Members with clients looking to buy a pre-sale should be aware that developers can now market a residential development project even when the developer hasn’t obtained a building permit.

The developer, however, must have approval in principle from the municipality or local government authority to build the project.

This change, effective March 8, 2023, is the result of the BC Financial Services Authority (BCFSA) amending the Superintendent of Real Estate’s Policy Statements 5, 6 and 13 related to the marketing of development properties and real estate securities under the Real Estate Development Marketing Act (REDMA).

The amendments provide ungraded standards for early marketing requirements and enable developers to obtain financing at an earlier date where financing is contingent on a minimum number of pre-sales. 

Include:

• amending the concept of “approval in principle” so that approval in principle is obtained when a municipal or other government authority has given third reading to a bylaw to zone or rezone the specific site on which the developer’s proposed development will be located, or, in areas that do not require third reading, has taken an equivalent step to proceed with such zoning;

• amending the definition of “building permit” to include multiple or staged building permits issued by an approving authority, where required, that authorizes excavation or construction of the development property;
• clarifying the definition of a “satisfactory financing commitment”; and
• clarifying that early marketing requirements apply on a phase-by-phase basis.

Read Policy Statement 5

Read Policy Statement 6

If a developer begins marketing under Policy Statement 5 as of third reading (compared to waiting for final rezoning), the developer has 12 months from the date it begins marketing to obtain a building permit and file an amendment to its disclosure statement disclosing the particulars of the building permit.

Now:

• sets out disclosure requirements for real estate securities offerings under REDMA;
• replaces the real estate securities disclosure content previously contained in the BC Securities Commission’s (BCSC) Form 45-906F, which was repealed as of March 8, 2023; and
• remove references to BCSC Form 45-906F.

Read Policy Statement 13 

From September 20, 2022, to October 20, 2022, BCFSA held two concurrent 30-day consultations about amendments to Policy Statements 5, 6 and 13. They invited more than 800 stakeholders and interested parties to review the discussion papers and proposed amendments and comment through online consultation feedback forms.

See the Consultation Page

Read Policy Statement 5 and 6 Consultation Summary Report (Opens 6-page pdf)

Read Policy Statement 13 Consultation Summary Report (Opens 5-page pdf)

Read the BCFSA News Release