New Corporations and Real Estate Deposits
Matthew Wilson, LLB, CS
From time to time a purchaser will want to purchase real estate before the corporation that will own the real estate is incorporated. The agreement of purchase and sale might be entered into by an individual “in trust for a corporation to be incorporated without any personal liability”. Does this change what happens to the deposit if the purchaser does not close the transaction? The simple answer is no.
The Ontario Court of Appeal recently considered this question in the matter of Benedetto v. 2453912 Ontario Inc. The purchaser in this case provided a $100,000.00 deposit. The transaction did not close. The purchaser asked for the deposit to be returned, and the vendor refused.