Written on July 22, 2023 by Mike Stewart Vancouver Realtor
The BC Home Buyer Rescission Period or HBPR, also known as the “Cooling Off Period,” is a new regulation introduced in British Columbia effective from January 3, 2023. This regulation provides homebuyers with a three-day window to reconsider their decision after signing a contract to purchase residential real estate. If a buyer decides to rescind their offer within this period, they are required to pay a rescission fee of 0.25% of the agreed-upon sale price to the seller.
What is the BC Home Buyer Rescission Period?
The BC Home Buyer Rescission Period, also referred to as the “Cooling Off Period” in BC, is a three-day period during which a buyer can cancel their contract of purchase and sale after an offer is accepted. This period is not waivable by the buyer, and if the buyer decides to rescind their offer within this period, they owe the seller a rescission fee of 0.25% of the agreed-upon sale price.
This “Cooling Off Period” Period begins the next business day after the final acceptance of an offer and lasts for three business days. During this period, homebuyers can legally withdraw from the purchase without justification, albeit at the cost of the rescission fee.
When Does the 3-Day Rescission Period Start?
The three-day period starts the first day after the accepted offer and does not include weekends or recognized holidays. For example, if an offer is accepted on a Wednesday, the 3 -day rescission Period starts on Thursday and ends at 11:59:59 pm on the following Monday, assuming none of these days is a holiday.
How Much is the Rescission Fee for the BC Home Buyer Rescission Period?
The rescission fee for the rescission period for existing homes is 0.25% of the agreed-upon sale price of the home. If the buyer exercises their right of rescission during the HBPR and the buyer has paid a deposit, then the seller will be paid their portion of the rescission fee from the deposit by the holding brokerage before the remainder is returned to the buyer.
What Types of Properties Does the BC Home Buyer Rescission Period Apply To?
The rescission right applies to various types of residential real property, including:
- Detached homes
- Semi-detached homes
- Apartments in a duplex or multi-unit/family dwelling
- Residential strata lots (i.e., condos)
- Manufactured homes that are affixed to land
- Cooperative interests that include a right of use or occupation of a dwelling
What Types of Properties are Exempt from the BC Home Buyer Rescission Period?
Certain properties are exempt from the three-day BC HBPR. These include:
How Does the BC Home Buyer Rescission Period Impact Buyers and Sellers?
For buyers, the 3-day rescission period provides an opportunity to reconsider their decision after signing a contract. This period is particularly beneficial for those who have made a subject-free offer or have a subject removal period of less than three days.
For sellers, the BC HBPR can impact their ability to accept subject-free offers as all buyers will have an automatic right to a three-day rescission period. Some critics argue that the 3 day cooling off period disadvantages sellers and can be abused by buyers who make offers on multiple homes, locking up scarce housing inventory.
Is the 3 Day Cooling Off Period Necessary for the BC Real Estate Market?
It depends who you ask.
For the current provincial government with an eye to winning the next election by saying they are “doing something” about the real estate market in BC, then maybe it is necessary for them. In my professional experience and the experience for the vast majority for our clients, the answer would be no in regards to this is a redundant and unnecessary program.
The 3 day cooling off period has caused confusion for our clients both buyers and sellers (see FAQ’s) as well as increased costs due to heightened uncertainty with home purchases.
Question: What happens if I have subjects on my contract, and don’t remove subjects? Do I still owe the rescission fee?
Answer: No. If you have subjects on a contract (e.g., financing) and are backing out due to not being able to satisfy a condition on a contract, then you do not owe the rescission fee to the seller, even if you are backing out within the three-day rescission period.
Question: How is the rescission fee paid to the seller?
Answer: If the buyer exercises their right of rescission during the 3 day rescission period and the buyer has paid a deposit, then the seller will be paid their portion of the rescission fee from the deposit by the holding brokerage before the remainder is returned to the buyer. If the buyer has not yet paid a deposit, then the buyer is required to pay the rescission amount to the seller promptly, and in any event, within 14 days after the buyer exercises their rescission right.
Question: Can the BC Home Buyer Rescission Period be waived by the buyer?
Answer: No, the British Columbia Home Buyer Rescission Period is not waivable by the buyer. It is an automatic right provided to the buyer to reconsider their decision within three business days after the final acceptance of an offer.
Question: How the is the HBPR different than the 7 Day Rescission Period?
Answer: The BC HBPR is for existing properties and is for 3 days. The 7 Day Rescission period is for presale or new construction homes and is part of REDMA. Please see our article on the difference between the Home Buyer Rescission Period and the 7-day rescission period.
- Buyers should take advantage of the HBPR to conduct due diligence, such as securing financing or arranging home inspections.
- Sellers should be aware of the 3-day rescission period and its potential impact on their ability to accept subject-free offers.
- Buyers should be aware of the rescission fee and ensure they are prepared to pay it if they decide to rescind their offer within the cooling off period
- Both buyers and sellers should consult with their real estate agents to understand the requirements of the BC HBPR.
The BC Home Buyer Rescission Period or “Cooling Off Period” in BC is a significant change in the real estate market. While it provides buyers with a safety net, it also introduces new considerations for both buyers and sellers. As with any major decision, it’s essential to consult with a professional to understand the implications fully.