When purchasing real estate, payment can come in many different forms. Unfortunately, even some of the most secure Alberta real estate transactions can be subject to problems once a seller shows up to the bank. A Calgary real estate investor recently faced this issue when the bank misplaced a certified cheque worth $415,000.
The investor's Scotiabank branch in Calgary reportedly misplaced the cheque after the investor handed it over for a photocopy to be made. After returning to the bank following a brief business meeting, the investor returned to find the cheque lost. The bank manager allegedly told the investor to sign a bond of indemnification to state that he lost the cheque, saying that would make him still liable for the amount should it be found. Later, he learned that no insurance company would issue a bond on the cheque as he was not the party who issued it.
Following these legal and bureaucratic challenges, the investor returned to the bank for a solution. However, the bank stated it wanted a 10 year hold on the funds since it does not have surety. The investor states that although his funds are frozen, the bank is still able to make interest on his money.
Alberta real estate transactions typically involve large amounts of money, and some investors or sellers may not be used to dealing with banks when such large amounts are involved. Laws and banking regulations are worth understanding at every step along the way. Those looking for legal guidance should contact a local real estate lawyer.
Source: CTV Calgary News, "Calgarian says he's drowning in interest payments and legal fees after bank refuses to release $415K", Ryan White, Feb. 8, 2018