This blog post highlights certain amendments to British Columbia’s Real Estate Development Marketing Act (“REDMA”) Policy Statements 5 and 6 which came into effect May 1, 2021.
Policy Statement 5 sets out circumstances under which a developer is deemed to have permission to begin early marketing of a real estate development before a building permit is issued for the development. Policy Statement 6 sets out circumstances under which a developer may market a development if the developer has not obtained a satisfactory financing commitment to pay for the cost of utilities and other services for the development. Prior to the recent amendments, the early marketing period permitted under Policy Statements 5 and 6 was nine months from the date the developer files the disclosure statement with the Superintendent of Real Estate for the development.
The amendments to Policy Statements 5 and 6, in effect as of May 1, 2021, extend the early marketing period for real estate developments from nine to 12 months for development property marketed before building permits and financing commitments are obtained by the developer for its project. All of the other provisions in Policy Statements 5 and 6, including the rights of purchasers to cancel their purchases under specified conditions after 12 months, remain in effect and are unchanged. These amendments also effectively replace Policy Statement 17 which was issued in response to the COVID-19 pandemic to grant a temporary extension of the early marketing period from nine to 12 months for developments that had their disclosure statements filed between April 17, 2020 and April 30, 2021.
In addition, the recent amendments to Policy Statements 5 and 6 effectively line up the developer’s obligation to obtain a building permit and a satisfactory financing commitment with the purchaser’s right to cancel its purchase agreement at the 12-month mark. Prior to this, the developer had a “grace period” of three months after the nine-month period to try to obtain its building permit and satisfactory financing commitment while having to temporarily cease its marketing of the development.
These amendments were introduced by the Superintendent of Real Estate in recognition of the fact that it may take longer for developers to obtain building permits as approval requirements become more complex, and that lenders have been requiring more substantial numbers of pre-sale purchase agreements before providing financing commitments.
If you have any questions about this legislative update, please contact any member of our China Group or Real Estate Group.
AssociateJisoo is a business lawyer and member of the firm’s Asia Pacific Group, Corporate Commercial Group, and Estate Planning Group.
Jisoo maintains a general business practice with a particular emphasis on implementing corporate ...
AssociateTim is an associate in Lawson Lundell's Vancouver office practicing in the Asia Pacific Group. His practice focuses on commercial real estate matters with a particular emphasis on commercial real estate development and commercial ...
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