Deposit Protection (REDMA)

Under the Real Estate Development Marketing Act (REDMA), SBC 2004, c. 41, presale deposits paid by purchasers of new development units must be held in trust by the developer's lawyer, notary public, or an approved trustee until closing or release under the Act. This trust requirement protects purchasers against developer insolvency or misuse of funds. Verify current REDMA requirements and your specific purchase contract with a BC lawyer or notary before acting.

REDMA requires that presale deposits be held by the developer's lawyer, notary public, or another trustee approved under the Act. The deposit cannot be released to the developer until the conditions set out in REDMA and the disclosure statement are met. Verify the identity and authority of the trustee named in your purchase agreement with a BC lawyer or notary before depositing funds.

Under REDMA, the developer generally cannot access presale deposits until the project reaches specific milestones, such as obtaining building permits, arranging financing, or completing construction to a specified stage, as disclosed in the disclosure statement. The exact release conditions must be disclosed in the disclosure statement filed with the Superintendent of Real Estate under REDMA. Verify the specific release conditions in your disclosure statement and contract with a BC lawyer or notary.

REDMA applies to the presale marketing of most new residential development units (such as condos, townhouses, and subdivision lots) in British Columbia, but exemptions exist for certain types of transactions and properties. Whether your purchase is subject to REDMA depends on the type of property, the timing of the sale, and whether an exemption applies. Verify whether REDMA applies to your specific purchase with a BC lawyer or notary before acting.

Because REDMA requires presale deposits to be held in trust by a lawyer, notary, or approved trustee (not by the developer directly), the deposit should be protected as trust funds and not available to the developer's creditors in bankruptcy. However, purchasers should verify the trust arrangement and confirm that deposits were properly held in compliance with REDMA. Verify your specific situation and legal remedies with a BC lawyer or licensed insolvency professional immediately if developer insolvency occurs.

No, REDMA does not provide government deposit insurance or guarantee. REDMA requires trust holding of deposits, but it does not insure them against all risks (such as trustee fraud or misappropriation). Purchasers rely on the statutory trust protections under REDMA and the professional obligations of the lawyer or notary holding the funds. Verify current protections and any available insurance or bonding with a BC lawyer or notary before depositing funds.

The disclosure statement required under REDMA must identify the trustee (lawyer, notary, or approved entity) holding the deposit and the conditions for release. You should receive a trust receipt or acknowledgment from the trustee confirming receipt of your deposit. Verify that the trustee named in your purchase contract matches the disclosure statement and confirm proper trust holding with a BC lawyer or notary.

REDMA provides a statutory rescission period (typically seven days after receiving the disclosure statement, as of 2026-07-27 — verify current) during which a purchaser may rescind without penalty and receive a full refund of the deposit. Outside this period, your right to a refund depends on the terms of the purchase contract and whether the developer has breached REDMA or contract obligations. Verify rescission rights and deadlines with a BC lawyer or notary immediately if you wish to cancel.

Under REDMA, developers must file and provide purchasers with a disclosure statement containing prescribed information about the development, the developer, and the terms of the purchase, including who will hold deposits in trust and the conditions for release. The disclosure statement is a key document for understanding your deposit protection. Verify that you have received a complete, filed disclosure statement and review it with a BC lawyer or notary before signing a purchase agreement.

REDMA is administered and enforced by the Superintendent of Real Estate, operating under the British Columbia Financial Services Authority (BCFSA) (as of 2026-07-27 — verify current regulatory structure). The Superintendent can investigate non-compliance, refuse to accept disclosure statements, and take enforcement action against developers who fail to comply with REDMA. If you suspect a REDMA violation, verify your complaint and enforcement options with a BC lawyer or contact BCFSA directly.