The provincial government introduced a homebuyer protection period on July 21, which is outlined in a new regulation. Starting January 1, 2023, the government will enforce this regulation, allowing homebuyers to back out of a residential purchase up to three business days after signing a contract. This three-day cooling off period aims to help homebuyers conduct their due diligence, such as securing financing or arranging home inspections.
Homebuyer Protection Period Basics
Effective Date: January 1, 2023
Buyers have three business days to back out of a residential purchase after signing the contract
Applies to all contracts, regardless of subjects
Mandatory and can't be waived
Rescission fee of 0.25% will be charged to buyers who back out of a contract within the three-day period
The rescission fee is paid to the seller
The enforcement mechanism for the rescission fee and any returned deposits is unclear at this time
Realtors must provide general information on the period to clients through Disclosure of Representation in Trading Services
Deposits
If a deposit is held in trust, brokerages may release it upon rescission
If there's a balance, it will be returned to the buyer, regardless of what's provided in the contract
Exemptions and Waivers
The period can't be waived, but there are narrow exemptions for sales:
Subject to section 21 of the Real Estate Development Marketing Act
Residential real estate located on leased land
Leasehold interest in residential real estate
At auction
Under a court order or supervision of a court
Residential Real Estate Definition
The homebuyer protection period applies to:
Detached homes
Semi-detached homes
Townhouses
Apartments in a duplex, triplex or other multi-unit dwelling
Residential strata lots
Manufactured homes that are affixed to land
Cooperative interests that include a right of use or occupation of a dwelling
Note: This period doesn't apply to presale properties, which are already subject to a rescission period under the Real Estate Development Marketing Act
Notice of Rescission
Homebuyers must serve the rescission notice to the seller through registered mail, fax, email with read receipt, or personal service
The notice must contain the address, PID or description of the property, the names and signatures of the buyer(s), the names of the seller(s), and the date of notice
Additional Disclosure
Realtors must provide an additional mandatory disclosure when presenting an offer to a client, outlining:
That the protection period can't be waived
The rescission period
The dollar amount of the rescission fee
Deposit handling
The homebuyer protection period exemptions
Records Retention
Brokerages must retain a copy of any rescission notices they prepare or receive for auditing and reporting purposes.
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