Changes to REDMA: Developer Obligations for Assignments of Purchase Agreements come into Force
The Province of British Columbia has approved the amendments to the Real Estate Development Marketing Act (“REDMA”) and the Real Estate Development Marketing Regulation in order to facilitate the disclosure of information to provincial and federal authorities under the Condo and Strata Assignment Integrity Register or “CSAIR”. The changes in REDMA and the accompanying Regulation impose significant reporting requirements on developers who permit the assignment of Purchase Agreements of building strata lots. The term “assignment” has been given a broad definition in the Act to mean any change to a purchaser. This will likely include a wife adding a husband to the purchase, or an individual having his company complete the purchase.
The changes take effect on January 1, 2019 and developers need to take the steps as set out below.
Developers must amend their Purchase Agreements to say that no assignments are permitted, or that all assignments must be consented to by the Developer and each assignor and assignee must give personal information as prescribed in the regulations.
Developers will be required to collect, record and report, on a quarterly basis, prescribed information of each assignor and assignee, and the details of all assignments of Purchase Agreements to an administrator designated under the Property Transfer Tax Act. To be able to report the information, developers must establish an account with the Land Title and Survey Authority of British Columbia by March 30, 2019, the end of the first reporting period required under CSAIR.
All assignment agreements must include particulars of the assignment, including, but not limited to, the date of purchase agreement, the date of the developer’s consent to the assignment, the effective date of the assignment, any assignment fee paid to the developer and any amount paid to the assignor for the assignment. Prior to consenting to an assignment, developers must have collected the legal name, date of birth, Social Insurance Number, address and other details of all assignors and assignees of a contract of purchase and sale. The developer must retain the assignment agreement for 6 years.
Unless a Developer has transferred all units in a project, each Disclosure Statement must be amended to set out the changes to the Purchase Agreement and the terms of assignment.
For your information, below are links to the relevant legislative changes.