Risk-Sharing or Red Flag? Surrey Developer Pitches Buy-Back and Rent-Out Safety Net for Presale Buyers

WestStone Group tells purchasers at its new “King George Parc” towers they can cash out at today’s price—or hand the keys over to the developer and become renters—if market values slide before completion.

The Offer at a Glance

• Project: King George Parc, three-tower, 1,150-unit community one block from King George SkyTrain

• Completion target: Phase 1 delivers Q4 2027

• Clause: After firming a presale, buyers may

  1. Sell the contract back to WestStone at the original purchase price, minus realtor commissions and legal fees, or

  2. Close on schedule but rent the unit back to WestStone at fixed market rent for three years, with an option to repurchase at original price plus 8 % lift
     
     

• Opt-in deadline: Within 14 days of contract signing

• Fee: Non-refundable $6,000 administration charge to activate the clause

WestStone president Aman Johal calls it a “market-risk handshake.” Critics call it a marketing gimmick that still favours the builder.

Why WestStone Is Doing This

Presale Market Has Stalled

• Fraser Valley Real Estate Board reports presale absorption below 30 % for concrete towers in 2025—down from 75 % in 2021.

• Mortgage rates hover near 6 %; investor demand evaporated with the foreign-buyer ban.

Lenders Demand 60 % Presale Threshold

Project financing from a three-bank syndicate (led by RBC) requires 60 % of Phase 1 units presold before initial draw. Adding a buy-back clause widens the funnel of hesitant buyers.

Managing Reputation

Developers burned by 2008’s “Sun Tower” price guarantees recall class-action nightmares. WestStone’s contract, lawyers say, is tighter: compensation is capped; buyer must sign a statutory declaration of no flip intent.

Fine Print and Caveats

Real-estate litigator Paul Mendes warns: “It’s still the buyer’s job to read 130 pages of disclosure.”

Analogues and Precedent

• 2010: Intracorp’s “Equinox Guarantee” in Metrotown offered 15 % price-drop refund; only nine buyers exercised.

• 2014: Richmond developer cancelled project after offering “value-protection”; buyers sued, won 2 % deposit interest.

• 2022: Melbourne builder’s “Rent Back to Us” scheme saw 40 % uptake when Aussie rates spiked.

WestStone’s blend of buy-back and rent-back appears unique in Metro Vancouver.

Industry Reaction

Developers

Competitors privately praise the marketing spin, but doubt the math if 20 % of buyers trigger. “Margins are 12–15 %. A 10 % buy-back hit wipes profit,” says one CFO.

Brokers

Presale agents at rennie marketing expect clause to “unlock first-time buyers frozen by fear.”

Bankers

Lenders insist buy-backs must be escrow-funded; WestStone will post a 5 % performance bond.

Risk Calculus for Buyers

Scenario A: Market falls 15 %. Buyer triggers buy-back, recoups deposit less fees; rents elsewhere.
Scenario B: Market flat. Buyer rents unit to developer at $3,000/mo; three years later, repurchases for 8 % more—effectively paying same as presale price after netting rent.
Scenario C: Market rises 25 %. Buyer does nothing; closes, sells in assignment market for upside.

UBC Sauder modelling shows break-even occurs at ~10 % price drop if buyer elects buy-back.

Legal and Regulatory Eyes

• BC Financial Services Authority confirms clause complies with REDMA if highlighted conspicuously.

• Homeowner Protection Act warranty coverage unaffected.

• Canada Mortgage & Housing Corp. says end mortgage-insurance eligibility will hinge on final appraisal, not presale price.

Consumer Protection BC reminds buyers the clause doesn’t supersede rescission-period rights.

Can the Developer Afford It?

WestStone’s equity partner—Singapore-based Lumen Capital—brings a $120 million mezzanine slice. Insiders say $15 million is sequestered in a buy-back reserve. If more than 100 units hit the trigger, WestStone can stagger repurchases over 18 months.

Worst-case loan covenants let banks convert unsold inventory to rentals, securitizing cashflow—essentially turning King George Parc into a REIT asset.

Broader Market Implications

If WestStone’s gambit spikes sales, expect copycats—especially along Surrey’s 104 Ave corridor where 4 000 presale units languish. But consumer-confidence optics cut both ways: guarantees may also telegraph the developer’s fear of price declines.

Bottom Line

WestStone’s buy-back/rent-back hybrid hands jittery buyers an escape hatch—but only if they navigate stiff conditions. For a market on price-correction watch, it might be the sweetener that restarts Surrey’s presale engine. Or it might be remembered as a clever headline hiding a lopsided ledger.

Either way, the clause signals a clear shift: risk once dumped entirely on buyers is now being shared—at a cost—by builders desperate to keep cranes in the sky.