Anyone who has ever bought, or looked into buying, a condominium, knows that owning a condo is really very different from owning a house. First, there is the condo corporation. Then, there are matters such as the condo board, the condo fees, common areas, the reserve fund, and the by-laws. Now, for potential buyers of incomplete condos, we can add “early planning agreements” to the list of things they really need to learn about.
An early planning agreement is a contract which authorizes the developer to design a condominium according to the buyer’s specifications and gives the buyer the option to sign a purchase agreement later at an agreed upon price. Although this sounds like a great idea (a condo made just for me!!), it has led to some problems, and those problems have started to wind their way through the courts.
The issue? Early planning agreements are not covered by the Condominium Property Act, which otherwise gives buyers the right to cancel a contract within 10 days of signing a purchase agreement with a developer, as well as the right to a full refund within 10 days of the developer receiving notice to cancel. In early planning agreements, on the other hand, there may be no right to refund of the deposit at all. What you are entitled to depends on what you signed, and each contract is different. That being the case, court results have varied, depending on the specifics of each situation.
So, as always, be sure to read you contract very carefully before you sign it. Ensure that any cancellation and deposit refund rights are clearly spelled out and that you understand them. Consider getting independent legal advice.
For more information on early planning agreements, see Service Alberta’s news release.
For more information on condo-buying in general, see Service Alberta’s tipsheet about buying and owning a condo.