British Columbia has implemented a cooling-off period on residential real estate transactions to protect home buyers from high-risk transactions. This legislation is the first of its kind in Canada and will come into effect on 01 January 2023. 

This new legislation will allow the home buyer to rescind the contract to purchase by serving a written notice to the property seller within three business days after the initial offer to purchase was signed. 

This legislation will allow the home buyer enough time to do their due diligence before proceeding with the sale, such as home inspections, seeking legal advice, and confirming financing. 

“Too many people have been faced with giving up an inspection in order to buy a home,” B.C. Finance Minister Selina Robinson said. “This is a major step toward providing homebuyers with the peace of mind they deserve while protecting the interests of people selling their homes – for today’s market and in the future.” 

Should buyers wish to rescind their offer to purchase, a penalty would be applicable. The penalty would be calculated at 0.25% of the purchase price, or $250 for every $100 000 on a canceled deal. Therefore, a home selling for $1 000 0000 would incur a $2500 penalty fee. 

This new legislation has been criticized by the British Columbia real estate association, which represents 24 000 real estate agents. 

Trevor Koot, the real estate association’s CEO, said they were very disappointed in the minister’s decision to implement the homebuyer protection period in isolation from other measures. 

“This goes against the advice of the province’s real estate regulator, which - in May - recommended several consumer protection measures to be implemented as a package, not à la carte,” he said. 

Koot felt the government’s decision undermined the expertise and independence of the province’s real estate regulator. 

There have also been questions raised over the time of this, as the housing market has been going through a correction, and this could discourage some sellers, which could further restrict the housing supply. 

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