What Is a Pre-Construction Purchase Agreement in Alberta?

A pre-construction purchase agreement is a contract to buy a home before it is finished, sometimes before construction has even started. You are relying on drawings, a specification list and the builder's promises about what will be delivered and when.

That makes the contract itself your main protection. This article walks through the clauses that matter most, the statutory protections for new condominium buyers, and the checks to make before you commit.

This article covers the law of Alberta.

What the agreement does

In plain terms, you agree to buy and the builder or developer agrees to build and transfer the home on stated terms. Because the home does not exist yet, the contract has to describe it: the lot or unit, the design, the finishes, the price, the payment schedule and the timeline.

Builders often use their own standard form. Standard forms usually favour the builder, so it is reasonable to read every page and ask questions before signing.

Key clauses to understand

For late possession of a freehold home and for price escalation, the contract and general contract law do most of the work, so those clauses deserve a careful read and legal advice.

Extra protections if you are buying a new condominium

Under the Condominium Property Act, a developer must not sell or agree to sell a unit or proposed unit unless the required disclosure documents have been delivered to you. The purchase agreement must include a notice of your right to rescind within 10 days.

• You may rescind by written notice within 10 days of the later of receiving the required documents or signing the agreement.
• The developer must return all money paid within 15 days of receiving your notice.
• The developer or a prescribed trustee must deposit your money into a trust account within 3 days of receipt, excluding holidays and Saturdays.
• A developer must give written notice of material changes to the disclosed information before you take possession.
• Any waiver of your rights under the Act is void.

A developer that fails to deliver the required disclosure documents, include the rescission notice in the agreement, or return your money after you rescind commits an offence. Even so, the 10-day window is short, so do not wait to review your documents.

Warranty and builder checks before you commit

The New Home Buyer Protection Act requires builders to provide home warranty coverage on all new residential homes, including condominiums. It applies where the building permit was applied for on or after February 1, 2014. The minimum periods are 1 year for labour and materials, 2 years for delivery and distribution systems, 5 years for the building envelope and 10 years for major structural components.

Coverage starts at the earliest of occupancy, permission to occupy or transfer of title to the owner. For condominiums, units and common property have separate policies and the start dates may differ. Coverage attaches to the home and stays in effect on resale until it expires.

You can look up the builder in the Builder Registry, which shows licence status, enforcement actions and homes built since February 1, 2014. The Property Registry shows the warranty provider, the builder and whether coverage has started.

What to do before you sign

• Get the full agreement, schedules and specification list, not just a summary.
• Confirm the builder or developer appears in the Builder Registry.
• Ask which warranty provider covers the home and what limits apply.
• Mark the completion, deposit and cancellation dates on a calendar.
• Keep every brochure, email and rendering the salesperson gave you.
• Have a lawyer review the agreement before you sign, and certainly before the 10-day condominium window closes.

Frequently asked questions