A buyer pays $60,000 in deposits under an agreement for a proposed condominium unit. The declarant secures them with a deposit receipt from the warranty corporation that limits its liability to the minimum the regulation allows. How is the $60,000 protected?
Correct Answer
B) The receipt covers $20,000, and the other $40,000 must still be held in trust under section 81
Under O. Reg. 48/01, s. 22(3), a deposit receipt must provide compensation of the amount paid up to $20,000, or a greater amount if the receipt provides it. A receipt that limits liability must state that any amount paid above the limit is subject to s. 81 of the Condominium Act, 1998 (s. 22(4)). Here $20,000 is covered by the receipt and the remaining $40,000 must stay in trust.
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A buyer pays a $50,000 deposit to a declarant on a proposed condominium unit. Under s. 81 of the Condominium Act, 1998, when must the declarant give the buyer written evidence that the deposit is being held in trust as the Act requires?