Kendrick Lamar owns a parcel of land in Charlottetown, Prince Edward Island. He decides to construct a building on his land for his music directing business, hoping to take advantage of Canada's support of the local music industry. He hires Drake Construction to construct the building. The contract price with Drake Construction is for $12,000,000. Kendrick estimates that the costs for permits, surveying, legal fees and closing costs will be $200,000. Bank of Montreal has approved mortgage financing in the amount of $9,000,000. Kendrick has saved money from his music and his appearance at the Super Bowl, for the balance of funds of $3,200,000. Bank of Montreal issues 3 mortgage draws as construction of the building proceeds. Eventually, Drake Construction completes the building and the final draw of financing is issued by Bank of Montreal when the building is substantially completed on July 31, 2025.

Of the total mortgage financing that has been issued ($9,000,000), 15% or $2,700,000 is retained by Bank of Montreal as a mechanic's lien holdback (and not paid to Drake Construction). Drake is irate when he finds out that he will have to wait for some period of time before receiving the rest of the money for the building construction. He demands immediate payment from Kendrick, but Kendrick says nothing; he just lays a beat down on Drake; Peace! On what date will the holdback of $2,700,000 be released to Drake Construction?

Question

Kendrick Lamar owns a parcel of land in Charlottetown, Prince Edward Island.  He decides to construct a building on his land for his music directing business, hoping to take advantage of Canada's support of the local music industry.  He hires Drake Construction to construct the building.  The contract price with Drake Construction is for $12,000,000.  Kendrick estimates that the costs for permits, surveying, legal fees and closing costs will be $200,000.  Bank of Montreal has approved mortgage financing in the amount of $9,000,000.  Kendrick has saved money from his music and his appearance at the Super Bowl, for the balance of funds of $3,200,000.  Bank of Montreal issues 3 mortgage draws as construction of the building proceeds.  Eventually, Drake Construction completes the building and the final draw of financing is issued by Bank of Montreal when the building is substantially completed on July 31, 2025. 
 
 Of the total mortgage financing that has been issued ($9,000,000), 15% or $2,700,000 is retained by Bank of Montreal as a mechanic's lien holdback (and not paid to Drake Construction).  Drake is irate when he finds out that he will have to wait for some period of time before receiving the rest of the money for the building construction.  He demands immediate payment from Kendrick, but Kendrick says nothing; he just lays a beat down on Drake; Peace!  On what date will the holdback of $2,700,000 be released to Drake Construction?

Answer

never; the holdback amount is damages for laying a beat down

Answer

August 1, 2025 (first day of the month after substantial completion)

Answer

July 31, 2025 (date of substantial completion)

Answer

September 14, 2025 (45 days after substantial completion)

Answer

September 29, 2025 (60 days after substantial completion)

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Kendrick Lamar owns a parcel of land in Charlottetown, Prince Edward Island. He...

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