Full disclosure is critical component in pre-sales agreements

The Supreme Court of British Columbia allowed one buyer to abandon his pre-sale contract because of an incomplete disclosure statement by the developer. The BC Supreme Court Judge Lynn Smith in her judgment ruled that buyers had the right to rescind their agreement to buy a $3.5-million condominium. The buyers sued the developer when they discovered they hadn’t been informed of significant changes in plans for the unit and the building.

This is one case where buyers took developers to court and won their 10% deposit back from the developers. There are many other cases of similar nature going before the courts where buyers are trying to break pre-sale agreements mainly because the real estate prices are down and buyers are looking for ways to walk away from their obligations. This ruling clarifies the disclosure requirements by the sellers, it will be interesting to see what happens in other cases.

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