The BCFSA introduced Home Buyer Rescission Period, allowing cancellation of real estate contracts within three business days for a fee of 0.25% of purchase price. Applicable to most residential properties, excluding auctions, court-ordered sales, and leased land. Applies to private sales and FSBO properties, with no option to waive.
Overview of the HBRP
On January 3, 2023, the British Columbia Financial Services Authority (BCFSA) implemented new legislation that introduced the Home Buyer Rescission Period in the province. This legislation provides home buyers with a “cooling-off period” during which they can cancel a real estate contract for a small fee.
The legislation was enacted to help protect buyers that were, in a heated market, often encouraged, or felt it necessary, to write an offer with no subject conditions to the sale. For years the BC market, particularly the Vancouver real estate market, saw buyers foregoing their due diligence and submitting offers well over the list price.
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. This notice must be provided to the seller or the seller’s representative in writing under strict rules.
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.
The HBRP will apply to most residential real estate including detached homes, semi-detached homes, townhouses, apartment, residential strata lots, and mobile homes that are affixed to land. It is important to note that the Home Buyer Rescission Period does not apply to all types of real estate transactions. For instance, it does not apply to purchases made at auctions or court-ordered sales. Additionally, it does not apply to sales of residential property on leased land.
The HBRP applies to all residential real estate sales, which includes private sales and FSBO properties. The HBRP cannot be waived – even if the buyer and seller mutually agree to do so.