Presale buyers bail on condos as valuations plummet — risking $100K deposits and litigation

Here’s what’s actually happening in B.C.’s presale market, why walking away can cost far more than a deposit and what to check before you consider missing your closing date.

Why developers are suing presale buyers

Metro Vancouver developers have filed dozens of lawsuits in recent months against individual presale purchasers in the Supreme Court of British Columbia. Named developers include Zenterra Developments, Dawson + Sawyer, Marcon, Mosaic Homes and Westbank, with two dozen separate lawsuits identified across just five projects.

In each case, a buyer signed a presale agreement, paid a deposit, then didn’t close. The developer resold the unit, in most cases at a lower price than the original contract due to today’s weaker market, and is now suing the original buyer for breach of contract, along with the price difference and, in some cases, carrying costs, remarketing costs and strata fees.

Why walking away can cost more than your deposit

A deposit on a presale contract is typically 10% to 20% of the purchase price, paid well before the building is complete. Losing that deposit feels like the downside case. But under a standard presale purchase agreement, failing to close isn’t just a forfeited deposit — it’s a breach of contract, and the developer can pursue the buyer for the resulting financial loss.

In a hypothetical example, a buyer agrees to pay $900,000 for a presale unit and puts down a $100,000 deposit. By the time the building is finished, the unit appraises at $750,000. If the developer resells at that lower price after the buyer fails to close, the buyer could be sued for the $150,000 shortfall on top of losing the deposit, plus any carrying and resale costs the developer claims.

Why some buyers end up underwater at closing

Presale volumes have collapsed since the market peaked. According to data from MLA Canada, Metro Vancouver had 1,426 presold homes released in July 2021, compared with 572 in July 2025 and just 42 this July. That drop reflects the same price pressure showing up in these lawsuits: Units that made sense to buy years ago may no longer appraise for what buyers agreed to pay.

A mortgage lender finances based on the appraised value of a unit at closing, not the price in the original presale contract. If the appraisal comes in below that contract price, the buyer needs to cover the gap in cash or find another form of financing to close at all.

A bridge loan can help when your closing dates on a sale and purchase don’t line up, but it isn’t a fix for an appraisal shortfall — it only bridges timing, and the amount you can borrow is tied to your existing equity, not the presale price you agreed to.

What to do before you consider missing your closing date

Talk to a real estate lawyer as soon as you suspect you won’t be able to close, not after you’ve already missed the date. Ask your lender early whether the unit will appraise for the contracted price, so you aren’t caught off guard close to completion. Find out if your contract allows for an assignment, an extension or another option short of default. And if a developer does file a claim against you, respond to it — don’t ignore it, since a default judgment can leave you on the hook for the full amount claimed.

Forfeiting a deposit isn’t the end of the story if a presale contract falls through — it can be the opening chapter of a lawsuit. Before you assume you can simply walk away from an underwater presale, get legal and financial advice on what you actually owe, not just what you’ve already paid.