What Happens If You Can’t Close on a Presale Home in BC?
If you bought into a presale a few years ago, you probably did so under very different circumstances. Interest rates were historically low, mortgages felt attainable, and the cost of living—while always high in the Lower Mainland—wasn’t quite where it is today. Fast forward to 2025, and many presale purchasers are struggling to close. Higher borrowing costs, tighter lending rules, and everyday financial pressures mean that some buyers simply cannot complete on the units they committed to purchase years ago.
This reality has created a wave of stress, confusion, and unfortunately, disputes. Developers still expect purchasers to complete, while many buyers are asking themselves: “What happens if I can’t? That’s where understanding your legal position becomes critical.
What are your legal obligations as a purchaser?
When you sign a presale contract, you’re committing to being ready, willing, and able to complete the purchase on closing. That means having financing in place, covering closing costs, and taking title to the property. It doesn’t matter if market conditions change or if your personal circumstances shift… unfortunately, your legal obligations remain the same.
That said, not every presale contract is identical. There are clauses and conditions that can sometimes change your options, which is why having a lawyer for reviewing your presale contract is so valuable.
What to do if you cannot complete on your purchase
If you’re facing the possibility of not completing on the new construction, the first step is to look at whether you can assign your contract. Many presale agreements allow you to assign (sell) your rights to another buyer, although developers may charge an assignment fee and impose conditions.
If assigning your presale contract isn’t possible or doesn’t generate enough interest, then the next option is to explore alternative lending. Private financing or secondary lenders sometimes bridge the gap when traditional banks won’t lend.
If neither path works and you still cannot complete, it’s time to get legal advice. Speaking with a lawyer for presale agreements early can make the difference between damage control and disaster.
What are the legal consequences for not completing?
Failing to complete on a presale contract carries serious legal consequences. At a minimum, you risk losing your deposit. But it doesn’t stop there. Developers can also sue you for:
- The difference between your contract price and the eventual resale price (if the market has dropped);
- Their legal costs associated with enforcing the contract; and
- Interest and carrying costs they’ve incurred while holding the unit.
In short, walking away without sound legal advice is financially dangerous.
What are some legal ways to get out of a presale contract?
While presale contracts are legally binding, there are limited situations where a purchaser may have a legitimate legal exit. These include:
- Misrepresentation: If the developer misrepresented material facts about the project or unit, then you may have grounds to rescind.
- Construction delays: If the new construction project doesn’t complete by the “outside date” specified in the presale contract, then you may have the option to walk away.
- Contract clauses: Each presale agreement is unique. Some contain protections or escape routes that buyers aren’t aware of until a lawyer for reviewing presale agreements carefully examines the fine print.
This is why a presale contract review isn’t just a formality. In fact, it can be your safety net.
Why you need legal representation if you’re sued
Not every purchaser who defaults on a presale is sued, but the risk is real. If you are sued, it’s critical to act fast. In BC, you only have a limited window of time to file a response to a Notice of Civil Claim. If you don’t respond, the developer can obtain a default judgment against you. That means they automatically win, and you lose the ability to defend yourself or negotiate terms.
Even if the law or facts aren’t fully on your side, having a real estate litigation lawyer can protect your interests. A skilled lawyer can negotiate settlements, advocate for reduced damages, or structure payment terms that minimize financial fallout. You don’t want to be navigating this process alone.
If you’re based in Surrey or anywhere in the Lower Mainland, our team is positioned to represent you. As real estate litigation lawyers, we can step in and guide you through the process.
Moving forward with legal support
The presale market in BC is undeniably tough right now. Many good-faith purchasers are finding themselves in situations they never anticipated. If you’re worried about completing your presale purchase, or if you’re already facing legal action, know that you’re not alone.
At Cunningham & Co., we’re in your corner. We’ve helped clients understand their presale contracts, assess their options, and defend themselves when developers take aggressive action. Whether you need upfront advice from a real estate litigation lawyer or proactive protection through a presale contract review, we’re here to help.
Book a free consultation today to learn more about your options and protect your future.
