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“Cooling off period” comes to a cold market

January 4, 2023

Despite a swiftly cooling housing market in British Columbia—with sales down about 50 per cent from a year ago and it now taking weeks for an average home to sell—the provincial government has introduced a “cooling off period” for homebuyers.
New B.C. legislation, the Home Buyer Rescission Period (HBRP), came into effect January 1, 2023. It allows buyers three business days to back out of a purchase contract for residential real estate.
Opting out doesn’t require a reason, but it does come at a price. Should a buyer exercise the right to rescind a contract, he or she must pay the seller 0.25 per cent of the purchase price.
As an example, if a buyer were to rescind a contract on a $750,000 home, they would be obligated to pay the seller $1,875.
If an offer is collapsed, the rescission fee is payable to the seller. If there is already a deposit held in trust with a lawyer or notary, the fee will be deducted and paid to the seller before the deposit is returned to the buyer.
Realtors must provide information to their clients about the HBRP by way of a specific form that needs to be included in their contracts. HBRP cannot be waived—even by mutual agreement.
There are exemptions to the legislation, however, including:

HBRP also applies to private sales. More information is available through the BC Financial Services Authority’s HBRP frequently asked questions website.


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