Effective January 1, 2019, developers in British Columbia will be subject to new information collection, reporting and document retention requirements in connection with assignments of purchase agreements in qualifying developments. The new requirements will apply to any five (5) or more strata lots in a stratified building in British Columbia that are marketed for sale or for lease with a term longer than three (3) years (each, a "Strata Development").
These changes became law by the passing of Bill 25 - Real Estate Development Marketing Amendment Act (2018) and regulations amending the Real Estate Development Marketing Act (British Columbia) ("REDMA") and the Real Estate Development Marketing Regulation (the "Regulations"), and the issuance of REDMA Policy Statement 16.
In addition to being subject to new information collection, reporting and document retention requirements, effective January 1, 2019, all developers must pay increased fees when filling an application for an exemption or a disclosure statement, and amendment to disclosure statement.
I. INFORMATION COLLECTION, REPORTING AND DOCUMENT RETENTION REQUIREMENTS
A. Required Disclosure Amendments and Timeline for Compliance
A developer that intends to file a Disclosure Statement on or after January 1, 2019 must ensure that its disclosure statement and form of purchase agreement include the notices and contractual terms relating to pre-sale assignments which are mandated under Policy Statement 16 and the Regulations.
Any disclosure statements for Strata Developments which were filed before January 1, 2019 and "marketable" on or after January 1, 2019 must be "promptly amended as of January 1, 2019" to include the required disclosure. The form of purchase agreement used by a developer as of January 1, 2019 must include the mandated notices and contractual terms relating to pre-sale assignments.
B. Information Collection and Reporting Requirements
A developer must not consent to any assignment of a purchase agreement entered into on or after January 1, 2019 unless the developer collects and reports prescribed information in respect of the parties to the assignment, the purchase agreement terms, and the assignment terms.
A developer must not consent to an assignment of a purchase agreement entered into before January 1, 2019 before first using "reasonable efforts" to collect the prescribed information.
All developers must keep a copy of the assignment agreement for a prescribed amount of time.
C. Reporting on the Collected Information
A developer must report by filing the prescribed information to the Condo and Strata Assignment Integrity Register ("CSAIR") within 30 days after the calendar quarter in which the first purchase agreement date falls and within 30 days of every successive quarter until the calendar quarter after the one in which the strata plan is deposited. A developer must then report within 30 days of the end of the calendar year in which the strata plan is deposited, and on an annual basis until the earlier of: (i) the date the developer ceases the development of the development property, (ii) the date that the developer disposes of the development property, (iii) the date the developer transfers title to all strata lots in the development property, or (iv) the date that is the last date of the sixth (6th) consecutive annual reporting period.
CSAIR will be administered by the Property Transfer Tax branch and the Land Title and Survey Authority ("LTSA").
Developers are expected to obtain a LTSA account by the end of March 2019 for the purposes of filing the prescribed information.
II. INCREASE IN FILING FEES
Effective January 1, 2019, the fees for filing an application for exemption, or filing a disclosure statement will be increased by 300%.
The new fees for filing an application for an exemption or a disclosure statement will be as follows:
- 9 or fewer units: $900
- 10 to 49 units: $1,800
- 50 to 99 units: $3,600
- 100 or more units: $5,400
The fee for filing an amendment to disclosure statement will be $600.00 as of January 1, 2019.
The amendments to REDMA and its Regulations impose significant additional regulatory requirements. On that basis, we strongly suggest that developers seek prompt legal advice to ensure their disclosure documentation and marketing processes are compliant. Members of the Real Estate Group at Lawson Lundell LLP have prepared a bulletin for our clients providing a more in-depth analysis of the amendments and the steps required for compliance.
Chad works in the Real Estate Group at Lawson Lundell and assists clients with all aspects of real estate development, commercial leasing and municipal planning. In particular, Chad has experience: acting for developers in ...
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