As Ontario`s reality carrier, working with investors and developers, questions have arisen in recent months after Centrust Development Group deposited money with investors before construction, when its lawyer Meerai Cho released money prematurely. Some of you may be wondering why we are addressing such a sensitive issue and, frankly, not recognizing this incident, it is as if Ebola does not matter at this time. And I really believe that over time, the system will correct the loss to investors by Tarion and other ways that will be discussed later in this article. Note: This is a first-class “starting point” article. It`s not “everything you need to know” about the process and procedures. I`m a real estate agent, not a lawyer. A “prescribed agent” is defined as a licensed lawyer in Ontario, a law firm or a deposit attorney who has entered into a trust agreement with the developer to keep the trust funds. By definition, the developer is not a licensed agent and therefore cannot keep your money. The ECDI policy is being adopted for new residential housing projects in Ontario. The ECDI Directive guarantees buyers deposits in excess of the $20,000 guaranteed by the Tarion loan.
Condos | residential | housing Tarion| Condos So, what happened in the Meerai Cho case? The matter is still under review and will take some time. What we do know is that the Province of Ontario has strict requirements for the release of deposits by the Condominium Act of 1998. Condominium Developers and lawyers are fully aware of the requirements and compliance with the law. Buyers who may have lost deposits should carefully consider their recovery options with their lawyer. Deposit Trust Agreement: Designed to keep a buyer`s deposits in a separate trust of third parties (in other words, it is not on the developer`s account), unless they are allowed to be released by the trust agent/lawyer and the required guarantee has been established. What for? In order to protect the buyer at all times, so that funds cannot be released without compliance with Section 81 of the Condominium Act, 1998. Tarion requires developers to publish guarantees to protect the buyer`s interests. Tarion must receive $20,000 per unit to protect the buyer`s deposits and provide the guarantee required by Tarion.
Although it is not mandatory to post a loan for the Tarion requirement, developers receive a loan because it eliminates the need to post a letter of credit or a cash guarantee. For the owners: these products allow them to use buyers` deposits as an inexpensive and easily accessible source of financing for the condominium project.