BCFSA Announces Early Marketing Pilot Program and New Consumer Disclosure Requirements for Developers

Articles

By Jimmy Zhang and Sarah Jones

In a rapidly changing real estate landscape, staying ahead of regulatory changes is essential for real estate developers. To tackle rising construction costs and enhance consumer protection for pre-sale purchasers, BC Financial Services Authority (“BCFSA”) has introduced a pilot program for developers that extends the early marketing window, and a new consumer disclosure form to accompany disclosure statements.

Pilot Program: 18-Month Early Marketing Period for Large Developments

Effective February 25, 2025, BCFSA is launching a pilot program allowing large residential developments with 100 or more units to extend the early marketing period under the Real Estate Development Marketing Act (“REDMA”) from 12 months to 18 months.

Key details for the pilot program are outlined below:

  1. Eligibility: The program is available to development projects with 100 or more development units. Projects that have already commenced marketing are eligible to participate.
  2. Opt-In Fee: Developers interested in the program are required to submit an exemption application to BCFSA along with a $13,500 fee, in addition to the $13,500 fee for filing a disclosure statement.
  3. Reporting: Developers participating in the program are required to submit a significant amount of information about their development project to BCFSA on a quarterly basis. The data will be used to evaluate the impact of longer early marketing periods on consumer rights and development viability, and BCFSA has advised this information will be kept confidential.

BCFSA has provided a list of FAQs.

New Consumer Disclosure Form for Pre-sale Purchasers

BCFSA has developed a “Summary of Pre-sale Risks and Buyer Rights” form (the “Summary Form”). BCFSA advises that the Summary Form will assist purchasers in understanding their rights and obligations under REDMA, and in particular, aims to:

  1. Highlight critical provisions of the disclosure statement and purchase agreement;
  2. Direct purchasers to relevant sections of the disclosure statement for review; and
  3. Encourage purchasers to seek professional advice and to read the entire disclosure statement.

Effective April 1, 2025, developers will be required to attach a copy of the Summary Form to the front of the disclosure statement. In addition, developers will need to ensure that purchasers initial the Summary Form to confirm they are aware of their key rights. If the Summary Form is missing or incomplete, the developer will be required to file an amendment with the completed form attached and pay the required amendment fee.

For a disclosure statement filed prior to April 1, 2025, BCFSA advises that a developer is not required:

  • to file a disclosure statement amendment to comply with this new requirement; and
  • to attach a copy of the Summary Form to a previously filed disclosure statement, nor to any future amendments to a previously filed disclosure statement.