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.
For more information in respect of the amendments and the Condo and Strata Assignment Integrity Register, please view the following:
BC Home Sales to Rise in 2019
BCREA 2018 Fourth Quarter Housing Forecast
Vancouver, BC – November 8, 2018. The British Columbia Real Estate Association (BCREA) released its 2018 Fourth Quarter Housing Forecast today.
Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 23 per cent to 80,000 units this year, after recording 103,768 residential sales in 2017. MLS® residential sales are forecast to increase 12 per cent to 89,500 units in 2019. The 10-year average for MLS® residential sales in the province is 84,800 units.
“The marked erosion of affordability and purchasing power caused by the mortgage stress test and rising interest rates continue to be a drag on the housing demand,” said Cameron Muir, BCREA Chief Economist. “However, continuing strong performance in the economy combined with favourable demographics is expected to push home sales above their 10-year average in 2019.”
Despite the mortgage policy drag on the sector, strong performance of the BC economy continues to be highly supportive of housing demand. Five consecutive years of above trend growth in the province has led to a high level of employment and an unemployment rate that appears to be at a cyclical low.
The combination of fewer home sales and a larger inventory of homes for sale has helped trend most markets to balanced conditions. As a result, home price growth has slowed considerably, and is expected to more closely reflect overall consumer price inflation through 2019. In addition, a record number of homes are under construction in BC, which will provide for much needed expansion of the housing stock and greater price stability.