Home Buyer Rescission Period
Making a home purchase is one of the biggest decisions you will ever make. Unfortunately, mistakes do happen from time to time. People may discover they need more time before becoming homeowners or have other priorities to take into account before purchasing a house. In such cases, using the home buyer rescission period can be an ideal solution to avoid major headaches in the future.
What is the Home Buyer Restructuring Period?
Once the seller accepts your offer, you have the right to withdraw from your purchase contract under the Home Buyer Rescission Period (HBRP). However, if you wish to terminate without this grace period, negotiations must take place with them first; failing which could have legal repercussions and/or a significant financial penalty attached.
On January 1, 2023, British Columbia implemented their Homebuyer Bill of Rights ("HBRP") as what had previously been known as either a "cooling off period" or the "Homebuyer Protect Period."
Why is HBRP Essential?
Between signing a purchase agreement and when the seller accepts your offer, many things can happen that affect both parties involved. Here are some examples:
You could lose your job and without having an income, you could find yourself unable to manage the mortgage payments.
Due to your job, you must relocate elsewhere, making buying a townhouse an impractical decision.
Due to a family emergency, you may need to temporarily move in with your parents.
You found a better property that you are more interested in.
After discussing the details with your spouse, you would like to wait an additional year before purchasing a home.
How much time do you have before it becomes effective?
Typically, you have three business days to cancel your agreement; however, this may differ based on the specifics. Business days refer to Monday through Friday and do not include holidays like Canada Day, Family Day or Christmas Day.
What Properties are Affected by HBRP?
The HBRP can be applied to many aspects of real estate, including:
Apartments located in multi-unit homes of at least two units
Semi-detached and detached homes.
Manufactured houses are attached to land.
Residential strata lots
How should you notify the seller?
To formally rescind a sale, send the seller a formal notice by registered mail, email with a read receipt or fax.
Your Revocation Notice Must Contain:
Your name and signature.
Name of Seller.
Address, Description and Number of the Parcel.
What are the exemptions from HBRP?
Here are the current exemptions from rescission periods:
Any sale made under court supervision or with court approval.
Property purchased at auction
Land leased for residential real estate development
Assignment of Contract Sales Engagements
Pre-construction multi-unit developments properties are exempt from this requirement as they have a seven day rescission period.
What Information Must Realtors Provide You?
The Real Estate Board of Greater Vancouver requires your realtor to present you with an offer. This disclosure outlines the length of the rescission period, whether it can be waived and how much the deposit handling fee will be. Additionally, it outlines any exemptions from homebuyer protection periods.
What else should you know about the HBRP?
The Canadian government is still finalising the details of HBRP. As this program is relatively new, some adjustments will need to be made as buyers adjust their rescission periods.
Send us a message to Kim Lee, your Vancouver realtor if you have any queries about the Homebuyer Relief Program and other programs like those for first-time home buyers. She would be delighted to assist you on your home buying journey and demonstrate how she can be of service.