Non-Recourse Loan

Learn about non-recourse loans in Canadian real estate — what they are, how they protect borrowers, and when they’re used.

Non-Recourse Loan

August 08, 2025


What is a Non-Recourse Loan?

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not personally liable for any deficiency.

Why Non-Recourse Loans Matter in Real Estate

In Canadian commercial real estate, non-recourse loans limit borrower liability and protect personal assets.



Key points:
  • Commonly used for income-producing properties
  • Lender’s recourse is limited to the collateral property
  • May include 'carve-outs' for fraud or other specific events



Understanding non-recourse loans helps borrowers evaluate risk exposure.

Example of a Non-Recourse Loan in Action

The developer obtained a non-recourse loan, ensuring the lender could only claim the property if the loan defaulted.

Key Takeaways

  • Limits lender’s remedies to the collateral property
  • Protects borrower’s personal assets
  • Often used for stabilized income properties
  • May contain exceptions for bad acts by borrower
  • Important consideration in financing negotiations

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

Leasehold Estate

A leasehold estate is an interest in real property where a tenant holds the right to use and occupy the property for a specified term under a lease. more

More For You

Amacon Proposing Two Towers Near Broadway And Burrard In Vancouver

​A rendering of the two towers proposed for 1745 W 8th Avenue in Vancouver.

A rendering of the two towers proposed for 1745 W 8th Avenue in Vancouver. / Chris Dikeakos Architects, Amacon

Vancouver was once set to become the home of the world's tallest wood frame tower, a 40-storey high-rise called Canada's Earth Tower that would also meet Passive House standards and put Vancouver on the map in terms of sustainable architecture. That project is now no longer moving forward, however. (Things are also not looking great for the Vancouver tower that was set to become the tallest passive house structure in the world.)

Canada's Earth Tower was being developed by Delta Land Development and was set for 1745 W 8th Avenue in Vancouver, which is now the subject of a new rezoning application that was published by the City this week, and which is now owned and being redeveloped by Vancouver-based Amacon.

Keep ReadingShow less

Onni Group Unveils Four Towers Up To 40 Storeys For GNW-Emily Carr Station

​Renderings of the towers proposed for 375 E 1st Avenue near GNW-Emily Carr Station.

Renderings of the towers proposed for 375 E 1st Avenue near GNW-Emily Carr Station. / Boniface Oleksiuk Politano Architects, Onni Group

Construction remains ongoing on the Broadway Subway, but the new Great Northern Way-Emily Carr Station is already standing out from the other upcoming stations in terms of transit-oriented development. The new station will be located on the eastern side of Thornton Street just north of Great Northern Way, around which PCI Developments and Low Tide Properties are already planning three towers.

On the western side of Thornton Street is 375 E 1st Avenue, a 2.55-acre site also known as "Lot P" that is owned by Vancouver-based real estate developer Onni Group, which beneficially owns the property through Onni Developments (375 GNW) Corp. under Onni 375 GNW Holdings Corp. BC Assessment values the property, currently vacant, at $122,729,000 in an assessment dated to July 1, 2024.

Keep ReadingShow less

Is Canada Entering A "Golden Era" For Investing In Seniors Housing?

Is Canada Entering A "Golden Era" For Investing In Seniors Housing?
Retirement home in Richmond, BC/Shutterstock

Alternative real estate investment firm Harrison Street Asset Management would have been one of the few investors looking to buy seniors housing in 2021, during the maelstrom of the pandemic. At the time, demand was low as operational costs soared, governments opened and closed retirement facilities, and residents became disproportionately vulnerable to contracting COVID-19, driving occupancy rates down.

But as Canada emerged from the pandemic, the narrative began to flip. The impending arrival of the nation's long-anticipated "silver tsunami" amid low supply stemming from a lack of seniors housing development during COVID-19, alongside other tailwinds like rising occupancy and declining costs, have transformed the seniors investment landscape, particularly as it relates to independent seniors living.

Keep ReadingShow less

Block Of Eglinton Ave W, Office Of TAS Sells To Skye Capital For $20.85M

Block Of Eglinton Ave W, Office Of TAS Sells To Skye Capital For $20.85M
453, 465, 481, 483, and 491 Eglinton Avenue West/TD Cornerstone Realty Inc.

A string of commercial properties along Eglinton Avenue West in the Forest Hill neighbourhood of Toronto has sold after being on the market for around nine months. This is according to a transaction announcement provided to STOREYS by TD Cornerstone Realty Inc., the firm that brokered the sale. The block of buildings at 453, 465, 481, 483, and 491 Eglinton Avenue West was offloaded to Skye Capital Partners Ltd. for a collective $20,850,000.

Records obtained from Altus Group show that 453 Eglinton Avenue West was sold for $4,750,000 (at a rate of $634 per sq. ft), 465 and 481 Eglinton Avenue West were sold for $6,850,000 (at a rate of $622 psf) and 483 and 491 Eglinton Avenue West were sold for $9,250,000 (at a rate of $236 psf). All three transactions are dated August 14, 2025.

Keep ReadingShow less

Steeles Development Site Listed With Approvals For 40, 44 Storeys

Steeles Development Site Listed With Approvals For 40, 44 Storeys
36–48 Steeles and 37-49 Highland Park/Arcadis via Colliers

A Zonix Group development site has hit the market for an unlisted price, offering developers the opportunity to erect a high-density, transit-oriented residential development at the border of Toronto and Markham. The sale of the site is being represented by Jeremiah Shamess and Matthew Soper of Private Capital Investment Group at Colliers and it currently has approvals in place for a 40- and 44-storey complex set to deliver 1,060 residential units, and potentially more.

Located at 36-48 Steeles Avenue East and 37-49 Highland Park Boulevard, the site spans 2.3 acres and is bounded by Steeles Avenue in the south, Dudley Avenue in the west, Highland Park Boulevard in the north, and single-detached dwellings in the east. Currently the site is occupied by 14 single-family homes that would be demolished upon redevelopment of the land.

Keep ReadingShow less

BC Sets 2026 Rent Increase Cap At 2.3%, Tying It To Inflation

​BC Premier David Eby at the swearing-in ceremony for his updated cabinet in July.

BC Premier David Eby at the swearing-in ceremony for his updated cabinet in July. / Government of British Columbia

On Tuesday, the Government of British Columbia announced that it will again be tying the annual rent increase cap to inflation, resulting in a maximum allowable rent increase of 2.3% in 2026.

"B.C. is an extraordinary place, but with economic uncertainty and rising costs, people are struggling to find a place to live that fits in their budget," said Minister of Housing and Municipal Affairs Christine Boyle, who was appointed to the position during this summer's cabinet shuffle. "We're continuing to cap rent increases, linking them to inflation, to reduce housing costs for seniors, families and individuals, protecting them from unfair hikes. At the same time, this rent increase allows landlords to invest in their properties to keep rental homes on the market."

Keep ReadingShow less
IN THE KNOW: BC Sets 2026 Rent Increase Cap At 2.3%, Tying It To Inflation

Withering GTA New Home Sales Have Now ‘Eclipsed’ The ‘90s Downturn

Withering GTA New Home Sales Have Now ‘Eclipsed’ The ‘90s Downturn
Shutterstock

The housing slump that’s jarred market stakeholders over the past three years is often compared to that of the 1990s in its pattern and severity, but in the Greater Toronto Area’s (GTA) new home market specifically, it seems conditions are now even a cut below that famous downturn.

The Building Industry and Land Development Association (BILD) said Wednesday that GTA new home sales “remain exceedingly low, eclipsing the 1990s downturn, with July sales remaining at low levels not seen in decades.”

Keep ReadingShow less

Lawrence Park Estate Invites You To Live In Sleek Luxury

Lawrence Park Estate Invites You To Live In Sleek Luxury

When it comes to high-calibre living in Toronto, Lawrence Park has long held its place among the city’s most coveted neighbourhoods.

Nestled on a tree-lined street, 142 Buckingham Avenue presents as a newly completed custom residence that embodies everything the enclave is known for: timeless architecture, intelligent design, and a serene sense of retreat within reach of the city’s best schools, green spaces, and social institutions.

Keep ReadingShow less
Privacy PolicyAbout UsTerms of UseAdvertise with UsJobsContact UsRSS Feed
2025 © STOREYS Publishing Inc. | All Rights Reserved