UPDATE: BC’s Home Buyer Rescission Period: Your Questions Answered
CATEGORY: Advocacy Standard Forms
TAGS: A Better Way Home BCFSA Consumer Protection Cooling Off Period Home Buyer Rescission Period Homebuyer Protection Period Real Estate Practice
The Home Buyer Rescission Period (HBRP), previously known as “Homebuyer Protection Period” and “cooling-off period,” is expected to be implemented province-wide on January 3, 2023. With many details yet to be determined by the BC Government, we have been hearing from REALTORS® with questions. In this post we answer some of those questions.
New or revised questions will be positioned at the top of this page.
What is the Home Buyer Rescission Period (HBRP)?
The HBRP, commonly known as a "rescission period," gives buyers the right to withdraw from a purchase agreement within a specified period of time after an offer is accepted. Without a rescission period, if a buyer wishes to terminate an unconditional contract, they would need to negotiate with the seller and would typically face significant financial penalties or legal ramifications.
What properties will be subject to the HBRP?
The policy will apply to the following types of structures:
- detached homes,
- semi-detached homes,
- apartments in a duplex or other multi-unit dwellings,
- residential strata lots,
- manufactured homes that are affixed to land, and
- cooperative interests that include a right of use or occupation of a dwelling.
What changes will be made to Standard Forms?
Changes to Standard Forms have been made to enhance REALTOR® effectiveness. The 2023 Regulatory Changes and Standard Forms launch page is available here (BCREA Access login required).
How can I learn more about the HBRP’s details when they are available?
More resources on the Home Buyer Recission Period include:
- November slide deck from the BC Financial Services Authority on the Home Buyer Rescission Period,
- information for licensees,
- guidelines for licensees, and
- consumer guide.
You can follow BCREA’s advocacy news, which will include updates on the HPRP, by subscribing to our Advocacy Update. To do so, please email [email protected].
How can I take BCREA’s Home Buyer Recission Period course?
BCREA will be launching The Home Buyer Rescission Period: What REALTORS® course on December 1, 2022 to assist REALTORS® understand and apply the new rules.
How much is the rescission fee?
Buyers who exercise their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller.
To help you calculate the rescission fee, BCREA will launch two HBRP calculators, which will be available on BCREA Access.
What is meant by “three business days?”
The HBRP provides that the buyer must exercise their rescission right within three clear business days. Business days do not include Saturdays, Sundays or holidays. Holidays are defined within the Interpretation Act to include:
- Christmas Day
- December 26
- Family Day
- Good Friday
- Easter Monday
- Victoria Day
- Canada Day
- British Columbia Day
- Labour Day
- National Truth and Reconciliation Day
- Remembrance Day, and
- New Year’s Day
In addition, a day set by the federal or provincial government, such as a day of mourning or celebration, is considered a public holiday.
What are REALTORS®’ requirements to inform their clients?
All real estate licensees must provide general information on the HBRP to all consumers through a form approved by the Superintendent. Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of, or presenting an offer to a client, containing all of the following notices:
- that the HBRP cannot be waived,
- the rescission period time length,
- the dollar amount of the rescission fee,
- the deposit handling, and
Are brokerages required to retain a copy of a rescission notice?
Yes, brokerages are required to retain copies of notices of rescission that are prepared by or on behalf of a brokerage and served on a seller. Brokerages are also required to retain copies of rescission notices that are received by the brokerage.
How are sellers supposed to receive rescission notice?
Buyers must serve rescission notice to the seller through registered mail, fax, an email with a read receipt or personal service. Rescission notices must contain:
- the address, PID or description of the property,
- the names and signatures of the buyer(s),
- the names of the seller(s), and
- a date of notice.
How does a HBRP impact other subjects in my contract?
Other subjects are unaffected by the HBRP.
What about For Sale by Owner (FSBO) properties?
The HBRP applies to all residential real estate sales, which includes private sales and FSBO properties.
Can the HBRP be waived?
No, the HBRP cannot be waived.
Are there any exemptions?
There are narrow exemptions, including:
- sales of residential real property located on leased land,
- sales of leasehold interest in residential real estate,
- sales at auction,
- sales by way of an Assignment of Contract,
- pre-construction sales of multi-unit development properties, which are already subject to a seven-day rescission period, and
- sales under a court order of supervision of a court.
Will the rescission fee be taken from the deposit?
If a deposit is held in trust, brokerages must release the rescission fee to the seller upon rescission. The balance, if any, is returned to the buyer, despite what may be provided in the contract.
Who will receive the rescission fee?
The rescission fee amount is provided to the seller
Will the Ministry of Finance implement additional consumer protection measures?
In May, BC’s real estate regulator, the BC Financial Services Authority, published an independent report, “Enhancing Consumer Protection in BC’s Real Estate Market” which offered advice and recommendations to the Ministry of Finance to improve consumer protection. There was significant overlap between BCFSA’s advice and BCREA’s “A Better Way Home” paper.
The Ministry of Finance has not indicated whether they will implement additional consumer protection measures within the coming months.
What policies do BCREA recommend to improve consumer protection?
Earlier this year, BCREA published a white paper, “A Better Way Home,” which included more than thirty recommendations to improve consumer protection. BCREA does not support a Home Buyer Rescission Period (HBRP), because it is not likely to have a meaningful impact on consumer protection and may have unintended consequences on affordability.
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