Update: Court Rules 39 Eclipse Presale Contracts Unenforceable — What the Decision Actually Decided

by Debbie Evans

Update: Court Rules 39 Eclipse Presale Contracts Unenforceable — What the Decision Actually Decided

Housing Policy & Market Analysis · September 2026 · Debbie Evans, REALTOR® — westvanliving.ca

Back in July, I wrote about a court case at Burnaby's Eclipse condo tower that I said was worth watching regardless of how it turned out, because the legal question at its core touches every presale contract signed in BC. That ruling has now come down. If you haven't read the original piece, start here for the full background — this post picks up exactly where that one left off.

On August 25, 2026, BC Supreme Court Justice David M. Masuhara ruled that 39 presale agreements at Eclipse — worth approximately $30.5 million — are unenforceable. The buyers who applied to void their contracts won on the central argument: that developer Thind Properties breached the Real Estate Development Marketing Act (REDMA) by failing to disclose material facts about the project's financial trouble.

Presale contracts ruled unenforceable

$30.5M

Combined value of the voided purchase contracts

~$3.6M

Deposits tied to those contracts — fate still undetermined

How the Paramountcy Question Actually Landed

This is the detail worth understanding precisely, because it's easy to overstate. The central legal question in the original case was whether federal insolvency law (the CCAA) overrides BC's provincial disclosure obligations (REDMA) once a developer is under creditor protection.

Justice Masuhara's ruling didn't resolve that question broadly in favour of provincial law. What he found was narrower and more specific: the REDMA breaches — the undisclosed warranty suspension, the building permit suspension, and the underlying financial distress — occurred before Thind entered CCAA protection in January 2025. Because the disclosure failures predated the insolvency filing, the provincial obligation applied on its own terms and wasn't displaced by the later federal proceeding.

Why This Distinction Matters

This is not a ruling that REDMA always overrides the CCAA, or that presale buyers can void contracts simply because a developer later becomes insolvent. It's a ruling that a developer's disclosure failures occurring before insolvency proceedings begin remain actionable under provincial law, even after CCAA protection starts. Future cases with different timing — where the alleged non-disclosure happens during or after the insolvency filing — may not be decided the same way.

In his written decision, Justice Masuhara noted the application came "against a backdrop of significant changes in the Greater Vancouver residential condominium market and financial stress in the real estate development sector" — an acknowledgment that this case isn't happening in isolation from the broader conditions I've been covering all year.

What's Still Unresolved

The ruling addresses contract enforceability — it does not yet resolve what happens to the money. The roughly $3.6 million in deposits tied to the 39 voided contracts remains, as one outlet put it, "in limbo." How and when those buyers get their deposits back, and where they land in priority relative to KingSett Mortgage Corporation and other secured creditors in the CCAA proceeding, is a separate question the court will need to address.

It's also worth noting the scale of who this affects. Of Eclipse's 329 units, 232 were sold to third-party buyers, and roughly 70% of those presale contracts had already closed by the time of the ruling. The 39 voided contracts represent a minority of the building's presale purchasers — this is a significant decision, but not one that unwound the entire project.

What This Means Going Forward

For current presale contract holders: if you're relying on a disclosure argument similar to this case, the timing of when the developer's problems occurred — and when they should have disclosed them — matters enormously to how a court will treat your situation.
For prospective presale buyers: this ruling reinforces that a developer's litigation, lien, and financial history is discoverable and worth checking before you sign, not after. It also confirms courts are willing to hold developers to REDMA's disclosure obligations even years after a contract is signed.
For the industry generally: expect developers and their counsel to tighten disclosure practices and timing going forward, and expect lenders underwriting presale-financed projects to price in this kind of legal exposure more explicitly.

This is likely not the final word — decisions of this kind are frequently appealed, and the deposit-priority question remains open. I'll continue to flag developments here as they happen, the same way I said I would in July.

Frequently Asked Questions

Does this ruling mean all Eclipse presale buyers can void their contracts?

No. The ruling applies specifically to the 39 contracts before the court, worth approximately $30.5 million. The majority of Eclipse's presale contracts had already closed by the time of the ruling and are not affected.

Does this mean REDMA now overrides the CCAA in every case?

No, and this is the most important nuance to understand. The ruling turned on timing: the developer's disclosure failures occurred before creditor protection began, which is why the provincial obligation applied. A case involving alleged non-disclosure during or after CCAA proceedings could be decided differently.

Will affected buyers get their deposits back?

That hasn't been decided yet. The ruling addresses whether the contracts are enforceable, not how or when deposits get returned, or where those claims rank against secured creditors like KingSett Mortgage Corporation in the insolvency proceeding.

Is this ruling final?

As of this writing, there's no confirmation of an appeal, but decisions of this significance are frequently appealed. I'll update this post if that changes.

Sources

Business in Vancouver — "B.C. judge rules $30.5M in Burnaby condo pre-sales 'unenforceable'", August 2026.
CBC News — "Pre-sale purchasers in troubled Lower Mainland condo tower win battle to declare contracts invalid", August 2026.
CBC News — "Consumer vs creditor: B.C. condo court battle to focus on rights of pre-sale purchasers", June 2026.
West Vancouver Living — "Dozens of Presale Buyers Are Fighting to Void Their Contracts: Inside the Eclipse Court Case", July 2026 (original coverage).

Debbie Evans | REALTOR®

eXp Realty | West Vancouver, North Vancouver, Vancouver, Squamish & Whistler

If you're currently holding a presale contract and want a second set of eyes on your disclosure statement, or you're considering a presale purchase and want help checking a developer's litigation and lien history before you sign, I'm glad to help.

westvanliving.ca

This content is for informational purposes only and does not constitute legal advice. The ruling discussed remains subject to potential appeal, and the priority and timing of deposit returns has not yet been determined. Buyers with questions about their own presale contract should consult a real estate lawyer. All figures are sourced from the publicly available reporting listed above, current as of September 5, 2026.