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. Normally, these deposits can be unlocked by the insurer to cover project costs as soon as a developer has reached a certain level of pre-sale, obtained construction financing and issued all necessary building permits and contracts. In addition, deposits over $20,000 may be opened to residential or non-residential units, provided there are insurance policies available to protect buyers. This is a well-known practice for financing condominium projects, while protecting buyers. The system has worked very well so far. There is really no benefit for a lawyer to release these deposits in violation of his fiduciary and legal duties, as he would expose the lawyer to significant liability without any profit. For buyers: New condominiums subject to a Tarion loan and registered with them offer you the benefit of the Guarantee Guarantee of the Tarion Deposit. Tarion`s deposit confirmation is proof of the purchaser`s guarantee for his down payment.
My advice to future buyers when buying new condominiums is to ensure that serious and experienced law firms, whose balance sheet in these transactions is known, hold their deposits as much as possible. Condos Residential housing Tarion (c) 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. The Condominium Act requires that the buyer`s money be held in a fiduciary deposit until the recommended guarantee is issued. This guarantee ensures that the buyer`s money is used only to finance the project. This news has caused great concern in the market, and while the investigation is not complete and we do not yet know whether Chos` actions were intentional or negligent – whether they acted alone or with others – condominium buyers who regularly pay substantial funds to new real estate developers – wonder how vulnerable their deposits can be in the hands of the developer`s lawyer.