When REDMA Meets the CCAA: Unenforceable Presale Agreements and the Lumina Eclipse Decision (2026 BCSC 1598)
In August 2026, the Supreme Court of British Columbia released an important decision about the Lumina Eclipse condo project in Burnaby. Many buyers had signed presale contracts between 2021 and 2023. When the project ran into serious financial trouble, those buyers asked the Court to declare their contracts unenforceable, meaning they would not have to complete the purchase. The Court agreed with them.
1. Why Did Buyers Go to Court?
Buyers said the developer failed to tell them about major problems with the project. Under B.C.’s Real Estate Development Marketing Act (REDMA), developers must keep buyers updated about important changes, especially anything that affects construction, financing, or the developer’s ability to finish the building.
In this case, several serious issues were not disclosed to buyers, including:
A $12 million judgment against the developer The judgment was registered on title but never shared with buyers. (The judgment is described in the decision: “A $12 million judgment obtained by the Canada Revenue Agency…”)
The developer misusing $9.7 million that should have gone toward repaying loans This money was supposed to reduce debt but was spent elsewhere. (“These funds were not used to pay down the indebtedness… but rather used… in breach of the loan agreement.”)
The suspension of new home warranty insurance
The suspension of the building permit
Construction stopping entirely
A major delay in the completion date
The developer losing control of the project when it entered insolvency proceedings
None of these were disclosed when they happened.
Buyers argued that because the developer broke REDMA’s disclosure rules, their contracts were not enforceable.
2. What Is REDMA and Why Does It Matter?
REDMA is the law that protects people who buy presale condos. It requires developers to:
Give accurate information about the project
Update buyers immediately when something important changes
Avoid hiding or downplaying problems
If a developer breaks these rules, section 23 of REDMA says the presale contract cannot be enforced against the buyer.
This is not the same as cancelling the contract. It simply means the developer cannot force the buyer to complete the purchase.
3. What About the Developer Being in CCAA (Insolvency)?
The developer entered Companies’ Creditors Arrangement Act (CCAA) proceedings in early 2025. This is a federal insolvency process used to restructure or liquidate large businesses.
The lenders and the court appointed Monitor argued that because the project was under CCAA protection, buyers were not allowed to rely on REDMA.
The Court rejected that argument.
The judge explained that:
REDMA gives buyers a defence, not a “claim,” so it is not blocked by CCAA stay orders.
The CCAA cannot “revive” contracts that were already unenforceable under provincial law.
There was no conflict between REDMA and the CCAA.
In short: CCAA does not erase REDMA protections.
4. What Did the Court Decide?
The Court found that:
a. The developer broke REDMA’s disclosure rules.
The judge said the developer should have immediately disclosed the CRA judgment, the misused funds, the suspended warranty, the suspended building permit, and the construction shutdown.
b. These were “material facts.”
A material fact is something a reasonable buyer would want to know before deciding whether to stay in the deal. The Court said these issues were clearly material.
c. The presale contracts were unenforceable.
Because REDMA was breached, the developer cannot force buyers to complete their purchases.
d. Buyers acted reasonably.
The Court rejected the argument that buyers were trying to “escape” their contracts. It noted that buyers were ordinary consumers who relied on the developer’s and Monitor’s updates.
5. What Happens to the Deposits?
The Court did not decide deposit refunds in this ruling.
Some deposits were:
Used in construction under deposit insurance
Still held in trust
Potentially recoverable depending on future court decisions
A separate hearing will determine what happens to the money.
6. Why This Case Matters for Presale Buyers
This decision strengthens consumer protection in B.C. presale real estate.
Key takeaways:
1. Developers must keep buyers fully informed.
If something important happens, delays, financial trouble, permit issues, it must be disclosed right away.
2. Buyers have strong rights under REDMA.
If disclosure rules are broken, buyers may not have to complete the purchase.
3. Insolvency does not erase those rights.
Even if a project enters CCAA, REDMA still applies.
4. Courts will protect ordinary consumers.
The judge emphasized that buyers were not sophisticated investors and relied on the information they were given.
7. What This Means If You Are a Presale Buyer
If you purchased a presale unit and believe the developer failed to disclose important information, you may have options:
Your contract may be unenforceable under REDMA
You may be able to seek a return of your deposit
You may not be required to complete the purchase
You may have rights even if the developer is in insolvency proceedings
Every situation is different, so legal advice is essential.
8. Final Thoughts
The Lumina Eclipse decision is an important ruling. It confirms that REDMA’s disclosure rules are not optional and that courts will enforce them, even in complex insolvency situations. For presale buyers, it is a reassuring reminder that the law is designed to protect them when developers fail to provide honest, timely information.
If you have questions about how this decision may affect your rights as a presale purchaser, or if you are navigating a dispute involving REDMA compliance, Queenstone Law would be pleased to assist. Our litigation practice is focused on practical, strategic guidance tailored to your circumstances. You are welcome to contact our office to arrange a consultation and discuss your legal concerns in confidence.
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