Document background
Forward Funding Agreements are essential instruments in Canadian real estate development, typically used when a developer requires funding for a construction project and a funder is willing to commit to purchasing the completed development. These agreements are particularly relevant in large-scale commercial, residential, or mixed-use development projects where traditional financing methods may not be suitable. The Forward Funding Agreement establishes the entire framework of the development funding relationship, including payment structures, construction requirements, quality standards, and risk allocation. It must comply with Canadian federal and provincial regulations regarding financial services, securities, and property law. The document is crucial for projects requiring substantial upfront funding and provides security for both the developer's construction obligations and the funder's purchase commitment. This type of agreement is commonly used in major urban centers across Canada where significant development projects are undertaken.
