“The Ontario Superior Court of Justice (Commercial List) granted the Superintendent of Financial Services’ application for a court-appointed officer to protect the interests of syndicated mortgage investors in certain real estate development projects,” the Financial Services Commission of Ontario said. “The Court appointed Grant Thornton Limited as Trustee over 11 corporations that were previously performing mortgage administration functions on behalf of syndicated mortgage investors in Tier 1 real estate development projects.”
According to a bulletin posted by FSCO, the trustee is tasked with acting in the best interest of investors.
The trustee will have the power to administer scheduled mortgage payments received by developers; take steps to address defaults; and review requests to subordinate mortgages tapped to go to construction financing.
However, “the trustee’s mandate does not extend to the developers of the Tier 1 projects,” FSCO said.
Last week, the Superintendent of Financial Services issued a cease and desist order against Tier 1 Transaction Advisory Services Inc. It also suspended the licenses of Tier 1 Mortgage Corporation, First Commonwealth Mortgage Corporation, Bhaktraj Singh, Jude Cassimy, and Dave Balkissoon for allegedly violating the Mortgage Brokerages, Lenders and Administrators Act, 2006 through the selling of a number of syndicated mortgages.
“The Financial Services Commission of Ontario (FSCO) believes these activities pose a risk to investors, lenders and borrowers. The entities named in the orders must immediately stop conducting any mortgage-related business,” FSCO said in an action notice. “They have 15 days to request a hearing before the Financial Services Tribunal. If they do not request a hearing within that time, the orders may become permanent.”
The following is a list of projects that will fall under the purview of the trustee.
- 445 Princess Street (student residences; Kingston)
- 525 Princess Street (student residences; Kingston)
- 555 Princess Street (student residences; Kingston)
- 1234 Richmond Street (student residences; London)
- 2168 Ghent Avenue (Alzheimer’s/dementia care facility; Burlington)
- 105 Garden Drive (Alzheimer’s/dementia care facility; Burlington)
- 169 Bordon Avenue North (Alzheimer’s/dementia care facility; Kitchener)
- Silver Seven (Silver Screen commercial building; Ottawa)
- 774 Bronson Avenue (student residences; Ottawa)
- Legacy Lane (townhomes; Huntsville)
- Guildwood (waterfront condominiums, Kingston Road; Scarborough)
- Vaughan Crossings (medical office building, Dufferin Street and Centre Street; Vaughan)
- 1614 Charles Street (harbourfront condominiums; Whitby)
- 28 McMurray Street (lofts/condominiums, Bracebridge)
- Keele Medical (medical office building; Toronto)
- Highlights Mississauga Condominium and Towns (Mississauga)
The regulator was successful in its application to protect investors involved with one syndicated mortgage case.