What does the letter of credit cost?
All banks and lending institutions vary, however to 2 percent per year of the deposit amount is charged. Check with your local bank for rates. What format of the letter of credit is used? The developer usually provides the type of letter that needs to be used. This letter has been pre-approved by the construction lender, and normally cannot be changed. Can I lose my deposit? The only way you will lose you deposit , whether it is a letter of credit or cash, is if the building is built according to the contract and you fail to close when asked. What happens if the building is not built and it was no fault of the purchaser? Your cash deposit will be refunded with interest. Your letter of credit will expire and it will not be called. What does “need not be built” mean? This means that the developer is allowed to pre-sell the condominium which has not been constructed. It also means that it may not be built if all permits and approvals are not met. In any event the consumer is protected by
