Effective January 1st, 2019 there will be new changes to REDMA (Real Estate and Development Marketing Act). The changes pertain to the assignment of contracts for developments like Ella, One Water, Brooklyn, and other strata condos in town.
With these new changes, if a purchaser wants to assign their contract before they complete their purchase they need to obtain the developer’s consent; the developer can only consent if it is able to collect a significant amount of information on the person or party that the contract is being assigned to. This information needs to be retained by the developer and then submitted to a government registry where it may be shared with the CRA. The provincial government cites the reason for implementing these new rules is to track ‘condo flipping’ and tax people on profits they make from a ‘flip’.
So what does this mean if you are a developer? You have additional disclosure requirements, additional information to put into your purchase contracts, and additional requirements for collecting, reporting, and storing information.
If you are a purchaser and you wish to assign your contract, or if you are a realtor working with assignment contracts, you will also have more steps to take to gather information and pass that information along to the developer.
For contracts that have been/will be entered into before January 1st, 2019 but may be assigned after January 1st, 2019 the developer will need to make reasonable efforts to collect the required information, and they must collect a copy of the assignment.
Whether you are a developer, a purchaser, or a realtor, the real estate and development team at Doak Shirreff Lawyers can assist you with navigating the new requirements of REDMA. If you have any questions about the assignment of contracts contact Alison Mcleod.