How the Home Buyer Rescission Period works and may affect you
As of January 3, the Home Buyer Rescission Period (HBRP) is now in effect for residential real estate transactions in BC.
Introduced by the provincial government as a consumer-protection measure, the HBRP, also known as the "cooling-off period," gives home buyers the opportunity to make certain a real estate purchase is right for them.
Here’s what it is, how it works and what kinds of properties it impacts.
What is the HBRP or "home buyer protection period"?
HBRP gives buyers the right to rescind their offer up to three business days after its acceptance. This mandatory three-business-day period does not include Saturdays, Sundays or holidays. The rescission period begins the next full business day after the acceptance of an offer. For example, if an offer is accepted on a Monday afternoon, the rescission period starts on Tuesday and ends at 11:59 p.m. on Thursday.
If a buyer chooses to rescind his or her offer, they must pay a cancellation fee of 0.25% of the purchase price ($250 on every $100,000).
The rescission fee can be collected a couple of different ways. If a deposit is put in right after acceptance of the offer and the offer is then rescinded, the money owing to the seller comes out of the deposit when it is returned. If a buyer has not yet put in a deposit, then they must pay the seller directly.
The rescission period occurs whether or not a licensed realtor is involved and cannot be waived by either the buyer or seller.
A rescission can be made for any reason within that three-day period. Your licensed realtor or the BC B.C. Financial Services Authority’s (BCFSA) can provide you with information on how the cancellation notice may be given.
What residential properties does the HBRP impact?
The real estate properties affected by this new legislation are:
- a detached house;
- a semi-detached house;
- a townhouse;
- an apartment in a duplex or multi-unit building;
- a residential strata lot;
- a manufactured home affixed to land;
- a cooperative interest that includes a right of use or occupation of a dwelling.
The HBRP does not apply to the following:
- residential real property located on leased land;
- residential real property sold at an auction;
- residential real property sold under a court order;
- a leasehold interest in residential real property.
The BC Real Estate Association has created a video that gives a general overview of the HBRP; you can see it by clicking here.