Real estate developers in British Columbia are reminded of their continuing obligations pursuant to Part 2.1 of the British Columbia Real Estate Development Marketing Act (REDMA) in respect of the Condo and Strata Assignment Integrity Register (CSAIR). These requirements, in place since January 1, 2019, continue to apply to the sale and assignment of strata lots in the province.1 Non-compliance can result in material administrative penalties and cease marketing orders, which can add significant costs and cause significant delays to the marketing of new developments.
What is Required?
1. Disclosure Obligation
A developer subject to Part 2.1 of REDMA must include mandatory language in its disclosure statements and purchase agreements (Contracts) regarding assignments of Contracts (Assignments), as required under Policy Statement 162 and the Real Estate Development Marketing Regulations (Regulations), setting out the following:
- whether Assignments are permitted;
- any conditions with respect to permitted Assignments, such as a requirement of developer consent or payment of an assignment fee;
- that the developer is obliged to collect and report assignment information to CSAIR; and
- that the developer will retain such records for the prescribed period as required under the Regulations.
2. Assignment Reporting Through CSAIR
Subject to certain exemptions, a developer must track, collect, and report information on all Assignments signed on or after January 1, 20193, using the CSAIR portal administered by the Property Transfer Tax Branch and the Land Title and Survey Authority.
Reporting requirements include:
- the identity of the assignor and assignee, including full legal names, addresses, and contact information;
- Contract details, such as the date of the original contract, unit number and purchase price;
- Assignment terms, including the date of assignment, any profit or consideration paid for the assignment and confirmation of developer consent; and
- date of deposit of the strata plan with the Land Title Office (LTO), where applicable.4
Reporting Periods
A developer must submit this data on a quarterly basis, within 30 days of a completed calendar quarter, continuing until the quarter following strata plan deposit with the LTO.5 After that, annual reporting is required until one of the following occurs:
- the developer ceases development;
- all strata lots have been transferred;
- the development property is sold; or
- six consecutive years of annual CSAIR reports have been completed by the developer.6
There is no filing fee payable in respect of standard reporting requirements where no Assignments are being reported. However, a filing fee of C$195 applies to each Assignment reported via the portal. A developer must retain copies of assignment documentation for a prescribed retention period of at least six years from filing the strata plan in case of audit or regulatory review.7
Penalties
Failure to comply with CSAIR reporting requirements, including the filing of inaccurate information, constitutes an offence under REDMA. In such instances, developers may become liable for administrative penalties of up to C$500,000, in the case of a corporation, or C$250,000 for individuals.8 Moreover, developers may also be subject to orders by the Superintendent of Real Estate (Superintendent) including the potential issuance of an order to cease marketing all or part of the development.9
The Superintendent may, in lieu of penalties, require that the directors of a developer provide an undertaking to register the Development on the CSAIR portal immediately and to file an assignment activity report during the next filing window to meet all outstanding filing requirements. While all other CSAIR filings are made using the LTSA portal, this undertaking is submitted to the BC Financial Services Authority using the new Integrated Regulatory Information System (IRIS) portal.
Key Takeaways
The obligations under REDMA and CSAIR are no longer new, but they remain a core part of development compliance in British Columbia for new units, in particular now that BC has introduced its new "flipping tax". The BCFSA regularly notifies developers who miss a filing period, as it continues to closely monitor Assignments to address concerns about speculation and transparency in the real estate market.
Developers are strongly advised to review their disclosure documents, purchase agreements, and CSAIR reporting processes to ensure full compliance. Non-compliance can result in material financial penalties and the issuance of cease marketing orders.
1 While REDMA applies to developments located both within and outside of British Columbia, the CSAIR obligations are limited to development properties in British Columbia.
2 See Section 20.3 of the Real Estate Development Marketing Act, R.S.B.C 2004, c. 41; Section 10.2 of the Real Estate Development Marketing Regulation (B.C. Reg. 505/2004); and Policy Statement 16 [Real Estate Development Marketing Act] of the British Columbia Financial Services Authority (available here)
3 Section 20.4 of the Real Estate Development Marketing Act R.S.B.C 2004, c. 41
4 See Section 10.3 of the Real Estate Development Marketing Regulations (B.C. Reg. 505/2004)
5 See Section 10.6 (1) of the Real Estate Development Marketing Regulations (B.C. Reg. 505/2004)
6 See Section 10.6 (3) of the Real Estate Development Marketing Regulations (B.C. Reg. 505/2004)
7 See Section 10.4 of the Real Estate Development Marketing Regulations (B.C. Reg. 505/2004)
8 See Section 30(1) of the Real Estate Development Marketing Act R.S.B.C 2004, c. 41
9 See Section 30(2) of the Real Estate Development Marketing Act R.S.B.C 2004, c. 41
