This morning the government announced its plan to introduce a three-day homebuyer protection period effective January 2023.
From the Ministry of Finance announcement:
A new homebuyer protection period will protect people in B.C. looking to buy a home from being pressured into high-risk sales. The period is the first of its kind in Canada and marks the first key action the Province is taking based on the B.C. Financial Services Authority’s (BCFSA) report on ways to offer homebuyers better consumer protection in the real estate market. The mandatory three-day period will give homebuyers an opportunity to take important steps, such as securing financing or arranging home inspections, as they prepare to make one of their biggest financial decisions.
The homebuyer protection period will come into effect on Jan. 1, 2023. It includes a rescission (cancellation) fee of 0.25% of the purchase price, or $250 for every $100,000, for those who choose to back out of a deal. For example, if the purchaser exercises the right of rescission on a $1-million home, they would be required to pay $2,500 to the seller.
Buyers still may make offers conditional on home inspections or financing at any time. The protection period will offer homebuyers the opportunity for due diligence at times when conditions are not in place.
The homebuyer protection period is informed by the results of consultations that the BCFSA completed this year with a wide range of real estate industry stakeholders, including home inspectors, appraisers, realtors, and academics, as well as representatives from the legal and financial services sectors.
The Province will continue studying the BCFSA’s advice and its potential effects to further strengthen public confidence in the real estate market.
Details of the homebuyer protection period are not yet available, but your Board will work on making sure there are opportunities for you to learn about how this period will be implemented and how to prepare for the January 2023 rollout as further information becomes available.
As you know, many VREB Members. your Board, BCREA, and other boards across the province consulted with BCFSA and government stakeholders on consumer protection measures. All of these entities will continue their advocacy as the government moves through the BCFSA's recommendations.