Presale Condo Purchases in BC: What Buyers Should Know Before Signing

Buying a presale condo in BC can be an attractive option, but the contract you sign before a unit is built carries risks that many buyers don’t fully understand until something goes wrong. Knowing what to look for before you sign, and when to get legal advice, can make a significant difference.

What Is a Presale Condo Purchase?

A presale purchase is an agreement to buy a unit that has not yet been built. You are contracting with a developer based on plans, specifications, and a disclosure statement, often years before you take possession. The unit you receive may differ from what was presented at the time of sale.

Deposits: How They Work and What Protects Them

Presale deposits in BC are typically staged, with amounts due at signing and at various milestones before completion. Under the Real Estate Development Marketing Act, developers are required to hold deposits in trust. This provides some protection, but it does not eliminate risk entirely. Understanding what happens to your deposit if the project is cancelled, delayed, or if you need to rescind is essential before committing.

Disclosure Statements and Material Changes

Developers must provide a disclosure statement before you sign. This document covers the project’s key terms, strata bylaws, estimated completion date, and other material information. If a material change occurs after you sign, the developer is required to notify you and you may have the right to rescind the contract within a specified period. What constitutes a “material change” is not always straightforward, and buyers who miss or misunderstand these notices can find themselves locked in or improperly out of a contract.

Completion Dates and Delay Clauses

Presale contracts almost always give developers significant flexibility on completion dates. Delay clauses can push possession back by months or years, often without triggering any right to cancel or claim compensation. Reviewing how delay is handled in your specific contract, including whether there are outside date provisions that give you an exit, is one of the most important things a buyer can do before signing.

Assignment Restrictions and Fees

Many presale contracts restrict or prohibit assignment, which means you may not be able to sell your contract to another buyer before completion. Where assignment is permitted, developers frequently charge fees and require consent. If your circumstances change before completion, these restrictions can significantly limit your options.

Financing and Rescission Risks

Financing a presale purchase is more complicated than a resale. Mortgage pre-approvals obtained at the time of signing may not reflect lending conditions at completion, which can be years away. If you cannot secure financing at completion, you risk losing your deposit and facing a claim from the developer. The statutory rescission period in BC gives buyers a short window to cancel after signing, but once that window closes, your options narrow considerably.

When to Get Legal Advice

Presale contracts are prepared by developer’s counsel and are written to protect the developer’s interests. Common situations where buyers benefit from legal advice include:

Learn more about property disputes at McKechnie and Company or contact the firm to discuss your situation.