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The Alberta government advises potential condo buyers to read early planning agreements thoroughly before signing and handing over non-refundable deposits.
The province has received complaints from homebuyers who signed the agreements, paying up to $1,000 to reserve a condominium, who were unable to get their money back, the Calgary Herald wrote. Mike Berezowsky, Service Alberta spokesperson, added that just a handful of homebuyers have complained so far to the province.
Early planning agreements weren’t so frequent in Alberta’s condo market and are different from traditional purchase agreements covered by the Condominium Property Act. When signing a purchase agreement, the buyer obtains the right to cancel it within 10 days of signing, while early planning agreements don’t give the buyer the right to cancel the contract and get her or his money back.
“Basically, an early planning agreement is a reservation,” said Brian Stoddard, president of the Pointe of View Condominiums company that has used the agreement for more than a decade. “The unit is taken off the market, and it is reserved for them. Our agreement is clear. It’s written in clear language. We’re not twisting anyone’s arm.”
Stan Galbraith, a well-experienced real estate lawyer, said that homebuyers should make sure they understand what the document they are signing says. Using an unnecessarily long document with lots of fine print is suspicious and you should read it carefully. There are also experts willing to help you to understand all the risks.