Developer Solutions

In late 2004, Lombard Canada introduced a new Division called Risk Solutions of which Developer Solutions will become an integral and significant part. All business for this new division will be written by Lombard General Insurance Company of Canada which also writes all commercial lines businesses and represents over 70% of Lombard’s total premium volume.

Developer Solutions business is focused on providing surety type products to the Canadian homebuilder and development industries. These developer surety products include :

• bonds to Tarion Warranty Corporation on behalf of condominium developers in Ontario,
• deposit insurance which permits developers to access purchaser deposits in Ontario.
   

Developer Surety Products

• Tarion Warranty Corporation Bonds:
   
  Tarion under their Bulletin #28 requires that Ontario condominium developers shall post security in amount up to a maximum of $20,000 per unit in each condominium project developed.
   
  Types of security include Bank letters of credit and surety bonds. Bonds cover all obligations of the developer to Tarion including but not limited to deposit claims, damage claims and warranty claims.
   
  Lombard bonds are accepted by Tarion and have added advantages over arranging a bank letter of credit. Often banks prefer their clients to arrange bonding to keep client capacity open for lending purposes.
   
  Bonds are priced similar to a letter of credit and are renewed for specific periods of time.
   

• Deposit Insurance
   
  The Condominium Act of Ontario permits a developer to provide prescribed security, an insurance policy, to the trustee who is holding the purchaser deposits to obtain access to those deposits to be used as a source of financing the project.
   
  Utilizing purchaser deposit through a deposit insurance facility provides another source of funds to finance a project at a much lower cost than other traditional sources of construction financing.
   
  Deposit Insurance facilities from Lombard Canada can apply to condominium conversions, commercial and industrial projects as well as new residential projects.