BC Homebuyers enter 2023 with new Protection Period legislation in place

New housing under construction
in Prince Rupert in 2022

If your New Year's Resolution includes moving into new digs in 2023, a new piece of legislation on the books in British Columbia could help reduce the stress when it comes to buying a new home.

Tuesday was the launch day for the new Homebuyer Protection Period, the program introduced by the BC NDP Government last year as a way to address some of the exuberance of the realty markets in the leader population centres.

Creating a mandatory three-business-day period to give homebuyers more time to secure financing or arrange home inspections is the first key action the Province is taking following the B.C. Financial Services Authority’s (BCFSA) report on improving consumer protection in the real estate market. 

The extra time will help buyers fully consider whether a purchase is right for them under any market conditions, including in the face of rising interest rates and any high-pressure sales.

British Columbia is the first in Canada to introduce such a protection period, though it's in use in a number of countries around the world.

B.C. will be the first province to implement a homebuyer protection period for resale property and newly constructed homes. 

Similar provisions exist in some international jurisdictions, such as Australia and France. 

 Legally known as the homebuyer rescission period, the protection period applies to all residential real estate sales, including private sales, with limited exceptions. 

Cooling-off periods for pre-construction sales of multi-unit development properties, such as condominiums, are in place under the Real Estate Development and Marketing Act.

The pause before closing the deal, while offering a chance for the buyer to change their mind, does still have a penalty in place for the home seller, should the purchase not move forward.

The homebuyer protection period, also referred to in the industry as the homebuyer recission period, includes a rescission or cancellation fee of 0.25% of the purchase price, or $250 for every $100,000, for those who cancel their contract to help ensure that all parties are taking the transaction seriously. 

For example, if the buyer exercises the right of rescission on a $1-million home, they would be required to pay $2,500 to the seller.

The Legislation from 2022, is part of the NDP government's ongoing approach towards housing issues across the province, with Minister Katrine Conroy noting of the importance of buying a home for British Columbians.

“Housing remains a top concern for people in B.C. and a top priority for this government. Buying a home is one of the biggest decisions of people’s lives. This is an important milestone as we lead the way in protecting people and strengthening public confidence in the real estate market.”

More notes on the Tuesday launch of the program and links to explore it further can be explored here.

Further background on themes from the BC capital can be reviewed through our Legislature archive.

Cross posted from the North Coast Review.