If you’ve been in Vancouver for a few years you may remember the last time the market took a dip was in 2008.
As prices fell we started to see more and more stories about buyers trying to get out of presales contracts and developers going after buyers for the difference between their deposit and the current market value of the condo.
Well looks like we’re starting to see legal wrangling over presales contracts again, the most recent one is buyers trying to get out of their purchase agreements at the Hotel Georgia.
Falling Vancouver real-estate prices and widespread expectations that they’ll fall further have sparked a rise in lawsuits from condo buyers who want to get out of their presale contracts.
The trend underscores the importance for developers to scrupulously follow the Real Estate Development Marketing Act (REDMA) – because failure to do so can render sales contracts unenforceable and enable buyers to get their deposits back.
“People wouldn’t be looking for the return of their deposits if the units were worth more than or as much as they purchased them for,” Harper Grey LLP partner Bryan Baynham told Business in Vancouver.
The most recent string of lawsuits involves Georgia Properties Partnership’s (GPP) Residences at Hotel Georgia project, which is set to be complete in December – one year later than the developer promised buyers.
Baynham had filed six lawsuits from buyers of units at the Residences at Hotel Georgia as of October 24. He expects to file more.
The project has 156 units. As of September, 96 were sold.
If prices continue to fall in Vancouver you can bet we’ll see more legal action over presales contracts, both from buyers and developers.