What is the New Homebuyer Protection Period in British Columbia?
As of Tuesday, January 3, 2023, homebuyers in British Columbia now have additional protection in the real estate market thanks to the implementation of the homebuyer protection period. This mandatory three-business-day period allows homebuyers more time to secure financing or arrange home inspections. It is intended to help buyers fully consider whether a purchase is the right choice for them under any market conditions, including in the face of rising interest rates or high-pressure sales tactics.
The homebuyer protection period also referred to as the homebuyer rescission period includes a cancellation fee of 0.25% of the purchase price, or $250 for every $100,000, for buyers who decide to cancel their contract. This fee is intended to help ensure that all parties take the transaction seriously.
British Columbia is the first province in Canada to implement a homebuyer protection period for both resale properties and newly constructed homes. The rules apply to all residential real estate sales, with limited exceptions.
Leo Spalteholz, a Victoria-based housing analyst, believes these new rules will help protect buyers in high-pressure sales or future overheated markets. "Lack of time for buyers to complete due diligence can exacerbate risk or be used to hide property defects that otherwise may have been discovered," Spalteholz said. "Though the market has cooled dramatically in recent months, it’s good to put buyer protections in place proactively. The rescission period strikes a sensible balance between protecting buyers while the fee should also protect sellers from the frivolous invocation of it.
Department, F. (n.d.). New protections in place for homebuyers in B.C. BC Gov News. https://news.gov.bc.ca/releases/2022FIN0088-001930