On November 5, 2018, the provincial government of British Columbia approved amendments to the Real Estate Development Marketing Act and the Real Estate Development Marketing Regulations, in order to facilitate disclosure of information to provincial and federal authorities. Effective January 1, 2019, these amendments will require developers to (among other things):
- include certain prescribed terms and notices in their purchase agreements and their disclosure statements, in order to inform buyers of information collection and reporting requirements (which are triggered by an assignment of a purchase agreement);
- collect certain prescribed information from assignors and assignees of purchase agreements;
- on a quarterly basis, report the prescribed information to the Condo and Strata Assignment Integrity Register, a database for tracking assignments of purchase agreements for presale strata lots, administered by the Land Title and Survey Authority of British Columbia through an online platform; and
- collect and retain assignment agreements for a prescribed period of time.
As a result, and as further set out in the Superintendent of Real Estate's draft Policy Statement 16, relating to the amendments, we expect that developers in the process of marketing or selling strata units will have to update their purchase agreements and their disclosure statements to make reference to the above collection and reporting requirements. Additionally, we expect that developers who have pre-sold all of their units will still need to amend their disclosure statements. However, developers who have transferred title to all strata lots within their development will not need to amend past disclosure statements.
Before developers consent to any assignments of purchase agreements, developers must ensure that they have collected certain prescribed information from all parties to the assignment. Developers should be aware that the amendments define "assignment" very broadly to effectively mean any change in who the purchaser is. For example, adding the purchaser's spouse to a transfer of title will be considered an assignment. Accordingly, developers should obtain assignment agreements for any such changes, and collect and report the prescribed information.
The amendments pose onerous restrictions and obligations on developers. Since developers who do not adhere to the above disclosure requirements may face significant fines and penalties, we advise developers to seek legal advice with respect to the amendments as soon as possible. Members of Clark Wilson's Commercial Real Estate group are contacting our clients on an urgent basis to assist them with compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.