The Home Buyer Rescission Period – What You Need To Know

The Home Buyer Rescission Period (HBRP) previously known as the Home Buyer Protection Period, is a measure that the BC Financial Services Authority (BCFSA) proposed earlier in May this year, and will be implemented province wide on January 3, 2023.

When the HBRP legislation takes effect, certain purchasers of new homes have the right to cancel or rescind on the purchase of a real estate property within 3 clear business days after an offer has been accepted. It does not matter if the offer is subject free or not. The rescission period applies to all residential real estate sales including for sale by owner and private sales.

Early in any transaction, a real estate agent will provide the client with information about the right to rescission and a Disclosure of Representation in Trading Services form. The real estate broker must also provide the additional mandatory disclosures:

• the rescission period cannot be waived
• the time period of the rescission
• the amount of the rescission fee
• how the deposit will be handled
• any exemptions if required

If the buyer chooses to rescind on the offer within the 3 business days (Monday – Friday, not including week-ends and holidays), the seller must be paid 0.25% of the purchase price. The real estate brokerage must return the deposit to the buyer, less the rescission amount.

It should be noted that should the buyer rescind the contract at anytime during the rescission period, he/she is not required to give the seller the reasons for opting out.

The Right of Rescission period immediately takes effect after 2 steps are completed:

• The purchaser signs a form acknowledging that he/she has read the Disclosure Statement.
• All the terms have been agreed by both parties and the contract of purchase and sale is signed, complete and therefore legally binding.

Properties which the rescission period applies to:

• a detached house
• a semi-detached house
• a townhouse
• an apartment in a duplex or other multi-unit dwelling
• a manufactured home that is affixed to land
• a cooperative interest as defined in Section 1 of the Real Estate Development Marketing Act, that includes a right of occupation of a dwelling

Properties that are excluded from the rescission period:

• residential real property that is located on leased land
• a leasehold interest in residential real property
• residential real property that is sold at auction
• residential real property that is sold under a court order or the supervision of a court
• contracts to which Section 21 of the Real Estate Development Marketing Act applies

If you have any questions regarding this topic or any other from our regular and extensive collection of blog posts, contact us or call us on 604 913 1000.