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Tarion Warranty Corporation Bonds
These bonds enable residential condominium developers to satisfy their security requirements under Tarion's Registrar Bulletins. This security covers both purchasers’ deposit protection (up to $20,000 per unit), delayed occupancy compensation (up to $7,500 per unit) and construction deficiency claims.
Financial Benefits - The Tarion bond eliminates the need for a residential condominium developer to provide a letter of credit security to Tarion. In addition, the first $20,000 of purchasers’ deposits is eligible to be released to the residential condominium developer to assist with financing the development of the project. In comparison to a letter of credit or project-specific financing, a Tarion bond is an economical way for a residential condominium developer to keep the cost of borrowing down.
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Condominium Deposit Insurance
The Ontario Condominium Act requires that deposits paid to the developer by a condominium purchaser must be held by a prescribed trustee (lawyer) in a separate trust account.
Financial Benefits – It enables the residential condominium developer to utilize the purchasers’ deposits as a low-cost and easily accessible source of financing for the construction of the condominium project. The deposits reduce the amount of traditional bank financing required for the condominium project and thereby reduce interest costs and improve the profit margin for the residential condominium developer.
On a select basis, Berkley Surety will issue subdivision bonds as an alternative to letters of credit to the town or municipality that will accept a surety bond in lieu of a letter of credit as form of security.
Financial Benefits – It enables residential land developers to free-up valuable borrowing capacity in order to secure land development and site servicing obligations with the towns or municipalities.
Our team brings 20+ years of underwriting experience in the developer surety market. We have in-depth knowledge of the residential market place and have excellent relationships with surety brokers and industry professionals.
Contact Toronto, Canada field office
location to learn more.