A recent B.C. Supreme Court decision, KingSett Mortgage Corporation v. Lumina Eclipse Limited Partnership, 2026 BCSC 1598, sends an important warning to developers marketing presale units under BC’s Real Estate Development Marketing Act (REDMA).

The Court found that a developer’s failure to disclose updates about potential delays and financing difficulties during construction rendered 39 presale agreements unenforceable against the purchasers, even though the project was ultimately completed through creditor protection proceedings. The key takeaway: REDMA disclosure obligations don’t necessarily end when the purchaser signs the contract, and the developer’s failure to strictly comply with REDMA can give buyers the right to back out of their pre-sale purchase contracts.

Developers should be particularly alert to:

1. Significant construction delays or stoppages
2. Material financing difficulties
3. Suspension or loss of warranty coverage
4. Building permit issues
5. Other developments that could reasonably affect a purchaser’s decision to complete the purchase

The Court also held that later project completion or creditor protection proceedings do not necessarily cure an earlier REDMA disclosure breach.

For developers, lenders and insolvency professionals, this decision reinforces the importance of having a documented, ongoing REDMA compliance process throughout construction, and being aware of the risk that Buyers could now attempt to use this recent course decision to try backing out of their pre-sale contracts.

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