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BCFSA’s information is clear, concise, easy-to-read explanations of the requirements for real estate professionals under the Real Estate Services Act (“RESA”), Real Estate Services Regulation (“Regulation”), Real Estate Services Rules (“Rules”), and other applicable legislation.
This information is intended for use by real estate professionals, to support their understanding of the standards they must meet in the delivery of real estate services.
Just like RESA, REDMA is legislation that protects consumers purchasing a new home from a developer. This legislation outlines the rules and regulations that developers must follow when selling or leasing development property. REDMA is enforced by BCFSA, which ensures that developers provide full information and deposit protection for all consumers when marketing new developments.
Not all new developments or presales are governed under REDMA so it is important to know and advise your client when they are protected by that legislation and when they are not.Learn more about presales
Unlike resale transactions where deposits are usually held by a brokerage as stakeholder per RESA, any deposit relating to a new development unit purchase is held according to the provisions in REDMA. This applies to developers holding deposits with their lawyers or notaries and instances where a brokerage has been tasked with holding the funds.
Under REDMA, all deposits received from purchasers must be held in trust by a notary, lawyer, or real estate brokerage. When a brokerage holds the funds, they must do so as a trustee. Like RESA, there are different provisions for when the funds can be released. While a trustee holds the funds for both the developer and buyer (as would a stakeholder), a trustee can withdraw the funds:
- If the money was paid into trust in error;
- To the purchaser with the written consent of the purchaser and developer;
- In accordance with REDMA’s allowance for the developer to use the funds under specific circumstances;
- In accordance with a purchaser’s rights of rescission;
- In accordance with RESA’s section on unclaimed funds;
- In accordance with RESA’s section on paying funds into court;
- In accordance with a court order; and
- In accordance with the Regulations under REDMA.
The trustee must release the deposit funds to the developer if the developer certifies in writing:
- That the purchaser’s right of rescission has ended;
- That the subdivision plan, strata plan or other plan has been deposited in the appropriate land title office (if required);
- The approvals required for the lawful occupation of the development unit have been obtained, and;
- As applicable:
- The interest has been registered in the appropriate land title office and an instrument evidencing the registration has been delivered to the purchaser if all or part of the purchaser’s interest in the development unit is registrable in a land title office, or
- An instrument evidencing the interest of the purchaser has been delivered to the purchaser if all or part of the purchaser’s interest in the development unit is not registrable in a land title office;
- As applicable:
- The purchaser has failed to pay a subsequent deposit or the balance of the purchase price when required by the purchase agreement under which the deposit held by the trustee was paid;
- The developer elects to cancel the purchase agreement because the purchaser failed to pay a subsequent deposit or the balance of the purchase price when required under the terms of the purchase agreement, so the amount of the deposit is forfeited to the developer; or
- The developer has elected to cancel the purchase agreement.
For information on real estate brokerage trust accounts, and how they are governed under RESA, please click here.
Employees of developers who facilitate trading services on behalf of the developer are exempt from licensing under RESA Regulations. Employees can work for one or more developers as an employee but cannot work as a third-party contractor for any of them. More information on licensing exemptions can be found in the Regulations.
All assignments of contracts of purchase and sale for development properties are governed under REDMA. REDMA dictates that, unless expressly prohibited by a developer, all contracts must contain default language that prohibits the assignment of the contract by a purchaser without the consent of the developer.
When an assignment is permitted, the developer must collect specific information from the parties to the assignment including:
- The identity of the parties to the assignment;
- The parties’ contact and business information; and
- The terms of the assignment agreement.
REDMA further outlines what documentation is satisfactory for verifying the information required above. You must ensure you are familiar with what must be provided to a developer under REDMA if your buyer client wishes to assign their contract so that you can provide accurate advice to your client.
For more information on property assignments, please click here.
REDMA outlines the preliminary requirements or approvals a developer must meet to gain approval for the early marketing of development property. A real estate professional must ensure that the developer has the required approvals to market their development. Without proper authorization, the developer is not permitted to market a unit for sale.
First, depending on the type of development unit being marketed, a developer would typically seek development approval from the appropriate government authority. They must also receive permission from the superintendent to begin marketing. The superintendent may grant full permission or attach mandatory conditions. The superintendent is also able to revoke that permission at any time.
Policy Statement 5 sets out the circumstances in which the superintendent’s permission to begin marketing is deemed to be granted to a developer. The developer must comply with any terms or conditions laid out in the superintendent’s policy statements.
Additionally, to market a development property, a developer must ensure arrangements are made to assure the purchaser’s title or other interest for which the purchaser has contracted and to pay the cost of utilities and other services (i.e. secured financing to complete the project). The developer must also file a disclosure statement in accordance with REDMA.
For information on real estate advertising governed under RESA, please click here.
(a) What Must Be Included
Disclosure statements must be provided to all purchasers of development units. Every disclosure statement must:
- Be in a written form and include content dictated by the superintendent;
- Disclose all material facts;
- Set out purchaser’s rights of rescission; and
- Be signed.
Any consumer may also request to review a copy of a development disclosure statement at the superintendent’s office. For a fee, consumers are also able to receive a copy of a disclosure statement.
(b) Providing Disclosure Statements to Purchasers
Developers must provide a copy of the disclosure statement to all purchasers prior to entering into an agreement to purchase. The purchaser must have ample time to review the document and return a written statement confirming that they have read or had an opportunity to review the document before the contract can be executed.
(c) Other Forms of Disclosure Statements
When representing a developer, you must also be aware that other forms of disclosure statements may be required. These include:
- Consolidated disclosure statements; and
- Phase disclosure statements.
Please refer to REDMA to understand the requirements for each.
If a developer’s disclosure statement is non-compliant, additional steps must be taken. In some instances, a new disclosure statement may need to be filed with the BCFSA. Review the requirements in REDMA for more information.
For information on disclosures which must be made by real estate professionals, please click here.
Depending on the reason and the timeframe, consumers are given opportunities to rescind an offer to purchase a property. This may even happen after title to the property has been transferred. REDMA outlines some scenarios that you must be aware of when representing either developers or buyers in a transaction. Below are some of the reasons a purchaser may or may not be able to rescind an offer.
- A purchaser has no right of rescission under REDMA if they are not entitled to a disclosure statement.
- A purchaser can exercise their right of rescission by providing written notice within seven days after the later of:
- The date that the purchase agreement was entered into; or
- The date that the developer obtained a written statement from the purchaser acknowledging they had read the disclosure statement or a new disclosure statement that was provided under REDMA.
- The purchaser may rescind the contract at any time by providing written notice if they did not receive a disclosure statement they are entitled to per REDMA:
- This does not apply if the purchaser does not receive an amendment to a disclosure statement, or a disclosure statement they are entitled to, as a result of making a request for one.
- The purchaser may rescind the contract through written notice if they do not receive an amendment to the disclosure statement they are entitled to, and:
- The amendment relates to something that is material on the earlier of the date on which the notice of rescission is served on the developer or the date on which the purchase agreement requires the developer to transfer title;
- The amendment is related to a fact or proposal to do something that would be reasonably relevant to the purchaser in deciding to enter into the agreement; or
- No more than one year has passed after the transfer of title or the other interest for which the purchaser may have contracted.
If a developer is served with a valid notice of recission they must immediately inform the party who is holding the deposit. The party holding the deposit must then promptly return the deposit to the purchaser.
If a purchaser serves a rescission notice after title transfer, the developer may apply to the court to collect market rent for the time the purchaser had title to the unit.
Refer to REDMA for more information on rescission requirements and developers’ obligations.
CSAIR is a database of assignments of purchase agreements for all residential condo and strata lots in B.C. that are governed by REDMA. It does not apply to any bare land strata lots, or resale transactions for strata lots that are marketed by “developers” as defined in REDMA. It only applies to marketing of building strata lots of five or more lots by developers. The CSAIR contains information about the assignment and may include some personal information about the assignors and assignees.
This information, while kept confidential by the Ministry of Finance, is shared with CRA to ensure appropriate taxes are assessed. The information also helps inform future tax and housing policies.
If you are involved in a transaction with the assignment of a presale contract, that information may be captured in CSAIR. Please click here for guidance on CSAIR and presale assignments. Please go to Condo and Assignment Integrity Register for more information on CSAIR.