British Columbia “Cooling Off” period for home sales

by REBGV

British Columbia Cooling Off Period

On July 21, the provincial government introduced a home buyer protection period, the details of which are outlined in a new regulation that allows home buyers to back out of a residential purchase up to three business days after signing a contract.

The government will begin to enforce this regulation starting January 1, 2023.

The province claims this three-day cooling off period will help ensure all homebuyers have an opportunity to conduct their due diligence, such as securing financing or arranging home inspections.

Key facts

The homebuyer protection period basics

The period will be effective January 1, 2023.
Buyers will have three business days to back out of a residential purchase after signing the contract.
This applies to all contracts, regardless of subjects. We’re asking the government for clarity on what constitutes a “rescission” (cancellation).
The period is mandatory and can’t be waived.
Buyers who back out of a contract within this three-day period will have to pay a rescission fee of 0.25%. For example, if the purchaser exercises the right of rescission on a $1-million home, they’d be required to pay the seller $2,500.
The rescission fee is paid to the seller.
The enforcement mechanism for the rescission fee, and for any deposits that may need to be returned, is unclear at this time.
Realtors must provide general information on the period to all clients through the Disclosure of Representation in Trading Services.

Deposits

If a deposit is held in trust, brokerages may release it upon rescission.
If there’s a balance, it’s returned to the buyer, regardless of what’s provided in the contract

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Author & Credit: REBGV

Photo: REBGV