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Hear Hot Property with Ozzie Jurock every Saturday morning between 8:30-10 am on CKNW AM980
Tip of the Week:
9/29/07
The Financial Commission Issues Warning On Presales
The Financial Institutions Commission of B.C. (www.fic.gov.bc.ca) has published a bulletin
risks associated with buying a pre-sale condo unit.
The FIC's major points:
- A proposed development may be delayed, or may not proceed at all
- If a development is delayed beyond the completion date set out in the pre-sale contract, the contract may be terminated unless both the purchaser and developer have agreed to an extension.
WE CAN USE ONLY THESE TWO OR ONE OTHER ... AND POINT OUT ... YOU REALLY HAVE NOTHING!!! UNLESS YOU HAVE A REPUTABLE DEVELOPER!
- Delays in development may require prospective purchasers to arrange temporary accommodation or delay moving from their existing homes.
- If market prices have increased during a delay, a purchaser may be asked to pay a higher price in order to extend the contract or obtain a new contract. There is also the risk that the developer may refuse to extend the contract, and instead sell the unit to a new purchaser.
- Depending on the specific terms of the pre-sale contract, assignments may not be permissible, if the pre-sale buyer wants out, or may require substantial fees paid to the developer. Also the assignment purchaser may not recover any payments made to the initial purchaser and developer, depending on the specific terms of the assignment.
- A pre-sale contract may allow the developer to substitute equivalent materials or make adjustments to the layout of the unit or the development.
- Purchasers at several developments have had their pre-sale contracts terminated and this has led to complaints about some of the risk.
Major Point: Excellent points. In other words, you may wait your 2 years and get nothing! That's why ... reputable builders only. Proven track record. Have your lawyer read the contract. Caveat emptor!
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