigation connected them.

Estate Financial also isn't registered as a company in Ontario and has little presence online.

Kunwar, Paradise Development Homes Limited, Empire Finance and Estate Financial aren't licensed to sell mortgages in Ontario, according to Ontario's Financial Services Regulatory Authority (FSRA). The authority notes on its website that it's illegal to act as a mortgage agent or broker without a licence.

CBC News repeatedly contacted Kunwar to arrange an interview. After he didn't respond to a detailed list of questions sent by email, CBC News spoke to him outside his home in Brampton on June 16. He denied any involvement in real estate. On a phone call later that day, he said he works as a cryptocurrency investor and does construction on the side.

When reached again by phone weeks later, Kunwarsaid hepassed on information about the deals to people he knewbut denied taking deposits.

He said he had put down deposits for two homes himself and expressed concerns over his investmentsbut wouldn't provide any documentation.

"I told friends that told friends, and those friends contacted me via cellphone and said,'Hey, what did you do? What's going on? We're hearing [about] this deal,'"he said.

"I said,'Bro, this is exactly what I did. This is the guy. If you want to go see him, here's his number go talk to him.'That's all I did. I didn't meet nobody. I didn't see nobody."

Kunwar said another man was responsible for the deals, but CBC News could not reach that person using the contact information Kunwar provided.

WATCH | Home ownership powerful motivator, mortgage expert says:

Desire to own may make home buyers less vigilant, expert says

2 years ago

Duration 0:27

Mortgage expert Ron Butler says the desire to own a home is so strong among many Greater Toronto Area residents that they may ignore red flags when it comes to real estate deals.

Hot housing market creates desperation, realtor says

Dockery, the Toronto realtor, says a historical lack of access to financing and home ownership, combined with a general desperation for affordable housing in Toronto, may have made the Black community a target.

He also said the way news of the deals spread may have contributed to how willing people were to believe them.

"You're not going to dig as much if someone your church pastor or your church elder says,'Hey, this is a great opportunity, believe me.'"

As someonetrying to educate the community about the ins and outs of the real estate business, Dockery said he finds the situation unfortunate.

"There needs to be more awareness put out and action by the authorities to stop this,"he said.

In his view, these too-good-to-be-true deals are exactly that: A way to attract unsuspecting people dreaming of home ownership to part with hefty deposits they might never get back for homes they'll never live in.

• If you have information about this story, please reach out to CBC Toronto at torontotips@cbc.ca and use the subject line "Developer Story."