Beginning April 1, 2018, if a consumer is buying a new condominium in Alberta from a developer – an Alberta lawyer must hold the buyer’s purchase deposit in trust while the condominium is being built. Service Alberta announced this change in October 2017.
Prior to April 1, a real estate brokerage or the condominium developer could hold a buyer’s deposit in trust. Real estate professionals who are representing buyers during their purchase of a new condominium from a developer should confirm the developer uses a lawyer who is an active member of the Law Society of Alberta, and that they operate a trust account under the Legal Profession Act. You must also ensure your clients write their deposit cheques to the developer’s lawyer, in trust, and not to the developer or a real estate brokerage.
Under this new rule, a developer who receives a buyer’s deposit must ensure their lawyer deposits it in the lawyer’s trust account within three business days of receiving it. If the developer agrees, a buyer can have their own lawyer hold their deposit in trust.