Terminated Condo Projects And Bankruptcy In Ontario Land Development

What Happens to Purchaser Deposits in the Face of a Cancelled Condo Project?

When a condo project is terminated during receivership, purchasers who have locked in deposits face uncertainty. This article explores how receivership and project termination affect purchaser deposits in Ontario and what you need to know if the agreements of purchase and sale are cancelled.

Understanding Receivership in Ontario

Receivership is governed by the Bankruptcy and Insolvency Act (BIA) and the Companies' Creditors Arrangement Act (CCAA). When a company is unable to pay its debts, a court may appoint a receiver to take control of the company's assets and operations. A receivership is a protective measure for a troubled company, managed by a receiver or trustee. During this period, the receiver handles all company operations and financial decisions, while the company's principals retain limited authority.