New ‘early planning agreements’ in some condominium contracts could prevent potential buyers from getting their deposits refunded.
Service Alberta is warning prospective condo owners to read contracts very carefully, after a consumer called in to report this new agreement, in which the developer is under no obligation to refund deposits.
"When you sign it, it says ‘non-refundable’ at the very top," explains Heather Klimchuck, Minister of Service Alberta. "So, if the consumer signs it … they will not get their $1,000 back, or however much the developer has asked for."
‘Early planning agreements’ give developers authority to design a condo according to the buyer’s specifications, and allows buyers the option of signing a purchase agreement later at an agreed price.
The Condominium Property Act gives buyers the right to cancel a contract with 10 days of signing a purchase agreement, and receive a full refund. However, ‘early planning agreements’ are not covered.
"The last time the act was reviewed was 10 years ago, so this is an example of a little nuance that developers have kind of figured out to try to hold property, and perhaps raise revenue," says Klimchuk.
Service Alberta is investigating the new agreements, and is reviewing the Condominium Property Act. Klimchuk encourages anyone similar concerns to report them to Service Alberta. "If more of these situations come up, then of course, we’ll have to continue to review and take action."
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