Godzilla & Buying a Presale or New Condo or Property in Vancouver?!
How does Godzilla relate to buying a presale condo in Vancouver?
Let’s find out!
Buying a new or off plan property in Vancouver is highly regulated by the Provincial Government with some legislation called the Real Estate & Development Marketing Act (REDMA).
REDMA was developed to protect buyers and to allow them to make an informed decision about the purchase of a new or presale property in BC.
There are three ways REDMA does this:
#1) 7 Day Rescission Period – You Can Kill the Deal for Any Reason for 7 Days AFTER an Accepted Offer.
REDMA specifically states that a buyer has 7 days from when there is an accepted offer on a new or presale property, to kill the deal for any reason. An accepted offer with a presale or new property is when the vendor or developer and the buyer have agreed to terms and both have signed the offer. This is NOT when the buyer signs the offer only! It is when the Developer or Vendor signs the offer as well. This is when there is an accepted offer. Godzilla comes into this here. Consider this example: The buyer goes to bed after getting an accepted offer before the end of the 7 day rescission period. The buyer dreams that Godzilla EATS THE BUILDING! The buyer wakes up and is, to say the least alarmed and wants to kill the deal as they believe their dreams come true. All the buyer needs to do is call their Realtor and say they want to exercise their right of rescission. The Realtor would then prepare or get a document from the vendor and have the Buyer sign it. Once the vendor receives the rescission document signed by the buyer, the deal is dead. As a door nail.
#2) All Deposits Are Held in a Trust Account.
According to REDMA all deposits paid to purchase a new or a presale condo in the province of British Columbia are generally held in a trust account. This means that if the developer or the development goes bankrupt the deposits should be protected and will be returned to the buyer. If you do have questions on this point, be sure to consult with your lawyer.
#3) Full Developer Disclosure Statement Required.
According to REDMA the developer or the vendor must have a Disclosure Statement in order to be able to sell new properties or presales in BC. The disclosure statement is a detail document that allows a buyer to make an informed decision about the purchase. Typically what you’ll find in a disclosure statement is how many units there are in a development, how big each of those units are, when you get your money back if the development is not built in time, among other things. The idea behind the disclosure statement is to allow the buyer to make an informed decision about the purchase DURING the 7 Day rescission period. If the buyer does not like the Disclosure Statement, they can kill the deal.
Remember when you’re buying a presale condo be sure to review the documents with your realtor and your lawyer and your account among others.