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Effective Sunday, April 1, 2018, if a consumer is buying a new condominium in Alberta from a developer, the buyer’s purchase deposit must be held by an Alberta lawyer while the condominium is being built. The lawyer must be active, practising and insured, and the lawyer and law firm must be approved by the Law Society of Alberta to operate trust accounts.
The developer must deposit the buyer’s purchase deposit funds into the lawyer’s trust account within three business days of receiving the funds. Once the lawyer receives the deposit, that lawyer has 10 days to notify the buyer that the funds are in the trust account.
Alternatively, a buyer may get their own lawyer to hold the deposit, with agreement from the developer. The buyer’s lawyer must then notify the developer, within 10 days of receiving the deposit, that the funds are in the lawyer’s trust account.
Lawyers are reminded that they must comply with the cash, client identification and verification rules, and the trust accounting rules set forth in Part 5 of the Rules of the Law Society of Alberta. The new trust requirements help protect Albertans in the process of buying new and converted condominium units.
Service Alberta has prepared a Condominium Developer Infosheet about additional Condominium Property Act amendments, available at:
The infosheet provides a helpful overview of the legislative amendments. At page 12, it also identifies the circumstances in which the lawyer may release the condominium purchase deposit money, as well as the consequences of a potential breach of the purchase agreement.