Understanding the Home Buyer Rescission Period in British Columbia
How the Home Buyer Rescission Period Protects You in BC Real Estate Transactions
Buying a home is a significant financial commitment, and sometimes, decisions made in the heat of the moment can lead to buyer’s remorse. Recognizing this, British Columbia has implemented a Home Buyer Rescission Period (“HBRP”) to offer buyers a safety net. Here’s what you need to know about this essential protection mechanism.
What is the Home Buyer Rescission Period?
The HBRP, often referred to as a “cooling-off period,” is a statutory timeframe during which home buyers can back out of a purchase agreement without incurring severe penalties. This period aims to give buyers the chance to reconsider their decision, seek additional advice, or conduct further due diligence. Further, parties to a real estate transaction cannot waive the right to rescind within the HBRP.
Key Features of the Home Buyer Rescission Period
- Duration: The HBRP lasts for three business days. This period begins the day after the buyer’s offer is accepted by the seller.
- Scope: The HBRP applies to most residential real estate transactions, including detached homes, townhouses, apartments and condominiums. However, the HBRP does not apply to transactions of real property on leased lands, leasehold interests, property sold at auction, property sold under a court order or the supervision of the court, or property under section 21 of the Real Estate Development and Marketing Act. Further, the HBRP does not provide the right to rescind once title of the property has been transferred from the seller to the buyer.
- Notice Requirement: If a buyer decides to rescind their offer, they must notify the seller in writing within the rescission period. The notice must include the identification of the property, the buyer’s name and signature, the seller’s name, and the date that the right of rescission is being exercised.
- Costs: Exercising the right to rescind is not entirely free. Buyers who rescind their accepted offer are required to pay the seller 0.25% of the agreed-upon purchase price. If a deposit has been paid, this amount can be paid from the deposit, with the remainder of the deposit to be returned to the buyer. This payment helps compensate the seller for the inconvenience and potential loss of opportunity.
The HBRP is a crucial consumer protection measure. It provides buyers with the time to conduct thorough inspections, secure financing, seek professional advice, and avoid impulsive decisions.
If you are considering purchasing a new residence, visit our FAQ page for definitions, and explore our blogs on real estate law or homeowner liability. Additionally, contact us for assistance in updating your will and trust after your new purchase. For more information, check out our Wills & Estate Law blogs.