THE ADVOCATE 51
VOL. 80 PART 1 JANUARY 2022
A MATTER OF TIME:
DELAYS IN PRE-SALE
CONDO DEVELOPMENTS
By Edward G. Wong
Lawyers, consumers and businesspeople alike all appreciate the
hazards of making changes in real estate agreements. This article
addresses the common situation where there are delays in
either the construction start or completion dates of pre-sale residential
developments. In particular, it describes how lawyers advising both
developers and purchasers should be aware of steps that developers should
take when faced with delays. It also identifies remedies available to purchasers
under the Real Estate Development Marketing Act1 (“REDMA”).
REDMA BALANCES THE RIGHTS OF DEVELOPERS AND PURCHASERS
In British Columbia, the marketing and sale of most2 pre-sale residential
development properties are governed by REDMA. In 2004, REDMA was
introduced as legislation that “balances the developer’s need for flexibility
with appropriate consumer protection”.3 In a statement (excerpted below)
upon second reading of the bill that would later become REDMA, the Minister
of Finance spoke of how developers would benefit from simplified regulation,
as well as increased opportunities to sell at earlier stages in the
construction. Instead of a prospectus, which had been generally required
under the previous legislation,4 developers would create disclosure statements,
but the Superintendent of Real Estate would no longer need to
approve them. Purchasers would benefit from enhanced protections,
including expanded rights to rescind,5 so that a purchaser could rescind at
any time if they did not receive a disclosure statement:
The new Real Estate Development Marketing Act will provide developers
with greater certainty by consolidating requirements currently found in
legislation, regulations and policies of the superintendent of real estate.
Developers will be able to market property at an earlier stage in the
development process, prospectuses will be eliminated, and developers
will be allowed to file simpler disclosure statements in all cases …
In order to protect purchasers, disclosure statements will continue to
require full and plain disclosure of material facts. A purchaser who does