Effective May 29, 2014, some significant changes were made to REDMA.
Electronic Delivery of Disclosure Statements
Section 15 was amended to permit a developer to provide disclosure statements, amendments to disclosure statement, phase disclosure statements and consolidated disclosure statements to purchasers by electronic means, but only with the written consent of the purchaser.
Consolidated Disclosure Statements Now Permitted
New Section 15.2 allows developers to prepare and file a consolidated disclosure statement when the content of the disclosure statement has been modified by an amendment to disclosure statement. The consolidated disclosure statement must contain the content of the first disclosure statement (or phase disclosure statement if applicable) filed by the developer for the development property, as modified by any subsequently filed amendment to the first disclosure statement.
The consolidated disclosure statement can be delivered to new purchasers, instead of the original disclosure statement and subsequent amendments. A new purchaser is defined as a purchaser who has not previously received a disclosure statement, a phase disclosure statement or a consolidated disclosure statement for the development unit in question. Existing purchasers must be provided with the filed amendment to disclosure statement, as was previously the case.
A new purchaser who receives a consolidated disclosure statement can elect, by written notice, to require the developer to provide the purchaser with copies of the original disclosure statement and amendments to disclosure statement filed to the date of such notice (Section 15.2(4)). The developer may not charge for providing such copies and must provide them to the purchaser within 30 days after receipt of the written request.
Phase Disclosure Statements Now Permitted
Under new Section 14(4.1), a developer who markets development units in a successive phase of a phased strata development does not need to file an amendment to disclosure statement to add the new phrase if it files a phase disclosure statement under Section 15.1 before marketing any units in the new phase, and does not market any development units in any previous phase of the development.
New Section 15.1 gives a developer who markets a strata development in phases the option of filing a phase disclosure statement instead of an amendment to disclosure statement, provided that the developer is not marketing any units in previous phases.
A phase disclosure statement can be provided to new purchasers only. The phase disclosure statement must include the usual disclosure information required in a disclosure statement under REDMA, in relation to the development property and the development units in the relevant phase.
A new purchaser who receives a phase disclosure statement can elect, by written notice, to require the developer to provide the purchaser with copies of the original disclosure statement and amendments to disclosure statement filed to the date of such notice (Section 15.1(4)). The developer may not charge for providing such copies and must provide them to the purchaser within 30 days after receipt of the written request.
Limitation of Rescission Rights under Section 21
The right of a purchaser who did not receive a disclosure statement to rescind its purchase agreement under Section 21(3), whether or not title has been transferred, has been limited. It does not apply if the disclosure statement that the purchaser is entitled to receive, but does not receive, is an amendment to a disclosure statement (missing amendments are now dealt with under new Section 21(3.2), see below), or an original disclosure statement and/or amendments that a purchaser who has received a consolidated or phase disclosure statement has requested under new Sections 15.1(4) or 15.2(4) (see below).
New Section 21(3.2) grants a purchaser a right to rescind, wither or not title has been transferred, if it does not receive an amendment to disclosure statement that it was entitled to receive, but only if (a) the purchaser has not become entitled to receive the amendment as a result of a request by the purchaser under new Sections 15.1(4) or 15.2(4), and (b) the amendment relates to or would have related to a fact or proposal to do something that is a material fact on the earlier of the date the notice of rescission is served on the developer and the date that the purchase agreement requires the developer to transfer title to the development unit to the purchaser, and (c) the amendment relates to or would have related to a fact or proposal to do something that was or would have been reasonably relevant to the purchaser in deciding to enter into the purchase agreement, and (d) no more than one year has elapsed since the purchaser completed its purchase of the development unit.
Occupation Rent under Section 21
New Section 21(7) specifically gives the Court the power to order a purchaser who rescinds its purchase agreement to pay market rent when the purchaser occupies a unit and then rescinds.
Limitation of Non-enforceability Remedy under Section 23
New Section 23 still provides that a purchase agreement in relation to a development unit is not enforceable against the purchaser by a developer who has breached any provision of Part 2 of the Act. However, new subsection 23(2) provides that a purchase agreement is enforceable against the purchaser if either of the following applies to the developer’s breach:
- the breach involves a disclosure statement that does not comply with the Act or the regulations, but there is no misrepresentation in the disclosure statement concerning a material fact that was or would have been reasonably relevant to the purchaser in deciding to enter into the purchase agreement; or
- the breach involves a disclosure statement that includes a misrepresentation concerning a material fact, but the developer was not aware of the misrepresentation at the time the purchaser and the developer entered into the purchase agreement and the misrepresentation is corrected in an amendment to the disclosure statement filed no later than 30 days after the developer becomes aware of the misrepresentation and at least 14 days before the closing date under the purchase agreement.
Authority to Create Exclusions from the Definition of “Developer” by Regulation
Section 46 has been amended to give specific regulatory authority to create exclusions from the definition of “developer”. Parties that are excluded from the definition of “developer” will not be required to comply with those sections of the Act that are otherwise applicable to developers.
Amendment to Section 18 Allows Release of Deposit to Developer if Purchaser Fails to Pay Subsequent Deposit OR Balance of Purchase Price When Required
Originally, Section 18(4) provided that a trustee holding deposit monies must release the deposit to the developer if the developer certifies, among other things, that the purchaser has “failed to pay a subsequent deposit” when required under the purchase agreement and that the purchase agreement allows the developer to cancel the purchase agreement and forfeit the deposit if the purchaser “fails to pay a subsequent deposit” when required. It was not clear whether failing to pay a “subsequent deposit” would apply to a failure to pay the balance of the purchase price on the closing date.
The amendments to Section 18(4) specifically clarify that the release of deposit procedure set out therein applies, subject to the appropriate certificate from the developer, when the purchaser has failed to pay a subsequent deposit or the balance of the purchase price when required and the purchase agreement allows the developer to cancel the purchase agreement and forfeit the deposit if the purchaser fails to pay a subsequent deposit or the balance of the purchase price when required.