THE LAW IS CHANGING, KNOW YOUR RIGHTS AS A BUYER AND A SELLER, HOW THIS EFFECTS YOU
The Home Buyer Rescission Period or “HRBP” comes into effect January 1, 2023 as per the Property Law Act. This has been commonly called the "Cooling Off Period".
WHERE DOES THE FEE GO?
The fee, should the buyer choose to exercise the right to rescind their offer is .25% of the purchase price, and the fee goes to the seller of the property. For example .25% on a property listed at $500,000 is $1,250.00.
HOW DOES THE FEE GET PAID TO THE SELLER?
If you, as a buyer, have paid deposit upon acceptance of your offer, and you exercise your right of rescission within the allowable period the real estate brokerage will pay the 0.25% rescission fee to the seller out of your deposit funds and return the remaining deposit to you, the buyer.
If you have not provided a deposit with your accepted offer, you will need to pay the seller the required rescission fee directly or to your REALTOR® who may deliver the funds directly to the seller or the seller’s representative. Alternatively, you are able to provide the fee directly to the seller as well. If you fail to pay the rescission fee, the seller can file to recover the funds through the courts.
WHEN DOES THE RESCISSION PERIOD START AND END?
The period begins the next full business day after an offer is accepted. The rescission period does not begin after subject removal. Subject removal and the rescission period are 2 different things. If your offer is accepted on a Monday, for example, the period starts being counted as day 1 (Tuesday), day 2 (Wednesday) and day 3 (Thursday) ending at 11:59 pm.
IF THE BUYER CHOOSES TO RESCIND THEIR OFFER, HOW DOES THE NOTIFICATION HAPPEN?
If you choose to rescind your offer to purchase within the rescission period, you or your REALTOR® (on your behalf) must serve notice in one of the following ways:
• By registered mail to the seller’s address that is set out in the contract of purchase and sale;
• By fax to the seller’s fax number that is set out in the contract; or
• By email, with a requested read receipt, to the seller’s email address that is set out in the contract.
The rescission notice must include the following:
• The address, the parcel identifier (PID) or a description of the property;
• The name, and the signature or electronic signature, of the purchaser who is exercising the right of rescission;
• The name of each seller who is a party to the contract; and
• The date that the right of rescission is being exercised.
Many consumers do not wish to include their personal email or phone number on the contract of purchase and sale, and instead, the REALTOR® will include their information. Because notice can be sent to the email address provided in the Contract of Purchase and Sale, your REALTOR® can accept service (for a seller) or serve notice (for a buyer) on your behalf.
THE RESCISSION PERIOD DOES NOT APPLY TO ALL PROPERTY
The types of residential real estate property that are subject to the legislation are as follows:
• A detached house;
• A semi-detached house;
• A townhouse;
• An apartment in a duplex or other multi-unit dwelling;
• A residential strata lot, as defined in Section 1(1) of the Strata Property Act;
• A manufactured home that is affixed to land; and
• A cooperative interest, as defined in Section 1 of the Real Estate Development Marketing Act, that includes a right of use or occupation of a dwelling.
ARE THERE ANY EXEMPTIONS TO THE HBRP?
The following types of properties are excluded from the legislation and the rescission period does not apply:
• Residential real property that is located on leased land;
• A leasehold interest in residential real property;
• Residential real property that is sold at auction; and
• Residential real property that is sold under a court order or the supervision of a court.
The HBRP also does not apply to any purchase and sale of property under the Real Estate Development and Marketing Act (“REDMA”) where Section 21 applies.
HOW YOUR REALTOR® HELPS
As your REALTOR®, we are required to make two disclosures regarding the HBRP Regulation. The first disclosure is made on the “Disclosure of Representation in Trading Services” Form which includes information for consumers on the HBRP Regulation at the outset of our agency relationship. When you are represented by us as your REALTOR®, we will also make a second disclosure at the time we prepare an offer on your behalf or present an offer to you.
This disclosure will include the following:
• The fact that the right of rescission cannot be waived;
• The period during which the buyer may exercise their rescission rights;
• The calculation of the dollar amount that the buyer must pay to the seller;
• The requirement to return to the buyer the remainder of the deposit (if one is being held); and
• The exemptions to the right of rescission.
As professional REALTORS® we work to protect your interests.
The Home Buyer Rescission Period or “HRBP” comes into effect January 1, 2023 as per the Property Law Act. This has been commonly called the "Cooling Off Period".
This change in legislation provides buyers with an opportunity to rescind or take back their offer to purchase certain types of residential real estate up to three business days after an offer is accepted. However, if a buyer chooses to rescind their contract within this time frame there is a financial penalty.
WHERE DOES THE FEE GO?
The fee, should the buyer choose to exercise the right to rescind their offer is .25% of the purchase price, and the fee goes to the seller of the property. For example .25% on a property listed at $500,000 is $1,250.00.
HOW DOES THE FEE GET PAID TO THE SELLER?
If you, as a buyer, have paid deposit upon acceptance of your offer, and you exercise your right of rescission within the allowable period the real estate brokerage will pay the 0.25% rescission fee to the seller out of your deposit funds and return the remaining deposit to you, the buyer.
If you have not provided a deposit with your accepted offer, you will need to pay the seller the required rescission fee directly or to your REALTOR® who may deliver the funds directly to the seller or the seller’s representative. Alternatively, you are able to provide the fee directly to the seller as well. If you fail to pay the rescission fee, the seller can file to recover the funds through the courts.
WHEN DOES THE RESCISSION PERIOD START AND END?
The period begins the next full business day after an offer is accepted. The rescission period does not begin after subject removal. Subject removal and the rescission period are 2 different things. If your offer is accepted on a Monday, for example, the period starts being counted as day 1 (Tuesday), day 2 (Wednesday) and day 3 (Thursday) ending at 11:59 pm.
IF THE BUYER CHOOSES TO RESCIND THEIR OFFER, HOW DOES THE NOTIFICATION HAPPEN?
If you choose to rescind your offer to purchase within the rescission period, you or your REALTOR® (on your behalf) must serve notice in one of the following ways:
• By registered mail to the seller’s address that is set out in the contract of purchase and sale;
• By fax to the seller’s fax number that is set out in the contract; or
• By email, with a requested read receipt, to the seller’s email address that is set out in the contract.
The rescission notice must include the following:
• The address, the parcel identifier (PID) or a description of the property;
• The name, and the signature or electronic signature, of the purchaser who is exercising the right of rescission;
• The name of each seller who is a party to the contract; and
• The date that the right of rescission is being exercised.
Many consumers do not wish to include their personal email or phone number on the contract of purchase and sale, and instead, the REALTOR® will include their information. Because notice can be sent to the email address provided in the Contract of Purchase and Sale, your REALTOR® can accept service (for a seller) or serve notice (for a buyer) on your behalf.
THE RESCISSION PERIOD DOES NOT APPLY TO ALL PROPERTY
The types of residential real estate property that are subject to the legislation are as follows:
• A detached house;
• A semi-detached house;
• A townhouse;
• An apartment in a duplex or other multi-unit dwelling;
• A residential strata lot, as defined in Section 1(1) of the Strata Property Act;
• A manufactured home that is affixed to land; and
• A cooperative interest, as defined in Section 1 of the Real Estate Development Marketing Act, that includes a right of use or occupation of a dwelling.
ARE THERE ANY EXEMPTIONS TO THE HBRP?The following types of properties are excluded from the legislation and the rescission period does not apply:
• Residential real property that is located on leased land;
• A leasehold interest in residential real property;
• Residential real property that is sold at auction; and
• Residential real property that is sold under a court order or the supervision of a court.
The HBRP also does not apply to any purchase and sale of property under the Real Estate Development and Marketing Act (“REDMA”) where Section 21 applies.
HOW YOUR REALTOR® HELPS
As your REALTOR®, we are required to make two disclosures regarding the HBRP Regulation. The first disclosure is made on the “Disclosure of Representation in Trading Services” Form which includes information for consumers on the HBRP Regulation at the outset of our agency relationship. When you are represented by us as your REALTOR®, we will also make a second disclosure at the time we prepare an offer on your behalf or present an offer to you.
This disclosure will include the following:
• The fact that the right of rescission cannot be waived;
• The period during which the buyer may exercise their rescission rights;
• The calculation of the dollar amount that the buyer must pay to the seller;
• The requirement to return to the buyer the remainder of the deposit (if one is being held); and
• The exemptions to the right of rescission.
As professional REALTORS® we work to protect your interests.
We take pride in staying educated, completing professional training on an ongoing basis. We know the importance of accurate information for our clients, we stay on top of a changing industry so you don’t have to!
If you have any questions about how this regulation may effect you whether you are looking to buy or sell property, please do not hesitate to contact us!
*information is taken from the BCFSA.ca website: Go here for more info
If you have any questions about how this regulation may effect you whether you are looking to buy or sell property, please do not hesitate to contact us!
Sara, Katie and Kelsey
The Amos Team!
*information is taken from the BCFSA.ca website: Go here for more info
