Real Estate Terms Canada for Presale Condos

Glossary of Real Estate Terms for Presale Condos in Canada

Below you will find a comprehensive list of real estate terms for presale condos in British Columbia, Canada. We specialise in helping buyers of presale condos in British Columbia and have gathered these real estate terms from our experience.

A-Kit

In the context of BC presale condo real estate terms, an A-Kit is a package of documents that provides comprehensive information about a development. It often includes floor plans, price lists, and other details that help buyers make informed decisions. See preview package.

Accepted Offer

An accepted offer refers to a situation where the seller (the developer in the presale condo context) has agreed to the buyer’s offer, creating a legally binding contract. In terms of presales in BC, the buyer does have 7 days during which they can kill the deal – See 7 day rescission period below.

Amendment to the Disclosure Statement

An amendment to the disclosure statement is an updated version of the document that details any significant changes made after the original was issued.

This may include changes in construction plans, financing terms, etc.

Typically, both the developer and the presale condo buyer will have to sign this.

These amendments to the disclosure statement are part of developers requirements under REDMA (see below)

Appreciation

Appreciation refers to the increase in value of a property over time due to various factors such as improvements made, real estate market trends, or demand and supply dynamics.

Assignee

An assignee is the party that receives the rights and obligations of a contract from the original holder, the assignor, through an assignment of contract. In regards to real estate terms for presale condos, the assignee is the person or entity that is purchasing the presale condo assignment contract.

Assignment of Contract

Assignment of contract refers to the process of transferring the rights and responsibilities of an original agreement from one party (the assignor) to another party (the assignee). Presale condo assignments allow the initial buyer of a presale condo to sell their presale condo to a subsequent buyer with developer permission in writing.

Assignor

An assignor is the original party in a contract who transfers their contractual rights and obligations to a third party, known as the assignee. In regards to real estate terms for presale condos, the assignor is the person or entity that is selling the presale condo assignment contract. This is the person or entity that originally bought the presale from the developer.

BCREA

The British Columbia Real Estate Association (BCREA) is a professional association that represents the province’s 11 real estate boards and their approximately 23,000 REALTORS®.

Boardroom Sales Program

This is a presale sales program when a marketing team uses a boardroom typically in a real estate brokerages office to sell a new home project. Typically, a boardroom program will have a computer to show floor plans, renderings, and pricing. Often they will have samples of flooring, countertops, and other interior finishings.

Builder

The builder is the company or individual responsible for the physical construction of a property. Also known as construction companies. Builders work closely with developers to bring their projects to fruition. Sometimes the developer is the builder, but in many cases a developer hires a separate building company to construct the building.

Building Envelope

A building envelope is the physical separator between the conditioned interior and the unconditioned environment of a building. It serves as the outer shell to protect the indoor environment and to facilitate its climate control. It includes the building’s roof, subfloor, exterior doors, windows, and walls, playing a key role in energy efficiency.

Building Permit (BP)

A building permit is a document issued by the local government that approves the construction, alteration, or demolition of property. Second or subsequent presale condo deposits are often payable at or shortly after the receipt of the building permit.

Buyers Agent Commission

Buyers agent commission is the fee paid to a real estate agent representing the buyer in a property transaction. It is often a percentage of the property’s sale price. Please check out our page on how much commission a Realtor makes on a presale condo.

Commission

See buyers agent commission above.

Completion Date

The completion date is the day when the construction of a property is officially completed, as stated in the purchase agreement. At this point, the legal ownership typically transfers from the developer to the buyer.

Conveyancer

A conveyancer is a legal professional who specializes in the legal aspects of buying and selling real property, such as the transfer of ownership from the seller to the buyer.

Conveyancing

Conveyancing is the legal process involved in buying and selling property. It includes the preparation of documents for conveyance, the deed to transfer title, and the contract of sale. Conveyancers work with the Land Titles Office (see below) to transfer ownership.

Cross-Laminated Timber (CLT) Construction

Cross-Laminated Timber (CLT) is an engineered wood product composed of kiln-dried lumber layers glued at right angles, forming structurally rigid panels. CLT is used in construction as an alternative to concrete for walls, roofs, floors, and ceilings, suitable for multistorey buildings, and offers fire and rot resistance.

CREA

The Canadian Real Estate Association (CREA) is a national trade association of REALTORS® in Canada. CREA owns the MLS® System and operates REALTOR.ca, a real estate listing website.

Decorating Allowance

A decorating allowance is a price discount on a presale condo, but structured in a way to keep it confidential.

A decorating allowance is when a developer gives a presale condo buyer in the presale purchase contract a credit that is payable upon the completion of the condo instead of reducing the price on the contract of said presale condo. To outside observers it will look as though the buyer paid full price.

Developers do this so as to not aggravate other buyers of similar presales who did not get the decorating allowance.

Deficiency

A deficiency in real estate refers to any issue or flaw found in a newly completed presale condo during a deficiency walkthrough or home inspection. In terms of BC presale condos, the developer is responsible to have all these deficiencies fixed either upon possession day or shortly after.

Deficiency Walk Through

A deficiency walk through is an inspection of a newly constructed home before the final handover. The builder and the buyer identify any outstanding issues or defects that the builder needs to fix.

Deficiency walk throughs in BC typically occur a few weeks before completion and a buyer should expect most of the issues identified to be repaired by the possession date.

Developer

A developer is a professional or a company that purchases land and raises money from investors to pay for the construction of real estate projects.

They create new structures, ranging from residential homes to commercial properties, or renovate existing ones.

Their goal is to add value to the land and sell it for a profit.

Here is a comprehensive list of developers in Vancouver.

Development Permit (DP)

A development permit is a document issued by local government authorities that grants permission for a specific type of development to proceed on a particular parcel of land.

Second and third, and sometimes fourth presale condo deposits are sometimes payable either upon the developer receiving the (DP) or shortly thereafter.

Disclosure of Representation in Trading Services (DORTS)

DORTS or the Disclosure of Representation in Trading Services form is a document that real estate professionals in British Columbia are required to provide to clients. It explains the different types of representation relationships that can exist between consumers and real estate professionals.

Disclosure Statement

The presale condo disclosure statement, mandated by BC’s Real Estate Development Marketing Act (REDMA), is a document that developers must provide to potential buyers before a purchase. It discloses crucial information about the development, such as the developer’s background, construction details, strata information, and financial arrangements, ensuring transparency and informed decision-making.

A developer needs to file a Disclosure Statement with BC government before they can quote exact prices, sell units, or reserve units, among other things.

Display Centre

A display centre is a showcase or presentation area where a developer presents a model or replica of the proposed building/condo in the form of a display suite (see below), allowing potential buyers to visualize the finished product.

Display Suite

A display suite, similar to a show home, is a fully decorated unit that serves as an example of the finished product in a development. It’s used to show potential buyers the quality, layout, and design of the units.

Drop Dead Date

A drop dead date is a final and absolute deadline that, if not met, can result in the termination of a contract. This will be found in the presale condo disclosure statement.

In terms of presales in BC, should the developer hit the drop dead date and there is no condo forthcoming, the buyer typically will get their deposits back as presale deposits are held in a trust account (see below) as per REDMA.

The drop dead date can be found in the Disclosure Statement.

Early Access

Early access allows potential buyers to view and potentially purchase a presale condo before it’s made available to the general public. Vancouver New Condos clients routinely get early access to preview and purchase presale condos across BC, please contact us for details.

Envelope

See building envelope above.

Equity

Equity is the value of a property after subtracting the amount of any outstanding mortgages or liens against it. In other words, it represents the amount of money a homeowner would receive if they sold the property and paid off the loans.

FINTRAC

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada’s financial intelligence unit. Its mandate is to detect, prevent and deter money laundering and the financing of terrorist activities.

Flipping

Flipping in real estate involves buying a property and then quickly reselling it for a profit. This is often done after making renovations and improvements to increase the property’s value.

Flipping sometimes is used for the practice of selling a presale condo shortly after completion. This term is not widely used in the professional real estate industry.

Foreign Buyers Ban

on January 1, 2023, Canada’s Federal Government enacted a Foreign Buyers Ban prohibits the purchase of real estate by foreign individuals or entities in Canada, with the aim of controlling rising property prices and making housing more affordable for local residents. The Foreign Buyers ban expires on December 31, 2024.

In British Columbia, the ban is redundant due to the pre-existing BC Foreign Buyers Tax (see below).

Foreign Buyers Tax

The British Columbia Foreign Buyers Tax is a 20% tax levied on the fair market value of real estate properties in certain popular parts BC, purchased by individuals who are not citizens or permanent residents of that country.

FVREB

The Fraser Valley Real Estate Board (FVREB) is a professional association of real estate brokers and agents in the Fraser Valley region of British Columbia.

General Partners

General partners are members of a partnership who have management control, share the right to use partnership property, share the profits in predefined proportions, and have joint and several liability for the debts of the partnership.

Developers often use this structure and are often the general partners of the project they are developing by working with Limited Partners (see below)

Home Inspection Report

A home inspection report is a document that outlines the findings of a home inspector. It includes details about the property’s condition, any necessary repairs, and any potential problems.

Home Inspector

A home inspector is a professional who examines a property for any structural, electrical, plumbing, or other significant issues before a real estate transaction.

In terms of presale condos in BC, we often have home inspectors attend the deficiency walk through as they are able to spot issue may be over looked. This is best practice in our view.

Holding Company (Sometimes referred to as a Hold Co)

In the context of real estate in Canada, a holding company refers to a lawful establishment, typically a corporation, which possesses real estate assets for the aim of investment. Its advantages include safeguarding against liabilities, possibly advantageous tax conditions, and can assist with property management and estate planning while minimizing the perils associated with direct ownership.

Investors will often use Holding Companies to purchase presale condos in BC.

Incentives

Incentives are extras added by developers to make a deal more attractive to buyers. They can include things like free upgrades, price reductions, or decorating allowances (see above).

Investor

An investor is an individual or entity that puts money into property with the expectation of achieving a financial return. This could be through rental income, the future resale of the property, or both.

An investor in terms of presale condos, can either be the presale purchaser or one of the limited partners who have invested money with the developer allowing the development of the project.

Key Pick Up

Key pick up refers to the event where the buyer collects the keys to the property. This typically happens on the possession date after the sale is completed and all necessary paperwork is finalized for the conveyancing (see above).

Land Titles Office

The BC Land Titles Office, part of the Land Title and Survey Authority of British Columbia (LTSA), is responsible for registering land ownership rights in British Columbia, Canada. It maintains an up-to-date, reliable record of land ownership and interests, ensuring the security of property ownership in the province.

Lender

A lender is a bank, credit union, or other financial institution that provides funds to a borrower with the expectation that these funds will be paid back, with interest, according to a set schedule.

Leverage

In real estate, leverage refers to the use of borrowed funds to finance the purchase of property, with the expectation that the property itself will generate a return greater than the interest owed. Presales are often bought using financial leverage in the form of loans. Presale purchase are also a form of leverage as they allow a purchased to secure a property without having to pay the entire price of the purchase until a later date.

Limited Partnership

A limited partnership is a type of partnership composed of one or more general partners (who manage the business and are personally liable for partnership debts) and one or more limited partners (who contribute capital and share in profits but take no part in running the business and incur no liability with respect to partnership obligations beyond their capital contributions).

Limited Partners

Limited partners are members of a limited partnership who invest capital but have limited liability and are not involved in day-to-day management. They share in the profits but their losses are limited to their investment.

In terms of presales and real estate, limited partners invest with the developer to allow the developer to build the development.

Marketing Company

A marketing company is hired by the developer to advertise the presale project and attract potential buyers. They create and implement the marketing strategy.

Marketing Strategy

A marketing strategy is a plan of action designed to promote and sell a product or service – in this case, a presale condo. It outlines the methods and channels the developer or marketing company will use to reach potential buyers.

Presale marketing companies use marketing strategies to sell presales. We use marketing strategies to sell presale condo assignments and to get new clients.

Material Changes

Material changes are significant alterations or events that could influence a buyer’s decision about a property purchase. They must be disclosed to potential buyers.

Confirm with a lawyer, but material changes often create a right of rescission in a presale condo purchase.

Notary

A notary, or a notary public, is a licensed individual who can witness and authenticate documents, administer oaths, and perform other wide-ranging administrative functions.

Notaries in BC can act as a conveyancer to transfer ownership of a presale from the developer to the presale purchaser.

Power of Attorney

A power of attorney is a legal document that gives one person (the agent or attorney-in-fact) the power to act for another person (the principal). This can include signing documents or making decisions related to property, depending on the extent of power given.

Penthouse

A penthouse is an apartment or unit located on the top floor of a multi-story building. Penthouses often are more expensive than other units in the building due to the fact they are at the top of the building so have better views. Penthouses also tend to be larger than other units in the building and have higher status.

Presale Condo

A presale condo is a property that is available for purchase before the construction of the building has been completed. It offers potential homeowners the chance to invest in a brand new property often at a reduced price due to the risk associated with buying unseen. Please have a look at our page on what is a presale condo?

Presale Condo Assignment

A presale condo assignment is a type of transaction where the original buyer (the assignor) of a presale condo sells their rights to the property to a new buyer (the assignee) before the condo is completed.

Presale Requirements

Presale requirements are specific conditions imposed by a lender that must be fulfilled by a developer. Typically this will be a requirement of the developer to pre-sell a certain percentage of the development to confirm the market viability of the project before the lender will release the funds to construct the building.

Vancouver New Condos work with developers and marketing companies, to help them meet their presale requirements. Often we get our presale buyer clients discounts and incentives in early on in marketing campaign to help developers reach their presale requirements.

Preview Package

A preview package is a set of documents often with floor plans and project features, similar to an A Kit, provided to potential buyers or realtors before the official launch of a presale project. It gives them an exclusive first look at the development. See A-Kit.

Price List

A price list is a detailed list showing the exact prices of the different condo units available in a presale development.

Price Range List

A price range list is similar to a price list, but instead of specific costs, it provides a range of possible prices for each type of unit, reflecting variations due to size, location in the building, views, etc.

We often get a price range list before the disclosure statement is filed.

Real Estate Board

A real estate board is a governing body that sets standards and regulates the practices of real estate professionals within a specific geographic area.

Real Estate Lawyer

A real estate lawyer specializes in legal matters related to property, from transactions to disputes. They can provide advice, write documents, and represent clients in court. It is always good to consult with a real estate lawyer when buying presales.

REDMA

The Real Estate Development Marketing Act (REDMA) is a British Columbia statute that provides protection for consumers who purchase development units. It outlines developers’ disclosure obligations and buyers’ rescission rights.

RESA

The Real Estate Services Act (RESA) is legislation in British Columbia that provides a legal framework for the licensing and regulation of real estate professionals. It is enforced by the British Columbia Financial Services Agency.

REBGV

The Real Estate Board of Greater Vancouver (REBGV) is a member-based professional association of nearly 14,000 REALTORS® and their companies who specialize in residential and commercial real estate in the Greater Vancouver area.

Right of Rescission

The right of rescission, or rescission period, is a time period after a contract is signed during which the buyer can choose to cancel the deal without penalty. In British Columbia, REDMA provides a seven-day rescission period after the acceptance of a purchase agreement for a development unit. See 7-Day Rescission Period below.

A right of rescission can also be created if there a material change in the circumstances of the presale. Please consult with a qualified lawyer for more details.

Sales Staff

Sales staff are employed by developers or marketing companies to promote and sell presale condos to potential buyers.

7-Day Rescission Period

The 7-day rescission period in British Columbia, a legal provision that allows potential buyers of presale condos to cancel their purchase agreement within seven days of acceptance. The page discusses the purpose, process, and implications of this period, offering advice on how to navigate it effectively. Right of Rescission above.

Show Home

A show home, or model home, is a fully furnished and decorated property in a new housing development that prospective buyers can view to get an idea of what their home might look like once completed. See Display Suite.

Sold Out

“Sold out” means that all the units in a condo development have been purchased.

Statistics or “Stats”

These are the local real estate statistics provided by the local real estate boards in the areas Vancouver New Condos cover. These statistics allow buyers to understand what is happening with the various real estate markets across BC. Please have a look at our page with BC real estate statistics we update monthly.

Suite Selection Form

A suite selection form is a document that buyers fill out to indicate their preference for a particular unit in a development. It usually includes details such as the floor plan, location, price, and finishings.

Trust Account

A trust account is a separate bank account used by a real estate brokerage to hold client or third party funds, like deposits on a property, in trust until a transaction is completed or collapsed.

In terms of presales in BC, all presale condo deposits are held in a trust account and are protected according the requirements of REDMA.

Upgrades

Upgrades refer to enhancements or premium options available for a condo beyond the standard specifications. They may include higher quality materials, appliances, or finishes.

Vancouverism

Vancouverism is an urban design philosophy originating from Vancouver, Canada, characterized by a high-density living concept that combines tall, slim residential towers with public amenities like parks, plazas, and waterfront access, promoting walkability, sustainability, and a vibrant urban life. It also emphasizes striking a balance between nature and built environments.

VIP Access

VIP Access grants special privileges to certain potential buyers, such as first pick of units, access to exclusive events, or discounted prices before the public launch of a presale condo.

Vancouver New Condos routinely gets our clients VIP access to presale projects due to our deep long term relationships with developers and marketing companies across BC.

Whale

In the presale condo and real estate context, a ‘whale’ refers to a Realtor who’s clients buy lots of presale condos.

Vancouver New Condos is a whale.

Witness

A witness is an individual who signs a document confirming that a specific person signed the contract. You will find a place for witnesses to sign on presale condo purchase contracts beside where the buyer signs.

5 Year Warranty Review

The 5-year warranty review is part of the new home warranty in BC (see below) that covers building envelope, including defects in the structure of a new home. Prudent Strata Councils will have a 5 year warranty review prior to the end of the warranty to get all the issues repaired at the warranty companies expense.

BC New Home Warranty – 2-5-10 Warranty

New homes in British Columbia are subject to BC New Home Warranty. This warranty offers 2 year coverage on labour and materials, 5 year coverage on the building envelope including water penetration, and 10 years of the structure of the building.

One advantage of buying presales is that you receive a new condo with a full warranty allowing for hassle free ownership with the ability to control costs during the first few years of ownership.

Warranty Repairs

Warranty repairs are fixes that are covered by a warranty. In the context of real estate, these might be repairs made to a newly constructed home that are covered under a home warranty.

FAQ: Using the Real Estate Terms Glossary for Presale Condos in British Columbia

1. What is the purpose of the real estate terms glossary?
   • The glossary provides definitions and explanations for various terms related to presale condos in British Columbia, helping potential buyers, investors, and other stakeholders understand industry-specific jargon.
2. How can I use this glossary to make informed decisions?
   • By referring to the glossary, you can clarify any unfamiliar terms you encounter in presale condo contracts, marketing materials, or discussions with real estate professionals, ensuring you fully understand the details before making decisions.
3. I’m new to real estate in BC. How can this glossary help me?
   • If you’re new to the BC real estate market, the glossary can serve as a foundational resource, introducing you to key terms and concepts, and helping you navigate the presale condo buying process with confidence.
4. Can I use this glossary for other real estate transactions outside of presale condos?
   • While the glossary is tailored to presale condos in BC, many terms are applicable to broader real estate contexts. However, always ensure you consult additional resources or professionals for terms specific to other types of real estate transactions.
5. How often should I refer to the glossary?
   • Whenever you come across a term you’re unfamiliar with or unsure about, it’s a good idea to refer to the glossary. Over time, as you become more familiar with the terms, you may find you need to consult it less frequently.
6. Are there any terms in the glossary that are specific to BC regulations?
   • Yes, terms such as “REDMA” (Real Estate Development Marketing Act) are specific to BC regulations and are crucial for understanding the legal framework of presale condos in the province.
7. Can the glossary help me in negotiations or discussions with developers or agents?
   • Absolutely! By understanding the terms and their implications, you can engage in more informed and confident discussions, ensuring you’re on the same page as industry professionals.
8. I’m an international buyer. How can the glossary assist me?
   • The glossary can help international buyers understand terms that might be unique to the Canadian or BC real estate market, ensuring clarity in cross-border transactions.
9. How can I suggest new terms to be added to the glossary?
   • Typically, websites have a feedback or contact section where you can suggest additions or modifications. It’s always a good idea to reach out if you believe a crucial term is missing.
10. Is the glossary updated regularly to reflect changes in the industry or regulations?

• While I can’t speak for the specific update frequency of the provided link, it’s common for reputable real estate platforms to update their glossaries to reflect industry changes and ensure users have the most accurate information.

We love Feed back in Regards to Real Estate Terms for Presales in BC!

These real estate terms for presales in Canada are to educate the potential buyers of presale condos here in Canada. Please consult with a qualified real estate lawyer should you have any concerns.

We love feed back and would love for you to let us know if any of these real estate terms are inaccurate or if we should add new real estate terms.