The Fund was formed at Perth in 1974 as a result of the efforts of Stephen Cross, a Chartered Professional Accountant, and John Willson, a lawyer, to provide investment opportunities which might not otherwise be available to the individual holders of self-directed registered retirement savings plans (“RRSP’s”) and registered retirement income funds (“RRIF’s”).
The Fund is unincorporated and pools the assets of its members’ individual self-directed RRSP’s and RRIF’s for investment in mortgages and other investments authorized by Canada Revenue Agency. The Fund is limited to a maximum of 50 participants. For income tax purposes ScotiaTrust, which acts as the Fund’s trustee, issues to each investor an annual receipt for monies invested. The Fund itself is not a taxable entity.
The Fund’s fiscal year runs from January 1st to December 31st, and following preparation of the year’s financial statements by its independent accountant, Cross Street & Company Chartered Professional Accountant, a copy of same is sent to each investor including an analysis of the securities and mortgage portfolio and confirmation of the amount of his or her personal investment total.
Fund members authorize the Fund’s six-person Management Committee to manage and invest their investment. The committee normally consists entirely of investors in the Fund who serve on an unpaid voluntary basis thereby significantly reducing administrative costs. Among their duties, the committee reviews applications by persons wishing to invest in the Fund, sets the terms for mortgage applications, reviews and approves or rejects mortgage applications, ensures suitable insurance coverage on mortgaged properties and payment of property taxes, as well as providing ongoing management of the Fund. The members of the Committee have diverse backgrounds and considerable business experience in the geographical area served by the Fund.
The Fund does not employ a fixed lending rate. The Committee determines this based on several factors including market value of the property to be mortgaged, including condition and location, the financial net worth of the applicant, his or her income, a credit report and the applicant’s prior history, if any, with the Fund. Properties eligible for consideration include residential, rental, commercial, raw land and development. Construction and builder’s properties are also eligible. Second mortgages are also considered. For consistency all mortgages are processed by the Fund’s solicitors, Barker Willson Professional Corporation.