On May 29, 2014, a number of important amendments to the Real Estate Development Marketing Act (REDMA) became effective. Scott Smythe and Jennifer Hayes have both commented on these amendments in previous blog posts (see http://www.canadianrealpropertylawblog.com/2014/03/redma-revisited/ and http://www.canadianrealpropertylawblog.com/2014/08/redma-an-update/). The purpose of this post is to advise of a very recent, related development, being the publication by the Superintendent of Real Estate for British Columbia of several amended Policy Statements that complement the recent REDMA amendments. The amended Policy Statements will become effective on October 1, 2014, and can be found at: http://www.fic.gov.bc.ca/index.aspx?p=real_estate/bulletins
By way of background, the Superintendent’s office has the power to issue Policy Statements setting out rules that must be followed by developers when marketing certain types of real estate developments (notably strata developments). The Superintendent previously published 15 Policy Statements which explain various REDMA requirements and set out the Superintendent’s views on how they may be satisfied. Policy Statements 1, 2, 3, 8, 9, 10 and 11 are critically important, as they describe in detail what must be included in a disclosure statement for different types of development properties in order for the Superintendent to consider the disclosure statement compliant with REDMA. Policy Statements 5 and 6 are also important, as they describe the basis on which a developer may “pre-sell” development units prior to receipt of a building permit and financing commitment.
Under amended Policy Statements 1, 2, 3, 8, 9, 10 and 11, developers must include in their disclosure statements more detailed information about zoning and construction commencement and completion dates. Consistent with the recent REDMA amendments, phase disclosure statements and consolidated disclosure statements are also now expressly permitted. Amended Policy Statement 5 now addresses how a developer may market development units with multiple or staged building permits.
Any developer who files a disclosure statement after October 1, 2014 will be required to comply with the amended Policy Statements. For a developer who filed a disclosure statement prior to October 1, 2014, the Superintendent will not require the developer to amend a disclosure statement solely to address the new requirements in the amended Policy Statements (provided the disclosure statement complies with the Policy Statements in effect prior to October 1, 2014 and does not otherwise contain a misrepresentation). However, if the developer becomes obligated to file an amendment to disclosure statement at any time after October 1, 2014, the developer must ensure that, as part of that amendment, the disclosure statement is updated to reflect the new requirements set out in the amended Policy Statements.