39 Burnaby Presale Contracts Voided: What BC Condo Buyers Should Know About Project Insolvency
The buyers signed their contracts between 2020 and 2022, locked in prices when Burnaby's Metrotown corridor was climbing 8% annually. By late 2024, those same units were worth 20-30% more on paper. They never saw that money.
The Supreme Court of British Columbia granted PricewaterhouseCoopers, the court-appointed receiver for Belford Properties' "Slate" development, the authority to void presale contracts. KingSett Capital, the project's senior secured lender, initiated the insolvency proceedings to recover debt that had ballooned past what the original unit prices could cover. The buyers get their deposits back, held in trust accounts as required under BC's Real Estate Development Marketing Act (REDMA). What they lose is their place in line.
When federal insolvency law overrides consumer protection
REDMA exists to protect presale buyers. The developer holds deposits in trust. Contracts can't be terminated arbitrarily. But when a project enters insolvency under the federal Bankruptcy and Insolvency Act or Companies' Creditors Arrangement Act, those provincial protections get subordinated. A receiver's mandate is to maximize recovery for secured creditors. Individual buyers sit below them in the capital structure, their contracts unsecured.
The "Slate" case makes that hierarchy visible. KingSett Capital, facing a mismatch between what it lent and what the locked-in presale prices could generate, pushed for receivership. The court agreed. The receiver's ability to "disclaim" contracts is effectively a reset button: it lets the project survive by releasing it from obligations signed when interest rates were near historic lows and construction costs hadn't spiked.
From the lender's view, this is rational. From the buyers' view, it's asymmetric. Had the market crashed instead of rising, the developer would have held them to their contracts. When the market rises but the developer's capital stack collapses, the buyers are the ones who lose position.
The deposit-versus-opportunity split
Every voided buyer receives 100% of their initial deposit. BC's trust account regime is one of the strongest in North America for this. Zero cases in recent memory where a presale buyer lost deposit principal due to developer insolvency.
The loss is opportunity cost. A buyer who signed a presale contract in 2021 for a two-bedroom in Metrotown receives their full deposit back. When presale units complete and re-list in today's Metrotown market, pricing reflects current market conditions rather than the locked-in presale price. The buyer, now priced out of the current market, effectively subsidized the project's survival by forfeiting years of equity growth. They get their cash back, but they're starting over in a market that moved without them.
Lender-first dynamics and alternative capital
KingSett is not a traditional bank. It's an institutional alternative lender, and the shift from bank financing to private or institutional capital has changed the calculus around distressed projects. Banks historically moved slower. Alternative lenders, managing capital with specific IRR targets, are more aggressive about pulling receivership triggers when a project's economics deteriorate.
This doesn't make KingSett wrong. But it does mean that presale buyers are increasingly exposed to lender-side decisions they have no visibility into. The buyer signs a contract with the developer. The real leverage sits with the lender, whose security interest ranks ahead of the buyer's contractual claim.
Burnaby's high-density development corridor has become the test case for this dynamic. When a receiver disclaims contracts to allow re-pricing, original buyers discover that a presale contract is not a deed. It's a sub-priority claim that can be liquidated if the capital stack fails. The law is clear. The fairness gap remains.
The buyers signed their contracts between 2020 and 2022, locked in prices when Burnaby's Metrotown corridor was climbing 8% annually. By late 2024, those same units were worth 20-30% more on paper. They never saw that money.
The Supreme Court of British Columbia granted PricewaterhouseCoopers, the court-appointed receiver for Belford Properties' "Slate" development, the authority to void presale contracts. KingSett Capital, the project's senior secured lender, initiated the insolvency proceedings to recover debt that had ballooned past what the original unit prices could cover. The buyers get their deposits back, held in trust accounts as required under BC's Real Estate Development Marketing Act (REDMA). What they lose is their place in line.
When federal insolvency law overrides consumer protection
REDMA exists to protect presale buyers. The developer holds deposits in trust. Contracts can't be terminated arbitrarily. But when a project enters insolvency under the federal Bankruptcy and Insolvency Act or Companies' Creditors Arrangement Act, those provincial protections get subordinated. A receiver's mandate is to maximize recovery for secured creditors. Individual buyers sit below them in the capital structure, their contracts unsecured.
The "Slate" case makes that hierarchy visible. KingSett Capital, facing a mismatch between what it lent and what the locked-in presale prices could generate, pushed for receivership. The court agreed. The receiver's ability to "disclaim" contracts is effectively a reset button: it lets the project survive by releasing it from obligations signed when interest rates were near historic lows and construction costs hadn't spiked.
From the lender's view, this is rational. From the buyers' view, it's asymmetric. Had the market crashed instead of rising, the developer would have held them to their contracts. When the market rises but the developer's capital stack collapses, the buyers are the ones who lose position.
The deposit-versus-opportunity split
Every voided buyer receives 100% of their initial deposit. BC's trust account regime is one of the strongest in North America for this. Zero cases in recent memory where a presale buyer lost deposit principal due to developer insolvency.
The loss is opportunity cost. A buyer who signed a presale contract in 2021 for a two-bedroom in Metrotown receives their full deposit back. When presale units complete and re-list in today's Metrotown market, pricing reflects current market conditions rather than the locked-in presale price. The buyer, now priced out of the current market, effectively subsidized the project's survival by forfeiting years of equity growth. They get their cash back, but they're starting over in a market that moved without them.
Lender-first dynamics and alternative capital
KingSett is not a traditional bank. It's an institutional alternative lender, and the shift from bank financing to private or institutional capital has changed the calculus around distressed projects. Banks historically moved slower. Alternative lenders, managing capital with specific IRR targets, are more aggressive about pulling receivership triggers when a project's economics deteriorate.
This doesn't make KingSett wrong. But it does mean that presale buyers are increasingly exposed to lender-side decisions they have no visibility into. The buyer signs a contract with the developer. The real leverage sits with the lender, whose security interest ranks ahead of the buyer's contractual claim.
Burnaby's high-density development corridor has become the test case for this dynamic. When a receiver disclaims contracts to allow re-pricing, original buyers discover that a presale contract is not a deed. It's a sub-priority claim that can be liquidated if the capital stack fails. The law is clear. The fairness gap remains.
Sources
Read Next
Asset managers cut product portfolios to fund AI and outsourcing overhauls
ETFs now hold 42% of Canadian fund assets as OSC tightens crypto and liquidity rules
One in Five Canadian Parents Still Pays Bills for Kids in Their Late Thirties
Joint mortgages surge in Ontario and B.C. as first-time buyers face rising delinquency pressure