BILD is pleased to advise members of a significant positive change that reflects BILD and OHBA’s advocacy efforts.
As part of a legislative package introduced in March 2022 (Bill 109), a regulation was passed in April 2022 under the Condominium Act that resulted in the removal of the 2% deduction from the Bank of Canada (BOC) rate, set twice yearly, used to calculate interest paid on purchasers’ deposits. This resulted in a net increase to the interest rate of 1.75%, as the new applicable rate was to be the BOC Policy Rate, which is .25% below the BOC Rate.
The increased rate would apply to interest payable to purchasers both on an interim occupancy closing, as well as when a purchase agreement was cancelled by the vendor or by the purchaser when the outside occupancy date had not been met. This change was scheduled to be implemented on January 1, 2023, for all projects launched after that date, which would have had the potential to add significant costs to new condominium projects.
BILD and OHBA have been working with the provincial government to amend the regulation so that the new formula would apply only to deposit refunds and the previous formula continue to apply to deposits paid under closed agreements.
As indicated in the embedded correspondence, the Minister has amended the Condominium Act regulations and reverted to the previous treatment for completed projects by reintroducing the 2% deduction from BOC Rate for deposits paid under closed agreements.