Not so Fast: REDMA Amendments May not Have Retrospective Effect

On May 29, 2014, the Miscellaneous Statutes Amendment Act, 2014 received royal assent. It made significant amendments (the “Amendments”) to the Real Estate Development Marketing Act, S.B.C. 2004 c. 41 (“REDMA” or the “Act”).

One such Amendment relates to a developer’s ability to retain a purchaser’s deposit not only for failing to pay a subsequent deposit but also for failing to complete the purchase. Another significant Amendment imposes a one year time limit on a purchaser’s post-closing right of rescission. For further information about these and other significant Amendments, see our previous post on the subject here.

The question of the extent to which these changes apply to matters pre-dating when the Amendments came into force does not have a straight-forward answer.shutterstock_281345081

The starting point is the general presumption at law that new legislation will not be retroactive when it would affect substantive rights. There is nothing in REDMA or the Amendments that rebuts this presumption against retroactive application. As such, rights that arose prior to the Amendments that are both substantive rights and vested rights will be determined by the provisions of REDMA prior to the Amendments.

Thereafter two questions remain: a) are the rights substantive; and b) are the rights vested? At first blush, both questions appear straightforward, but in fact the answers are nuanced and contextual.

The easier one to answer is whether the rights are procedural or substantive. When legislation is procedural, it applies immediately to the determination of all rights, past, present or future. By contrast, where legislative provisions create or alter substantive rights or impose or alter substantive obligations, the amendments do not apply retroactively.   Meanwhile, if amendments alter procedures that affect substantive rights, they are treated as substantive provisions. While the Amendments appear to alter substantive rights and obligations, or at the very least create procedural tools that affect substantive rights, arguably some of the Amendments are more procedural in nature and thus may have retroactive effect.

Whether the new or old legislation applies also depends on at what point the right is seen as “vested” or “crystallized”. If the factual situation and legal effects were on-going at the time of the Amendments, the new provisions of the Act would apply. However, if the factual situation and legal effects giving rise to the right arising under REDMA crystallized prior to the Amendments, then the right vested prior to the Amendments, and the right will be determined under the provisions of REDMA prior to the Amendments.

Ultimately, whether a right is procedural or substantive, and whether a right is vested, necessitates a fact-specific enquiry.

In sum, parties seeking to determine whether the Amendments apply to issues that may pre-date the Amendments’ coming into force should be mindful of these considerations and are encouraged to seek legal advice.

amendment legislation Miscellaneous Statutes Amendment Act Real Estate Development Marketing Act REDMA



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