VICTORIA — New protections for homebuyers in British Columbia came into effect on Jan. 3 following a B.C Financial Services Authority’s report on consumers in the real estate market.
The province is implementing a rescission period of three business days, referred to as the homebuyer protection period, for buyers to secure financing, home inspections or even back out of a contract, according to a news release.
If a contract is cancelled the buyer must pay 0.25 per cent of the purchase price or $250 on every $100,000 to prevent abuse of the new protections.
“Lack of time for buyers to complete due diligence can exacerbate risk or be used to hide property defects that otherwise may have been discovered,” said Leo Spalteholz, a Victoria-based housing analyst, in the release.
“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.”
The homebuyer protection will be the first of its kind in Canada for resale properties and newly constructed homes.
The protection period will apply to all residential real estate sales including private sales with limited exceptions, states the release.
“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,” said Minister of Finance Katrine Conroy.