Important changes have come to the BC residential housing market
The province’s Home Buyer Rescission period came into effect on January 3rd, 2023.
As of midnight following the acceptance of an offer, homebuyers will have 3 days to back out of an offer if they can’t secure financing or arrange a home inspection – or even if they just get cold feet. In fact, there is no “reason” that the homebuyers need to provide to walk away from the deal.
The government says it will give buyers some protection in the face of rising interest rates and what it calls high-pressure sales tactics.
This policy will run separately from a subject period if there is one. It may not be waived or negotiated on any residential real estate purchase, despite what is included in the contract.
In an effort to combat that strategy, the province has included a financial penalty for people who walk away from a deal. If a buyer backs out, they will have to pay the seller a cancellation fee of 0.25 percent. On a million-dollar offer, that adds up to a penalty of $2,500.
If the homebuyer does not pay this money, it may be up to the seller to take legal action to receive what is owed to them. This has caused some criticism and is another reason to ensure your Realtor knows how to handle deposit instructions and properly protect you in your transaction.
As mentioned above, there are some exemptions to this policy which include:
- Subject to section 21 of the Real Estate Development act
- Residential real estate on leased land
- leasehold interest in residential real estate2
- At auction
- Under a court order or supervision of the court
Want to know more about this policy and how it will impact your properties? Let’s chat!