Are you in the market to purchase a new home? Did you know that as of January 3, 2023, the British Columbia (B.C.) government implemented the Home Buyer Rescission Period (HBRP) for residential real estate transactions? This cooling-off period gives homebuyers up to three business days to rescind an offer on a home after the offer has been accepted.
Who Is Eligible for the HBRP?
Not all properties are included in the HBRP legislation. The rescission period applies to the following types of residential properties:
- A detached house;
- A semi-detached house;
- A townhouse;
- An apartment in a duplex or other multi-unit dwelling;
- A residential strata lot, as defined in Section 1(1) of the Strata Property Act;
- A manufactured home that is affixed to land; and
- A cooperative interest, as defined in Section 1 of the Real Estate Development Marketing Act, that includes a right of use or occupation of a dwelling.
The following property types are excluded from the HBRP:
- Residential property that is located on leased land;
- A leasehold interest in residential property;
- Residential property that is sold at auction; and
- Residential property that is sold under a court order or the supervision of a court.
Important Information for Buyers
If you’re a buyer, you have the right to rescind a home offer within three business days after the offer is accepted, regardless of whether a real estate licensee is involved in the transaction. The three-day rescission period excludes weekends and holidays.
Only buyers can rescind a contract under the HBRP. If you choose to rescind your offer, you must notify the seller in writing before the rescission period expires and pay the seller a rescission fee. The rescission fee is 0.25% of the offer price.
Important Information for Sellers
The right to rescission cannot be waived by the buyer or the seller. The seller will receive a disclosure of the buyer’s right of rescission when an offer is made. The disclosure may be on a separate form, or included in the Contract of Purchase and Sale.
If a buyer chooses to rescind their offer and their brokerage is not holding the deposit, the seller is advised to seek legal advice for options on how to pursue the buyer for money owed.
Buyers do not need to provide a reason to sellers if they choose to rescind the contract.
What Is the Purpose of the HBRP?
The HBRP gives buyers a chance to change their minds after making an offer on a property without incurring penalties. The cooling-off period is intended to provide buyers with some time to review their decision, seek legal advice, or confirm financing arrangements.
The HBRP is also a measure that aims to promote transparency and protect consumers. It gives buyers the opportunity to reconsider their offer, and it also ensures that sellers are aware of buyers’ rights to rescind their offer. This measure promotes fair and ethical practices in the real estate industry.
The Home Buyer Rescission Period is a welcome change for residential real estate transactions in British Columbia. It gives buyers some breathing room to reconsider their offer and protect their interests without the risk of incurring penalties. As a buyer, it is essential to understand your rights and obligations under the HBRP, and to seek legal advice if necessary. As a seller, it is crucial to disclose the HBRP to potential buyers and seek legal advice if a buyer rescinds their offer. The HBRP promotes fairness and transparency in the real estate industry, and it is a measure that benefits both buyers and sellers.