Buying a Pre-Sale Condo in BC: Disclosure Statements and the 7-Day Rescission Right

You have signed a contract for a condo that has not been built yet, and somewhere in the paperwork is a thick document called a disclosure statement. For the next seven days, BC law lets you walk away from the deal.

This article explains how that seven-day rescission right works, when the clock actually starts, what happens when the developer amends its disclosure, where your deposit goes, and what to look at closely before the window closes.

Pre-sales have their own rulebook

A pre-sale condo is sold by the developer before the building is finished, often before it is even started. In BC these sales are governed by the Real Estate Development Marketing Act, usually shortened to REDMA. Before marketing the units, the developer must file a disclosure statement with the superintendent that plainly discloses all material facts about the development.

Before you sign, the developer must give you a copy of that disclosure statement, allow you a reasonable opportunity to read it, and obtain your signed receipt confirming you had that opportunity. Keep in mind that filing is not approval: the Act says the superintendent is under no duty to assess the merits of a project or to check the disclosure statement for misrepresentations.

The seven-day rescission right and when the clock starts

Under section 21 of the Act, you can cancel (rescind) the purchase agreement by serving written notice on the developer within seven days after the later of two dates:

• The date the purchase agreement was made, and
• The date the developer obtained your written receipt acknowledging that you had an opportunity to read the disclosure statement.

For example, if you signed the contract on the 1st of the month but did not sign the receipt for the disclosure statement until the 3rd, the seven days run from the 3rd. The notice must be in writing and served the way the regulations require, which is why many buyers have their lawyer serve it.

Once the developer receives a proper notice, it must immediately tell whoever is holding your deposit, and that person must promptly return the deposit to you. The Act does not require you to pay a rescission fee. If you were entitled to a disclosure statement and never received one, you can rescind at any time.

This is a different right from the home buyer rescission period for resale homes, which gives three business days after acceptance and costs 0.25% of the price. BCFSA confirms that the three-day period does not apply to a purchase where section 21 of REDMA applies. Our article on what your lawyer does before completion day explains how the resale version works.

Amendments to the disclosure statement

Plans change over a long build. When a developer becomes aware that its disclosure statement does not comply with the Act or contains a misrepresentation, it must file an amendment (or, in some cases, a new disclosure statement) and give a copy to buyers who have not yet received title.

Receiving an amendment does not normally restart your seven days. There are narrower protections instead. If you never receive an amendment you were entitled to, and it concerns a material fact that was reasonably relevant to your decision to buy, the Act allows you to rescind, up to one year after title transfers.

Many projects are also marketed before the building permit is issued. Under BCFSA's Policy Statement 5, the developer must file an amendment with the building permit details within 12 months of filing the disclosure statement, and your contract must let you:

• Cancel within seven days of receiving that amendment if the layout or size of your unit, the construction of a major common facility, or the general layout of the development is materially changed, and
• Cancel at any time after the 12 months if you have not received the amendment by then, until you do.

Until that amendment arrives, your deposit under the policy is capped at 10% of the price. Read every amendment the day it lands.

Where your deposit goes

REDMA requires the developer to promptly place your deposit with a real estate brokerage, lawyer or notary public, who holds it as trustee in a trust account in a BC savings institution. A developer can use deposits for construction or marketing only if it has entered into a deposit protection contract (a form of insurance) for that deposit and given you notice. The disclosure statement and contract should tell you which applies, along with the deposit schedule and what happens to your deposit if you cannot complete.

What to look for before the window closes

• Completion dates. Most contracts give an estimated completion window and an outside date, sometimes called a sunset clause, after which the contract can end. Check how far the developer can push the date and on what grounds.
• Changes the developer can make. Look at how much the size, layout, finishes, parking or storage can change before you have any recourse.
• Assignment rules. Unless a developer bans assignments outright, REDMA requires the contract to prohibit assignment without the developer's prior consent. The developer must collect information about the parties and the deal, which goes to the Province's Condo and Strata Assignment Integrity Register. Since January 1, 2025, profit from assigning a contract held for less than 730 days may also attract the BC home flipping tax.
• GST. GST is charged on a newly built home. Check whether the price includes GST and whether the contract assumes you will assign a new housing rebate to the developer. First-time buyers may qualify for the federal First-Time Home Buyers' GST rebate, available in full (combined with the new housing rebate) on homes valued at $1 million or less and reduced up to $1.5 million, subject to timing and other conditions.

Why the seven days is the time for a lawyer's review

After the rescission period ends, you are generally committed to a contract that may not complete for years, on terms written by the developer. A lawyer's review during the window tells you what you have actually agreed to on deposits, delays, changes, assignment and tax, while walking away is still simple.

The disclosure statement also matters later. If it turns out to contain a misrepresentation, the Act gives buyers a claim for damages against the developer, its directors and those who signed it, and buyers are deemed to have relied on it.

Signed a pre-sale contract? Use the seven days to have it reviewed

Our real estate lawyers can review the disclosure statement and purchase contract, explain the deposit, completion and assignment terms, serve a notice of rescission if you decide not to proceed, and act for you on completion when the building is finished.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.