WHEREAS there is a practice of presales of housing units scheduled to be constructed; AND WHEREAS there have been instances of contractors who have failed to honour the agreed-to presale price for buyers who have entered into a contract with the seller: THEREFORE BE IT RESOLVED that the Union of BC Municipalities request that the provincial Office of Housing and Construction Standards review provincial requirements for presales of housing units to ensure that buyers who commit to a purchase are protected against the cancellation of their contracts by the builder.
MINISTRY OF FINANCE The marketing of new developments, including pre-sale homes, is regulated by the Superintendent of Real Estate Superintendent under the authority of the Real Estate Development Marketing Act Act. The Act protects consumers by requiring the developer to make certain disclosures to prospective purchasers, and requiring that deposits paid to a developer are to be held in trust by a lawyer, realtor, or notary public. In the recent instances of developers failing to honour the agreed-to presale price, the requirement that deposits be held in trust helped to ensure that the original purchasers had their deposits returned. The Superintendent has been actively involved in monitoring and addressing developer non-compliance and in recent months was able to order developers to stop the remarketing of homes that were the subject of pre-sale agreements on the basis of inadequate disclosure under the current rules. To assist consumers in understanding the purchase they are considering, the Superintendents information bulletin, available on the Financial Institutions Commission website, outlines the risks involved in pre-sales. In addition, during the fall of 2007, the Superintendent and the Ministry of Finance reviewed the need for additional measures to help prospective buyers make informed decisions when considering pre-sale agreements. As a result of this review, consultations were undertaken with a range of stakeholders prior to creating two new Superintendents Policy Statements, which require additional disclosure and took effect in November, 2007. Additionally, after further consultation with stakeholders, two existing Policy Statements were amended and took effect in January, 2008. The amended policies enhance the regulatory powers of the Superintendent and, thereby, improve protection for purchasers in relation to the marketing of pre-sales.