What Is a Pre-Sale Condo?

A pre-sale condo (also called off-plan or pre-construction) is a strata unit purchased from a developer before the building is completed. You sign a purchase contract today, pay deposits over a schedule, and take possession months to years in the future when the building registers with the land title office.

Pre-sales dominated the Vancouver condo market for decades because they let developers sell units to finance construction. For buyers, they offer the chance to lock in a price early — but they carry real risks that resale purchases do not.

The 7-Day Rescission Period

Under the BC Real Estate Development Marketing Act (REDMA), buyers of new strata units have a 7-day rescission period after signing a purchase contract or receiving a disclosure statement (whichever is later) to cancel the agreement without penalty and receive a full refund of any deposit paid.

This right cannot be waived contractually. Use the 7 days to have an experienced real estate lawyer review the entire contract, disclosure statement, and all schedules. The cost of a legal review ($500–$1,500) is trivial compared to the risk of signing a six- or seven-figure contract with unfavourable terms.

Deposit Structure in BC

Developer contracts in BC typically require deposits totalling 15%–25% of the purchase price, paid in tranches: an initial deposit of 5% on signing, a second tranche of 5% within 90 days, and sometimes additional amounts tied to construction milestones.

Deposits must be held in trust by the developer's lawyer. They are protected by REDMA if the developer goes bankrupt before completion — however, you must ensure the contract specifies the trust obligation. Deposits do not accrue interest to the buyer unless the contract explicitly states otherwise.

Assignment Clauses

An assignment allows the original buyer to sell their purchase contract to a third party before the building completes. If you buy pre-sale and the market rises, you may want to "flip" the contract for a profit rather than completing the purchase.

Not all developer contracts permit assignment. Some prohibit it entirely; others allow it with developer consent and a fee (often $1,000–$5,000). Assignments of pre-sale contracts are subject to the GST/HST rules — sellers typically must charge GST on the profit (not the sale price) unless the buyer intends to use the unit as their principal residence.

If the market falls, your assignment clause protects you less — you may struggle to find a buyer willing to pay your contract price. Never count on assignment as an exit strategy.

Completion Risk

Pre-sale timelines slip constantly. Permitting delays, labour shortages, and material costs have stretched Metro Vancouver projects by one to three years beyond original estimates. Your contract will specify a "sunset clause" — a long-stop date after which either party can walk away and the deposit is returned.

Developers sometimes exercise the sunset clause deliberately when prices have risen and they want to re-sell units at higher prices. BC amended REDMA in 2022 to require developer consent or court approval to exercise a sunset clause, providing buyers more protection — but the risk is not zero.

Also budget for the GST/HST on new construction (5% federal GST applies to all new builds; there is a rebate for homes under certain thresholds). Your all-in cost at completion will also include strata fees, legal fees, and any cost overruns on finishing allowances.

Reviewing the Disclosure Statement

The developer must provide a Disclosure Statement registered with BC Housing before you can sign a binding contract. This document contains the strata plan, proposed bylaws, estimated monthly strata fees, development cost charges, and any material changes from prior amendments.

Pay close attention to: the strata fee estimate (it almost always rises after handover), the size of the contingency reserve fund contribution, parking and storage stall allocation, and any rental or age restrictions in the proposed bylaws. If you plan to rent the unit, confirm it is not restricted.

Pre-Sale vs. Resale: Which Is Right for You?

Resale condos let you see exactly what you are buying, move in quickly, and negotiate based on current market conditions. Pre-sale offers a locked price and a newly built unit — but you wait years, accept unknown conditions at completion, and take on developer-specific risk.

In a rising market, pre-sale buyers have profited handsomely. In a declining or flat market, they may find themselves completing on a unit worth less than their contract price, with their mortgage commitment expiring and lenders requiring a new appraisal. Have a clear financial plan for both scenarios before you sign.