Regulatory body issues warning after condo contracts cancelled by developers
Derrick Penner
Sun
A flurry of problems in the pre-sale marketing of condominium projects has prompted the British Columbia Financial Institutions Commission (FICOM) to issue a buyer-beware reminder to consumers.
The Riverbend condominium project in Coquitlam, where the developer CB Development 2000 Ltd. cancelled 34 pre-sale contracts is a recent high-profile case. FICOM stepped in to issue a stop-marketing order against that project.
However, Ken Fraser, FICOM’s executive director for enforcement, said his staff is reviewing at least one other case where a developer cancelled pre-sale contracts. They have recently issued two other cease marketing orders and one refrain from marketing order and has sought voluntary actions to stop marketing on three other projects.
“We want to make sure that purchasers do their due diligence and know what they’re getting themselves into,” Fraser said of the bulletin.
FICOM is the provincial regulator responsible for enforcing B.C.’s real estate legislation.
Its bulletin notes that pre-selling homes prior to construction is common, but buyers have to be aware that projects may be delayed or not proceed.
Developers might also terminate pre-sale contracts if construction of their project is delayed beyond the contract’s completion date, unless both buyer and builder agree to an extension.
Every development project that makes presales must prepare a disclosure statement about the project that is filed with the provincial superintendent of real estate.
Fraser said buyers need to read the disclosure and seek the advice of a lawyer to make sure they understand it.
“What we’ve found in the past is that a number of purchasers have a tendency not to read the disclosure, or don’t understand the disclosure and rely primarily on information being given to them by the sellers or by developers or realtors,” Fraser said.
“The purchaser should enter into some independent type of review to ensure they know. . . what risks are involved going into the presale agreement.”
To see the full text of the bulletin go to FICOM’s website www.fic.gov.bc.ca/index.htm.
© The Vancouver Sun 2007
