On July 15, 2015, B.C. Reg. 138/2015 came into force, changing
the way that deposits may be handled under the Real Estate
Development Marketing Act, S.B.C. 2004, c. 41 (the
"Act") and the Real Estate Development Marketing
Regulation (B.C. Reg. 505/2004) (the
Pursuant to section 18(1) of the Act, a developer who receives a
deposit from a purchaser is required to place that deposit in trust
with a trustee. That trustee must be a brokerage, lawyer or notary
public. Once the deposit is in trust, the Act limits what the
trustee can do with the deposit.
Previously, if a developer had placed deposits in trust with a
lawyer, brokerage or notary public but wanted to move its business
elsewhere, the developer had no practicable means of transferring
the deposits to the new brokerage, lawyer or notary public. Rather,
the developer would have to implement complex arrangements to
address the fact that the deposits remained with the same trustee,
while the rest of the developer's business moved elsewhere, or
seek leave of the court to transfer the deposits.
The changes to the Regulation mean that a developer can now
instruct the trustee to transfer the deposit to another trustee,
provided that they comply with certain requirements:
the first trustee has to receive
written instructions from the developer that include the specific
name of the new trustee; and
the new trustee must also be a
brokerage, lawyer or notary public.
Provided the above conditions are met, once the deposit is
transferred, the first trustee is no longer liable for the deposit
These changes to the Act and Regulation make it easier and less
expensive for developers to transfer deposits to new trustees of
their choosing. Now a developer who wants to work with a different
brokerage, lawyer or notary public can easily transfer deposits
held in trust without having to seek a court order or make complex
arrangements for the deposits to remain with the original
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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