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ARTICLE · 05 OCTOBER 2010

Lenders Should Consider Remedies Under the Construction Lien Act

Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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The recent decision in Romspen Investment Corp. v. 1514904 Ontario Ltd. serves as a reminder of potential remedies that may be available to secured lenders with respect to the protection of their security over real property under construction.

CanadaReal Estate and Construction
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Real Estate–Mortgage Lending, October 2010

The recent decision in Romspen Investment Corp. v. 1514904 Ontario Ltd. serves as a reminder of potential remedies that may be available to secured lenders with respect to the protection of their security over real property under construction. Specifically, the Romspen case provides an example of where a secured lender might have benefited from the extraordinary remedies available under the Construction Lien Act (Ontario) (CLA).

In Romspen, the lender was owed more than C$11‑million, which amount was secured by first mortgages given by the borrowers on 11 properties. The borrowers, who were engaged in the business of property development and management, had difficulty completing the development of the subdivision in which the mortgaged properties were situate. The loan was in financial default and there were substantial outstanding

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