Bronte Lakeside project placed into receivership after construction liens and tax arrears escalate

CMLS Financial secured a receivership order on December 2 placing the Bronte Lakeside condominium project under the control of Albert Gelman Inc. after the Court found that multiple events of default had persisted for months and no credible plan existed to repay the accelerated debt. The order captures all assets of Bronte Lakeside Ltd. along with the beneficial interest of Bronte Limited Partnership in the Oakville development lands.

The project was conceived as a six-storey, 203-unit luxury condominium marketed as The Residences at Bronte Lakeside. Although the developer entered into pre-sale agreements, no structural construction ever began on the site. The financing structure included a $19.1 million mortgage advanced under a November 2024 commitment letter, supported by a general assignment of rents, a general security agreement, and an assignment of the pre-sale contracts. Bronte Lakeside Ltd. held title strictly as bare trustee for Bronte Limited Partnership which executed a parallel authorization binding it to the mortgage terms.

The capital structure began to unravel in mid-2025 when construction liens surfaced on the property. The first liens appeared in June and grew to more than $1.2 million by the fall. The mortgage required timely discharge of liens within a 10-day cure period, and the failure to meet that obligation triggered an event of default that accelerated the entire loan. CMLS demanded repayment on September 11 for approximately $18.5 million plus fees. Municipal taxes also fell into arrears in the amount of $114,239.55 as of October 2.

In addition, a creditor identified as 2604956 Ontario Inc. advanced roughly $590,000 earlier in the year in exchange for a second mortgage that was never registered. CMLS had not been informed of or consented to the transaction, which constituted another breach of the financing arrangements.

The debtor requested time to close a new $1.5 million facility intended to clear liens and pay taxes, but the proposed funding did not provide repayment of CMLS, whose debt matures next month. With the loan fully accelerated and no evidence of a path to retirement of the secured debt, the Court concluded that a receivership was required to protect the mortgagee and other stakeholders. Justice Dietrich determined that a transparent court supervised process would best maximize value and allow for an orderly realization of the property.

The receivership order grants Albert Gelman Inc. broad operational powers, including authority to take possession of the development lands, manage the property, retain advisors, market and sell the real estate, and borrow up to $500,000 under a receiver’s borrowings charge.

Counsel appearing included Blaney McMurtry for CMLS and BE Law for the respondents.