When you are looking to buy a home from a developer, they are obligated to provide you with a disclosure statement, which can be long, complex, and tough to understand. Here’s what you need to know.
What is a Property Disclosure Statement?
A property disclosure statement is a statement issued from a seller to a buyer which explicitly outlines information about the property being sold. This must include all important information about the property and must be accurately portrayed. Failure to disclose information about the property can leave the seller vulnerable to legal action from the buyer.
Developer & New Construction Disclosure Statements
When it comes to buying property from a developer, BC law states that purchasers of a new development property are granted a 7-day grace period after making the purchase, during which time the purchaser may cancel their purchase agreement and have their deposit refunded with no penalty. The purchaser must have been provided with the developer’s property disclosure statement so that they can carefully review it over this 7-day period.
In British Columbia, all new developments which are comprised of five or more units are subject to the Real Estate Development and Marketing Act which governs how a developer can market and sell or lease these development properties. The Act is consumer protection legislation which facilitates disclosure about the development by requiring the Developer to provide a Disclosure Statement to the Buyer which discloses the following:
- The Background and Experience of the Developer
- The Purchaser’s Rights of Rescission
- Permitted Uses of the Development
- Phasing of the Development
- Strata Information and Budgets
- Parking Entitlements
- Utilities and Services
- Description of the Land Title
- Construction and Warranties
- Local Government Approvals and Finances
- Handling of Purchaser’s Deposits
When reviewing a developer’s property disclosure statement, it is important to ask yourself whether you have any valid concerns about the developer not completing the project and whether a delay in the project would be detrimental to your personal plans or not.
Why Hire a Real Estate Lawyer?
A disclosure agreement can be hundreds of pages long and the developer may file amendments as the construction goes on. Because of the length and complexity of some developer agreements, it is in your best interest to have an experienced real estate lawyer look it over and help you determine whether the agreement is sufficient or not.
At Hoogbruin & Company, we deal with all types of real estate law and are very well versed in what a proper disclosure statement from a developer should look like. We are committed to ensuring our clients’ wellbeing and financial safety when making a major decision like the purchase of property.