Aman Nanda

3 Key Things You Need to Know About Buying Presale Condos

Understanding the Presale Condo Market in Vancouver

1. Take Advantage of the Seven-Day Rescission Period to Reconsider Your Purchase

In British Columbia, the Real Estate Development Marketing Act (REDMA) grants buyers a seven-day rescission period. This means you have 7 days from the acceptance of your offer on a new or presale property to cancel the deal for any reason.

Understanding the Seven-Day Rescission Period:

An accepted offer on a presale or new property occurs when both the buyer and the vendor or developer have agreed to the terms and signed the offer. It’s crucial to note that this period starts only after both parties have signed the offer, not just when the buyer signs it.

Example Scenario:

Imagine you go to bed after receiving an accepted offer. You wake up with serious doubts about the purchase. Fortunately, during the seven-day rescission period, you can still cancel the deal without any penalties.

How to Exercise Your Right of Rescission:

If you decide to cancel, simply contact your Realtor and express your intention to exercise your right of rescission. Your Realtor will then prepare the necessary document or obtain it from the vendor for you to sign. Once the vendor receives the signed rescission document, the deal is officially canceled.

Important Note:

If you do not take action before the end of the seven-day rescission period, the deal will automatically proceed. Therefore, if you have any second thoughts about your presale condo purchase, inform your Realtor as soon as possible!

 

2. Presale Condo Deposits Are Securely Held in a Trust Account

Under the Real Estate Development Marketing Act (REDMA), all deposits made for the purchase of a new or presale condo in British Columbia are generally held in a trust account. This provides an added layer of security for buyers. In the event that the developer or development faces bankruptcy, these deposits are safeguarded and should be returned to the buyer.

Understanding Deposit Security:

When you make a deposit on a presale condo, it’s placed in a trust account managed by a third party, typically a lawyer or a brokerage. This ensures that your money is protected throughout the development process.

Key Points to Remember:

  • Deposit Protection: Your deposit is not accessible to the developer until certain conditions are met, providing you with financial security.
  • Legal Assurance: If the development does not proceed or if the developer goes bankrupt, your deposit should be refunded to you.

 

Knowing that your deposit is secure can give you peace of mind as you navigate the purchase of a presale condo.

3. Developers Must Provide a Disclosure Statement to Presale Condo Buyers

In accordance with the Real Estate Development Marketing Act (REDMA), developers or vendors are required to provide a Disclosure Statement when selling new or presale properties in British Columbia. This critical document is designed to help buyers make an informed decision.

What is a Disclosure Statement?

The Disclosure Statement is a comprehensive document that includes essential details about the development. It typically covers:

  • Project Overview: The total number of units in the development and the size of each unit.
  • Financial Information: Terms for refunding your deposit if the development is not completed on time.
  • Important Dates and Conditions: Timelines for construction and other critical milestones.

 

Why is the Disclosure Statement Important?

The purpose of the Disclosure Statement is to ensure that buyers have all the necessary information to make an informed decision about their purchase. Reviewing this document carefully during the seven-day rescission period is crucial. If you find any aspect of the Disclosure Statement unsatisfactory, you have the right to cancel the deal within this period.

Consult with Professionals:

It’s highly recommended to review the Disclosure Statement with your realtor, lawyer, and accountant. These professionals can help you understand the details and implications, ensuring you make a well-informed decision.

By understanding and utilizing the Disclosure Statement, you can protect your interests and make a smart investment in a presale condo.

FREQUENTLY ASKED QUESTIONS ABOUT VANCOUVER PRESALES

Normally, the deposit for a presale condo falls within the range of 5-20% of the purchase price, paid in installments. This deposit serves to secure your purchase and is kept in a trust account until the completion of the project.

 
 
 

Absolutely. Selling a presale contract, also known as an assignment, is an option. However, it's important to note that this process typically requires approval from the developer and may be subject to specific regulations, including taxes and fees.

While presale condos offer promising investment opportunities, it's essential to acknowledge potential risks, including construction delays, fluctuations in market conditions, or discrepancies between the final product and the initial plans.

The Real Estate Development Marketing Act (REDMA) provides essential protections, including a 7-day rescission period, which safeguards deposits and mandates disclosure statement requirements from developers.

In such instances, deposits are safeguarded and must be refunded to buyers. Furthermore, developers are typically mandated to have insurance or other assurances in place to safeguard buyers' investments.

 
 
 
 
 
 

JOIN AMAN'S EXCLUSIVE PRESALE CONDOS VIP LIST!

Be the first to receive updates on new Presales and enjoy VIP access to Openings and Special Promotions.

 

FREE GUIDE TO BUYING YOUR FIRST PRE-CONSTRUCTION​

You may opt out at any time
You may opt out at any time