On Tuesday, the BC Financial Services Authority (BCFSA) announced a minor change to the Real Estate Development Marketing Act (REDMA) that will likely have a significant impact for developers.
Under REDMA, developers are granted an "early marketing period" of 12 months. The clock starts ticking as soon as developers file their disclosure statement to the BCFSA outlining their project offering, and developers are then required to obtain the building permit for the project within the 12 months, which typically means they have to hit the presale target required by their lender for construction financing. Presale targets can vary depending on a variety of factors, but are usually between 60% to 80%.
The regulation setting a firm deadline was introduced as a consumer protection mechanism, ensuring buyers will be able to receive their homes in a reasonable timeframe. If developers fail to get their building permit in the 12 months, they are required to give presale purchasers the option of backing out of the sales agreement, before then deciding whether they want to try again.
However, the density of projects has been growing in recent years, which means unit counts are getting bigger, and the existing REDMA regulations apply regardless of whether the developer has to sell 100 units or 300 units.
According to a Fall 2024 report published by real estate marketing firm rennie, presale projects have grown from an average of 10 storeys and 116 units in 2010 to 16 storeys and 169 units as of 2023 — a 45.7% increase in terms of unit count. Additionally, the amount of projects with over 200 units has also more than doubled, increasing from about 14% of all presale projects in 2010 to 35% in 2023.
Average presale project statistics in 2010 compared to 2023. / rennie
"Each new project today requires financial commitments from home buyers that are 212% greater than they were just over a decade ago, along with more complex financing that requires additional time to obtain," said rennie. "Simply put, REDMA's 12-month early marketing period no longer suits the size of projects today."
"When projects were 150 units, that wasn't a big deal, but we're seeing projects throughout Metro Vancouver now that are 350 units," said Wesgroup Properties Chief Development Officer Brad Jones in a previous interview with STOREYS. "There's projects in Surrey that are single phase, one tower, 720 to 750 units, and so the prospect of being able to presell 500 homes in that period of time is really challenging, and we believe is actually holding housing back from the market."
As a result, developers have to keep a very close eye on the market to gauge whether they should launch and let the 12-month clock start ticking. If they aren't confident in the market, then they delay their launches, which many developers have done over the past few years as economic conditions have depressed market sentiment.
In a previous interview in November, Garde MacDonald, Director of Advisory for real estate marketing firm MLA Canada, told STOREYS that no equivalent regulation exists in Alberta, Saskatchewan, Manitoba, Ontario, and Quebec, making British Columbia an outlier.
The Pilot Program
Under the new pilot program announced on February 25, eligible developers of projects with 100 or more units will have an early marketing period of 18 months rather than just 12 months. The regulation was previously nine months, before being permanently extended to 12 months beginning May 2021.
The change is effective immediately and projects that have already commenced marketing will be able to benefit from the change, so long as the project and developer meet eligibility requirements, although in-stream projects are required to go through a different process. (The BCFSA has published a full FAQ here.)
For projects, the only requirement is that there are 100 or more units. For developers, the BCFSA is requiring quarterly sales reports to be submitted, which the BCFSA says "will be used to evaluate the impact of the early marketing period on real estate development in BC and inform future BCFSA policy decisions, balancing the need to support the industry while maintaining robust consumer protections."
"Rising construction costs and economic uncertainty have resulted in a challenging environment for developers of large projects," said BCFSA SVP of Compliance and Enforcement Jon Vandall. "This pilot program will provide developers with more time to secure financing and building permits for large, often complex, developments, so consumers can have confidence that their pre-sale units will be completed."
Although the change is being called a "pilot program," there is currently no end date for the program, with the BCFSA saying the program will be monitored on an ongoing basis.
According to the BCFSA, which absorbed what was formerly the Real Estate Council of BC (REBC) and the Office of the Superintendent of Real Estate (OSRE) in 2021, they conducted consultations with the development industry through the Urban Development Institute prior to making this change.
Entering the year, the change to REDMA has been on the minds of many developers, so much so that STOREYS labeled it one of the biggest industry storylines to monitor in 2025. In an interview with STOREYS last month, Minister of Housing and Municipal Affairs Ravi Kahlon also indicated the Province was open to the change.
For presale purchasers, the BCFSA said that it is important for buyers to identify whether the project they are buying into is participating in the pilot program, as their deposit would be tied up for an additional six months. Whether the project's early marketing period is 12 months or 18 months will be indicated on the disclosure statement given to buyers.
In conjunction with the pilot program, the BCFSA simultaneously announced a change, coming into effect on April 1, 2025, that will require developers to provide buyers with a new form that explicitly highlights important information within the disclosure statement and purchase agreement, so key information is not buried. Furthermore, the BCFSA has also published a new consumer guide for presale purchasers, although they are still recommending buyers seek out professional advice when buying.
