3-day cooling-off period for B.C. home purchases now in effect

Those who are buying a home in British Columbia now have more protections as a mandatory three-day cooling-off period is now in effect before a sale can go through.

As of Tuesday, the homebuyer protection period, or rescission period, is in effect for home purchases in B.C. It creates a mandatory time frame of three business days to allow buyers to do things like secure financing or arrange inspections.

“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,” the province said in a release.

The period was mandated by the provincial government in 2022 after it was recommended by the BC Financial Services Authority (BCFRA) in a report aimed at helping out homebuyers. The report came as the province’s real estate market was seeing record highs for home sales.

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B.C. Finance Minister Katrine Conroy says the new protections come as housing is increasingly a top priority for many.

“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,” she said.

In an effort to “ensure all parties are taking the transaction seriously,” the homebuyer protection period also includes a financial penalty if the purchase is cancelled. The fee is 0.25 per cent of the purchase price of the home. If a home sells for $1 million, for example, the buyer would have to pay the seller $2,500 if the purchase falls through.

Victoria-based housing analyst Leo Spalteholz says prior to these protections, buyers didn’t have enough time to complete due diligence before completing the purchase of a home.

“Though the market has cooled dramatically in recent months, it’s good to proactively put buyer protections in place. The rescission period strikes a sensible balance between protecting buyers while the fee should protect sellers from frivolous invocation of it,” he said.

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When the period was announced last year, the BC Real Estate Association expressed disappointment in the mandate, saying the province should have implemented more of the recommendations outlined in the BCFRA report.

The cooling-off period will apply to all residential real estate sales in B.C.

-With files from Martin MacMahon