The British Columbia Financial Services Authority’s (BCFSA) report on improving consumer protection in the real estate market has brought about a new mandatory three-business-day Homebuyer Rescission Period. It took effect on Tuesday, Jan. 3, 2023. It’s aim is to provide buyers with time to consider their purchase and alleviate pressure to make quick decisions around purchasing certain types of residential real estate. The rescission period begins the day after the offer is accepted and includes a cancellation fee. The fee was included to prevent buyers from making offers frivolously.
The 0.25% fee is calculated on the property value. This means $250 will be charged for every $100,000 of the purchase amount to cancel an agreement. For example, if someone cancels their offer to purchase a $1,000,000 property, $2,500 would be due if the they end the contract during the rescission period.
Properties subject to this rule include:
- Detached houses
- Semi-detached houses
- Townhouses Apartments in duplexes or other multi-unit dwellings
- Residential strata lots, as defined in Section 1(1) of the Strata Property Act
- Manufactured homes affixed to land Cooperative interests, as defined in Section 1 of the Real Estate Development Marketing Act, that include a right of use or occupation of a dwelling.
Exemptions include:
- Residential real property that is located on leased land
- A leasehold interest in residential real property;
- Residential real property that is sold at auction; and
- Residential real property that is sold under a court order or the supervision of a court.
B.C. is the first province to introduce this type of legislation. Australia and France have similar rules around purchasing property.
For more information about the HBRP visit:
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