In November of 2021, the BC Government announced its intent to introduce a “cooling off period” for British Columbian home buyers to address concerns with the precipitous pace of sales and price increases in the Lower Mainland housing market.
They then tasked the BC Finacial Services Authority (the “BCFSA”) with researching and drafting a proposal for how to enact said “cooling off period” as best possible. Then, on April 25th, 2022, the BC legislation passed the Property Law Act Amendment enabling the creation of what is now formally known as the Home Buyer Recission Period.
The Home Buyer Recission Period will no be in effect as of January 3rd, 2023. This government regulation allows home buyers in British Columbia the right to release themselves from a Contract of Purchase and Sale - mutually agreed to by themselves and the selling party - without cause and a nominal cost anytime within 3 days of having entered said agreement to purchase real property.
Therefore, should a purchaser change their minds, for any reason, they may relinquish all liability they have to complete the agreed to contract should written notice be properly delivered to the Seller within 3 days of its acceptance time. In employing their right to do so, however, the purchaser will be liable to pay the seller an amount equal to 0.25% of the purchase price agreed to under the Contract of Purchase and Sale.
The intent of this regulation is to protect consumers during these significant financial transactions - particularly when the pace of the real estate market does not allow for great/proper amounts of due diligence and unconditional offers become the “norm” - that have the potential to have significant and long-term consequences on any individual.
This regulation of course as an impact on home sellers as well, which we won’t get into here, though, the BCFSA did take these possible negative impacts of this regulation into consideration when drafting and deciding upon this framework.
There are more specifics involved in the regulation including the types of properties that are excluded and the logistics for payment of compensation to the Seller. If you wish to learn more or have questions as to how this impacts your own position don't hesitate to reach out.
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