The BC Government has created regulations that will enable a mandatory three-day Homebuyer Protection Period (HPP), previously called a “cooling off period,” on January 1, 2023. While BCREA supports enhanced consumer protection measures for real estate consumers, we are extremely disappointed by this announcement. We anticipate that the HPP will not be an effective measure, especially as market conditions are changing and becoming more balanced.
BCREA offered more than thirty alternative recommendations in our paper published in our white paper, “A Better Way Home.” Many of these recommendations aligned with the BC Financial Services Authority’s report, “Enhancing Consumer Protection in BC’s Real Estate Market,” which was published in May.
So far, the Ministry of Finance has ignored these recommendations, only choosing to move forwards with their Homebuyer Protection Period, which was announced before any consultation took place.
The decision to implement an HPP undermines the independence and expertise of BCFSA and is concerning to Realtors and British Columbians. For consumers to truly be protected in a real estate transaction in BC, the government needs to empower BCFSA to conduct its own research on policies’ effectiveness, otherwise, there will continue to be a lack of positive changes to BC’s housing market.
While there remain many unanswered questions, here are the details of the HPP upon the announcement:
- if a deposit is held in trust, brokerages may release it upon rescission
- rescission fee amount is provided to the seller
- the balance (if any) is returned to the buyer, despite what may be provided in the contract.
Exemptions and waivers
The HPP cannot be waived. Narrow exemptions include:
- sales subject to a 21 of the Real Estate Development Marketing Act
- sales of residential real property located on leased land
- sales of leasehold interest in residential real estate
- sales at auction
- sales under a court order or supervision of a court
Defining residential real estate
The policy will apply to the following types of structures:
- detached homes,
- semi-detached homes,
- apartments in a duplex or other multi-unit dwelling,
- residential strata lots,
- manufactured homes that are affixed to land, and
- cooperative interests that include a right of use or occupation of a dwelling.
The HPP does not apply to presale properties already subject to a rescission period under the Real Estate Development Marketing Act.
Requirements to Inform Consumers
Licensees must provide general information on the HPP to all consumers through the Disclosure of Representation in Trading Services (prescribed content).
Service of Notice
Homebuyers must serv rescission notice on the seller in one of the following forms:
- registered mail
- e-mail with read receipt
- Personal service
Rescission Notice Content
Rescission notice must contain:
- address, PID or description of the property
- names and signature of the purchaser
- name of the seller(s)
- date of notice
Licensees must also provide an additional mandatory disclosure at the time of preparing an offer on behalf of presenting an offer to a client, containing the following information:
- the HPP cannot be waived,
- the rescission period,
- dollar amount of the rescission fee,
- deposit handling, and
- HPP exemptions.
Brokerages must retain a copy of a rescission notice that it prepares or receives (enables audit and reporting).
BCREA staff have met with BC Financial Services Authority staff to receive a debrief from them and begin coordinating education resources for licensees. We will continue to collate questions and concerns, bringing them to the Minister of Finance.
BCREA understands the importance of consumer protection measures and continues to support enhancements to real estate transactions. REALTORS® consider consumer protection a top priority in their work with consumers every day, and improving consumer confidence, and trust in their home buying journey is something the profession is constantly working towards.
British Columbia Real Estate Association