In our previous blog we have discussed the details of deposit protection for preconstruction condominiums. In this blog we will talk about the deposit protection for preconstruction freehold properties, and how it differs from the deposit protection for condominiums.
To recap the condominium deposits are protected by:
- Tarion up to $20,000.
- Developer is required to keep the deposits in trust but can use the funds if the funds are insured by Excess Condominium Deposit Insurance.
The above applies to condo apartments as well as condo townhomes.
For freehold properties the minimum mandatory by law protection is limited only to Tarion, but the amounts are different and is as follows:
- For the properties up to $600,000 Tarion will cover up to $60,000.
- For freehold homes with the sale price above $600,000 Tarion will cover 10% of the purchase price up to $100,000.
- Unlike for condominiums there is no requirement for the funds to be held in trust nor to be insured.
When purchasing a preconstruction property, we suggest only buying from reputable developer with a history of delivering quality projects, and avoid brand new, unknown companies or the once with a history of cancelations, unreasonable delays, or poor quality.
Please let us know if you have any questions.
Post a comment