• Sun. Aug 7th, 2022

British Columbia improves consumer protection for homebuyers

ByWillie M. Evans

Jul 21, 2022

A new homebuyer protection period will prevent people in British Columbia looking to buy a home from being pressured into selling at high risk.

This period is the first of its kind in Canada and marks the first key action the province is taking based on the BC Financial Services Authority’s (BCFSA) report on how to provide homebuyers with better consumer protection on the estate market. The mandatory three-day period will give homebuyers the opportunity to take important steps, such as obtaining financing or arranging home inspections, as they prepare to take one of their most important financial decisions.

“Too many people have had to give up an inspection to buy a house,” said Selina Robinson, Minister of Finance. “This is a major step in providing homebuyers with the peace of mind they deserve while protecting the interests of people selling their homes – for the market of today and tomorrow.”

The Homebuyer Protection Period will take effect on January 1, 2023. It includes a termination (cancellation) fee of 0.25% of the purchase price, or $250 for every $100,000, for those who choose to withdraw from an agreement. For example, if the buyer exercises his rescission right on a $1 million house, he will have to pay $2,500 to the seller.

Buyers can still make offers conditional on home inspection or financing at any time. The protection period will provide homebuyers with the opportunity to exercise due diligence when conditions are not in place.

The homebuyer protection period is informed by the results of consultations the BCFSA conducted this year with a wide range of real estate industry stakeholders, including home inspectors, appraisers, realtors and academics, as well as representatives from the legal and financial services sectors.

The Province will continue to review the BCFSA’s advice and its potential effects to further build public confidence in the real estate market.

Quote:

Blair Morisson, CEO, British Columbia Financial Services Authority –

“Buying and selling a home is the most important financial transaction in most people’s lives. The parameters for implementing a homebuyer protection period, as well as other potential consumer protection enhancements, set out in the BCFSA’s advice to government, are designed to give British Columbians time necessary to exercise due diligence. Our advice is based on consultations with over 140 stakeholders, including industry experts and public interest organizations. We want to promote trust in real estate transactions and our advice is aligned with this outcome. »

Jonathan Sheppard, President, Home Inspectors Association BC –

“Home inspections help eliminate some of the potential costly risks of buying while helping to make an informed decision. Members of the Home Inspectors Association BC are proud that the BC government has recognized these risks and is once again leading the country in consumer protection.

Andy Yan, Urban Planner and City Program Director, Simon Fraser University

“The homebuyer protection period is something that has been around for a long time and is very much needed as a program to modernize the way homes are bought in British Columbia and for the stability, accountability and transparency of the whole market.

Tsur Somerville, ssenior researcher, UBC center for urban economics and real estate

“It is important to balance the interests of buyers and sellers. A key objective is to level the playing field and allow buyers to avoid having to make decisions under unreasonable time pressure. It serves the very important purpose that buyers feel trapped into buying a property without an inspection.

Elaine Spilos, British Columbia Home Buyer –

“The homebuyer protection period ensures that the buyer has time to obtain the information needed to make an informed decision.”

Fast facts:

  • BCFSA is responsible for overseeing and regulating the financial services industry, including real estate professionals, mortgage brokers, insurance, pension plans, trusts, credit unions and Credit Union Deposit Insurance Corporation.
  • British Columbia will be the first province to introduce a homebuyer protection period for resale properties and newly built homes.
  • Cooling off periods for pre-construction sales of multi-unit buildings, such as condominiums, are in place under the Real Estate Development and Marketing Act.

Learn more:

Read the report, Enhancing Consumer Protection in BC’s Real Estate Market, here: https://www.bcfsa.ca/media/2861/download