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In British Columbia, purchasers of development units are protected by the Real Estate Development Marketing Act. A purchase agreement is not enforceable against a purchaser by a developer who has breached the Act.
Disclosure statements describing material facts about a development are filed by the developer. If any material facts are omitted, changed or misrepresented, the developer must also file an amendment to the disclosure statement.
Purchasers are entitled to a copy of the filed disclosure statement, and a copy of any filed amendment to the disclosure statement, before entering into an agreement for sale or lease. BCFSA can investigate if a disclosure statement is deficient.
Fees for retrieval of disclosure statements and provision of copies apply. See the “Schedule of Fees” for payment information.
Pre‐sale residential units are purchased prior to the commencement or completion of construction. Risks include:
- Delays resulting in extension or termination of contract;
- Real estate price increase resulting in higher price; and
- Real estate price decline resulting in lost value.
If the pre-sale contract allows, purchasers may assign their contract to other buyers. The risks associated with pre‐sales apply to a new purchaser who is assigned a pre‐sale contract. If an assigned pre-sale contract is not completed, any assignment fee paid to the developer and any additional cost paid to the assignor may not be recoverable.
Prospective purchasers of pre-sales, or assignments of pre-sales, should carefully review the developer’s disclosure statement. Obtain professional advice from a lawyer or a licensed real estate broker prior to entering into an assignment contract.
There are several circumstances in which a purchaser may cancel their purchase agreement with a developer.
A purchaser has a seven day period after signing a purchase agreement in which they may cancel the agreement by serving written notice to the developer.
A purchaser may cancel a purchase agreement if they are entitled to a disclosure statement but do not receive one, or if a disclosure statement contains a misrepresentation or an omission.
If satisfactory financing commitments or building permits have not been obtained nine months after the initial disclosure statement was filed, and an amendment is not received within 12 months after the initial disclosure statement was filed, a purchaser may cancel the purchase agreement at any time after the end of that 12 month period until the required amendment is received.
All deposits paid by a purchaser, including interest earned, if applicable, must be returned promptly to the purchaser upon cancellation of a purchase agreement.
Purchasers have the right to pursue a civil claim against a developer and its directors for any misrepresentation. Purchasers can also seek compensation for misrepresentations or omissions. Under contract law, a purchaser may ask a court to order compensation as a remedy for any breach of contract.