Can a Developer Change the Price or Size of My BC Presale Unit?

You signed a presale contract based on a floor plan, a size and a price. Now the developer says the unit is smaller, the layout is different or the price has gone up. It is natural to ask whether they are allowed to do that and whether you can walk away.

There is no simple tolerance rule that says a unit can be a certain amount smaller before you can cancel. The answer depends on what your purchase agreement and the disclosure statement say, and on whether a material fact was misrepresented or left out. This article explains the rules that do apply in British Columbia.

This article covers the law of British Columbia.

What controls changes to price, size and layout

The Real Estate Development Marketing Act (REDMA) applies to a developer who markets a development unit in British Columbia. A developer must not market a unit unless it has prepared and filed a disclosure statement, which must plainly disclose all material facts and not contain a misrepresentation.

REDMA does not set a fixed allowance for changes in unit size, layout, price or completion date. Whether the developer may vary those things is decided by your purchase agreement and the disclosure statement, so read both closely for any clause that lets the developer make changes.

A material fact includes a fact that affects, or could reasonably be expected to affect, the value, price or use of a unit. A change in size or layout may well fit that description, depending on the facts.

Amended disclosure statements

If a developer learns that a disclosure statement is non-compliant or contains a misrepresentation, it must promptly file a new statement or an amendment and give copies to affected purchasers.

Filing is not approval. The superintendent has no duty to assess the merits of a disclosure statement or check it for misrepresentations, so filing with BCFSA is not an endorsement.

An amendment alone does not create a new right to cancel if you have already received a disclosure statement. That is why the specific facts matter: what was disclosed, when, and whether the change is material.

When you can cancel

You may rescind by serving written notice on the developer within 7 days after the later of the date of the purchase agreement and the date the developer obtained your written acknowledgment of receiving the disclosure statement. Notice is served by delivering a signed copy in person or by registered mail to the developer or its brokerage at the address in the disclosure statement or purchase agreement.

If you rescind, the developer must immediately inform the person holding the deposit, and the holder must promptly return the deposit to you. If you rescind after title has transferred, the developer may apply to court for an order that you pay market rent for occupying the unit.

Other remedies if something was misrepresented

A developer who has breached any provision of Part 2 of REDMA cannot enforce the purchase agreement against you. The agreement stays enforceable if the breach involved no misrepresentation of a material fact reasonably relevant to you, or if the developer did not know of the misrepresentation and corrected it by an amendment filed within 30 days of becoming aware and no later than 14 days before the date title is to transfer, and provided to you.

You are deemed to have relied on a misrepresentation in the disclosure statement and may sue the developer, its directors and other listed persons for damages. The action may not start more than 2 years after the misrepresentation first came to your knowledge. It is a defence if the defendant proves you knew of the misrepresentation when you received the disclosure statement.

• Refusing to close without legal advice can put your deposit at risk, so check your position first.
• A developer may release a deposit on your default if it elects to cancel and the deposit is forfeited under the agreement.

What to do next

• Note the date you signed and the date you acknowledged receiving the disclosure statement.
• Collect your purchase agreement, every disclosure statement and amendment, and all emails about the change.
• Compare the original disclosure statement with the amendment to see what changed.
• Check whether any deadline, including the 7-day window, is still open.
• Do not sign a release or new agreement until you understand it.
• Get legal advice quickly, since some rights are time limited.

If you have a concern about an inadequate disclosure statement or a mishandled deposit, you can complain to BCFSA, which can take regulatory action against developers. BCFSA does not enforce your contract rights, which fall under contract law.

Frequently asked questions