Pre-sale condo contracts are commonplace in the hot real estate
market of Metro Vancouver. In the majority of cases, the condo
development is completed without issue and the purchasers often
reap the rewards of rising values. However, a recent application
heard in the Supreme Court of British Columbia highlights some of
the inherent risks associated with entering into pre-sale
contracts.
In Forjay Management Ltd. v. 0981478 B.C.
Ltd., 2018 BCSC 527, Madam Justice Fitzpatrick had to
consider what to do with a number of pre-sale contracts after a
Langley condo project, known as Murrayville House, went into
receivership.
From March 2015 to May 2016, the developer of the condo project
sold a number of units from its sales centre. It was anticipated
the project would be completed sometime between January and April
2016. The pre-sale contracts had a clause which stipulated that if
the project was not completed by July 31, 2016, the contracts would
be terminated;
