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BCFSA advice will allow the Government of British Columbia to improve consumer protection through a measured implementation of its proposed homebuyer protection period.
Vancouver, May 26, 2022 – BC Financial Services Authority (“BCFSA”) is pleased to announce that it has delivered its report, Enhancing Consumer Protection in B.C.’s Real Estate Market, to the Minister of Finance. The report contains a suite of advice on potential parameters of the Government’s proposed homebuyer protection period, commonly referred to as the cooling-off period, for residential real estate sales, as well as advice on additional consumer protection measures to consider.
On November 4, 2021, Honourable Selina Robinson, Minister of Finance, announced that the Government would implement a homebuyer protection period. Minister Robinson also tasked BCFSA to consult with key stakeholders and experts. She called for BCFSA to report back with advice on potential parameters of a homebuyer protection period as well as additional measures to strengthen protection for homebuyers. On April 25, 2022, the Government passed Bill 12, amending the Property Law Act to enable the creation of a homebuyer protection period.
BCFSA’s report was developed following an in-depth consultation process that received input from a wide range of participants. During the process, BCFSA engaged more than 140 industry experts, including key real estate industry organizations, consumer and public interest organizations, and subject matter experts.
“The advice BCFSA has put forth on the parameters of a homebuyer protection period, along with measures to enhance consumer protection, is a comprehensive response to the Minister of Finance’s request,” says Blair Morrison, BCFSA CEO and Superintendent of Real Estate. “It is important that consumers can have confidence in the real estate transaction process. BCFSA’s advice focuses on improving consumer protection at every stage of the transaction process including through enhanced disclosure and transparency.”
The report includes the following advice to Government which aims to improve protection of homebuyers across the lifecycle of the real estate transaction process:
Parameters for a Homebuyer Protection Period
- Three clear business days.
- Narrow exemptions.
- A modest termination fee to address the risk of frivolous offers.
- Consider requiring disclosure of other active offers by prospective buyers.
- Reasonable access to the property for the buyer to conduct due diligence activities such as home inspections or confirmation of financing.
Additional Pre-Offer Period
- In addition to a homebuyer protection period, establish a five-business-day pre-offer period— the minimum time a property can spend on the market before any offer can be accepted.
- To further enhance transparency, require property disclosure forms, including key strata documents, be made available to prospective buyers at the time of listing or offer for sale.
Transparent Bidding Process
- Further explore open-bid, open-end auctions, including identification of the implications of open-bidding in B.C.’s real estate market.
- Consider implementing a disclosure of the number and price of offers where a buyer is asked to revise their offer in a multiple bid situation.
- Require the inclusion of standard optional clauses related to financing, home inspection, insurance, and legal advice in the contract of purchase and sale.
Enhanced Disclosure Post-Sale
- Require that sellers make an anonymized disclosure of offers to all prospective buyers who submitted an offer.
“People looking for a home need to be protected as they make one of the biggest financial decisions of their lives,” said Selina Robinson, Minister of Finance. “I want to thank the B.C. Financial Services Authority for their extensive industry consultations, which will help ensure that the new Homebuyer Protection Period is implemented in a way that will improve consumer protection. We will now review their advice, and I look forward to sharing details on our next steps as we move forward.”
Following extensive consultations, BCFSA advises the Minister that a three-day homebuyer protection period will enhance the buyer’s opportunity to conduct due diligence, while minimizing delays for sellers. As the Government considers implementation, further engagement with industry and adequate lead time will be critical to ensuring industry and consumers understand and are prepared for any changes. BCFSA looks forward to discussing its advice with the Government as it works to enhance consumer protection in B.C.’s real estate market.
“As the integrated regulator for B.C.’s financial services sector, including real estate, an important part of BCFSA’s mandate is consumer protection—supporting British Columbians to make informed choices rooted in fairness and transparency,” says Morrison. “During the consultation period, BCFSA received valuable feedback from participants, and we thank them for taking the time to provide input to inform BCFSA’s report.”
The advice provided to the Government aligns with BCFSA’s continuing commitment to promoting public confidence in B.C.’s financial services sector.
BC Financial Services Authority is a Crown regulatory agency of the Government of British Columbia. BCFSA oversees the financial services sector which includes pension plans, mortgage brokers, real estate services, real estate development marketing, and financial institutions (credit unions and insurance and trust companies). BCFSA also administers the Credit Union Deposit Insurance Corporation of British Columbia.
Sarah Lusk, Director of Communications
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