BCFSA Proposed Home Buyer Protection Measures – Some Of The Significant Proposals Explained
Last fall, the BC government announced that it would introduce measures to calm the province’s red hot housing market. On May 26th of this year, the BC Financial Services Authority (BCFSA) published a list of consumer protection recommendations on how to enact their proposed measures. Notable amongst these were:
- A 3 day cooling off period
- A 5 day pre offer period
3 day cooling off period
This would give the buyer the right to withdraw from a purchase agreement within 3 days after an offer is accepted. Previously, without the cooling off period, the buyer would face significant financial penalties and serious legal ramifications if he or she wanted to terminate the contract for reasons other than laid out within the stipulated terms and conditions. With the cooling off period, the buyer would be subject to a termination fee of 0.1% to 0.5% of the purchase price.
A cooling off period of 7 days is mandatory for pre-sale developments. Buyers have 7 days to withdraw their offer once they have received a copy of the signed purchase contract or acknowledge receiving a disclosure statement. There is no penalty and if there is a deposit paid, the deposit is returned.
5 day pre-offer period
This regulation requires listings to be on the market for a minimum of 5 days before the seller can accept any offers. During this period, the seller needs to ensure that all the relevant documents are available to the buyer, so that the buyer can do the due diligence that is required before buying the property.
An important aspect of this is that all the different buyers can do this at the same time for the same property. This will give all the prospective buyers a fair opportunity to do their own due diligence, knowing that the property will not be available for sale until they had time to do their due diligence.
The BCFSA also recommended that buyers should disclose any offers made on other properties and to discourage buyers from submitting several concurrent offers.
Another recommendation was for the government to continue to explore open bidding to enhance transparency in the transaction process and require standard clauses in the contract of purchase and sale.
All these and other recommendations will be reviewed by the BC government as it develops new real estate legislation.
A copy of the BCFSA 80 page report is available here.
We have been in the real estate business for over 30 years. If you are planning to purchase a new home, or have any real estate related questions, why not get in touch with us for some useful advice? Call us on 604 913 1000, contact us or follow us on Facebook.