Understanding Buyer Rights, Obligations, Key Clauses
The Presale Purchase Agreement is the legal contract between you and the developer that sets out the terms of your new home purchase. It defines what you’re buying, how and when payments are made, and under what conditions the property will be delivered. Because this document governs every aspect of your purchase, it’s important to review it carefully with a lawyer during your seven-day rescission period.
The Subject Property
This section identifies the exact home you’re purchasing. It includes the unit and strata lot numbers, and references the floorplan and strata plan so there’s no ambiguity about the property being bought.
Purchase Price & Deposit Schedule
Your agreement lists the total purchase price and outlines when deposits are due. It also specifies how taxes, such as GST, will be handled. Deposits are usually paid in stages and must be held in a trust account by a lawyer, notary, or licensed brokerage until completion.
The Disclosure Statement
Every presale buyer in British Columbia must receive a Disclosure Statement from the developer before the agreement becomes binding. This document contains essential information about the project, such as the site plan, building design, strata budget, and any factors that could affect the property’s value or intended use. You should read it carefully before finalizing your purchase.
Construction & Completion Dates
The contract will include an estimated completion date and may also allow the developer to extend this date in case of construction delays. Pay close attention to the outside completion date, the latest date the developer can deliver the home before you have the right to cancel and receive your deposit back.
Deficiencies & Warranties
Before you take possession, you’ll have an opportunity to inspect your home and note any deficiencies for correction. All new homes in B.C. are protected by the 2-5-10 Home Warranty Program, which provides two years of coverage for materials and labour, five years for the building envelope, and ten years for structural defects.
Assignment Clause
Some agreements allow you to assign (sell) your contract to another buyer before the building is complete. If assignment is permitted, the agreement will outline the developer’s approval process, applicable fees, and timelines. Not all projects allow assignments, so this is an important point to clarify before committing.
Buyer Responsibilities
As the buyer, you’re responsible for paying deposits as scheduled and arranging financing in time for completion. If you fail to complete the purchase, you could forfeit your deposit and be liable for additional costs. Working closely with your Realtor® and lawyer helps ensure you stay informed and on track.
