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Home Buyer Rescission Period Frequently Asked Questions
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No. Any buyer listed on the contract of purchase and sale has a right to rescind the contract within the recission period on behalf of the other buyer(s). If the other buyer(s) listed on the contract wish to proceed with the transaction, a new offer will need to be drafted and presented to the seller.
No. Only buyers may rescind a contract under the Home Buyer Rescission Period.
Access to the property may be addressed in the contract of purchase and sale. If the contract is subject to inspection or has a term permitting the buyer to access the property, then the seller must abide by the terms of the agreement. The buyer does not have an automatic right to access the property during the recission period, although a seller may wish to grant access to a buyer during this period if they choose.
No. The buyer may rescind the contract at any point during the rescission period for any reason. This reason is not required to be relayed to the seller.
No. The right of rescission is guaranteed under the legislation and cannot be waived by any party. Even if the parties to the contract notionally agreed to waive the Home Buyer Rescission Period (“HBRP”), such an agreement would be contrary to the legislation.
No. Where a buyer has made a deposit that is being held in a brokerage trust account, the legislation requires that if a buyer rescinds the contract during the rescission period, the 0.25% rescission fee must be paid directly to the seller with the remainder of any deposit being held in trust returned to the buyer. No further agreement by the parties to the contract is required for the brokerage to do this.
Yes, the following types of residential real property are exempt from the right of rescission;
- Residential leasehold properties / residential real estate on leased land;
- 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 right of rescission also does not apply to any purchase and sale where Section 21 of the Real Estate Development Marketing Act (“REDMA”) would apply. Essentially, if a disclosure statement is provided to a consumer, they would not be able to rescind a contract of purchase and sale using the homebuyer protection period, as they are afforded other rescission rights under REDMA.
Note that some structures that may be commonly used as residences – such as float homes, manufactured homes on leased pads, and other dwellings built on leased land – are not subject to the HBRP.
The three business days begin the day after acceptance of an offer is signed. For example, if an offer is accepted on a Monday, then the recission period will end at 11:59:59 p.m. on Thursday, where there is no holiday falling into that period. Remember, business days are Monday through Friday and do not include Saturdays, Sundays or holidays. You should be mindful that for the purpose of calculating the rescission period, “holidays” are those days defined in the Interpretation Act. This list is different than the list of “statutory holidays” commonly used for employment purposes.
No, if a contract is rescinded during the rescission period the brokerage must pay the 0.25% fee to the seller without the need of a signed release. The rest of the deposit, if one exists, must be returned to the buyer. No signed release is required.
There are two disclosures about the recission period that licensees will need to make to consumers. The first disclosure alerts all consumers to the Home Buyer Rescission Period and forms part the Disclosure of Representation in Trading Services form. This form must be presented to clients and unrepresented consumers at the outset of the relationship.
In addition, when you are preparing an offer to purchase on behalf of a buyer client or presenting an offer to purchase to a seller client, you must also make a second disclosure which includes, among other information, the calculation of the amount of the rescission fee on the specific offer. In the case that there is an offer and counteroffer, you will need to update this disclosure to reflect any changes to the rescission fee amount. The date on which the rescission period expires can only be determined once the date of offer acceptance is known. You are required to make this second disclosure to clients.
Where an unrepresented party is involved in a transaction and the disclosure is included in the contract, it is likely that they will receive the information anyway by way of receiving a copy of the contract. In addition, a licensee who is providing limited trading services to an unrepresented party – such as filling out a contract or sharing a copy of an offer to purchase – may fill in the rescission fee amount and the date on which the rescission period expires (if known) without creating implied agency, provided that in doing so they present factual information only and do not further advise the unrepresented party on the HBRP.
As with any contractual disputes, should the brokerage not be holding a deposit and should the buyer refuse to pay the rescission fee, the seller would need to seek legal advice as to how to pursue the buyer for the money owed.
Many consumers do not wish to include their personal email or phone number on the contract of purchase and sale, and instead, licensees include their information. A licensee may wish to discuss with their client whether to use the brokerage’s contact information in the contract of purchase and sale for the purpose of receiving a notice on behalf of the client. You must remember that if you receive a notice to rescind a contract you must promptly notify your client of it.
Promptly means as soon as possible. It is recognized that it may take time for the deposit funds to clear the brokerage trust account. If this is the case, then the recission fee and the remainder of the deposit should be released promptly after funds have cleared.
No. The right of rescission does not apply to a contract in which a party’s rights under a contract of purchase and sale are assigned to another party.
No. The HBRP only applies to a manufactured home that is affixed to land, not one that is on a leased pad.
The rescission period begins when an offer is accepted. Even if the offer is a back-up offer and reliant on the first contract collapsing, the rescission period begins upon acceptance of that the back-up offer, not after the collapse of the first contract.
Depending on the method in which a buyer exercises their right of rescission, it may take time for the seller to become aware. If you are working with a buyer who has provided a rescission notice to a seller, and you are aware that the seller and/or their agents has not yet received it, with the permission of your client you should communicate the fact that the contract has been rescinded to the seller’s listing agent.
No. The Home Buyer Rescission period does not apply to commercial real estate transactions. It only applies to residential real estate transactions involving specific types of homes, as listed in Section 2 of the Home Buyer Rescission Period Regulation.
No. The Home Buyer Rescission Period Regulation requires a buyer who rescinds a contract to promptly pay the seller a rescission fee in an amount equal to 0.25% of the purchase price.
As the agent of the buyer, you may send a notice of rescission on your client’s behalf. It is recommended that you only do so where your client has provided written instructions or explicit authorization.
A holiday is defined in s. 29 of the Interpretation Act. Holidays include: Sunday, Christmas Day, Good Friday and Easter Monday, Canada Day, Victoria Day, British Columbia Day, Labour Day, Remembrance Day, Family Day and New Year’s Day, and December 26. Additional days may also be determined by the Parliament of Canada or the Legislature, or appointed by proclamation of the Governor General or the Lieutenant Governor.
No. If a holiday falls on a weekend, the length of time contained in section 4 of the Home Buyer Rescission Period Regulation (the “Regulation”) is not affected. Relevant definitions are contained in sections 1 and 2 of the Regulation and in the Interpretation Act. For example, if an offer is accepted on a Friday, the rescission period would begin the day after the accepted offer is signed. In this case, because Saturday is not a business day (see section 1 of the Regulation) and Sunday is a holiday (see the Interpretation Act), the rescission period would begin on Monday and would end at 11:59p.m. on Wednesday. This date would not change if a holiday (e.g., New Year’s Day) happened to fall on Saturday or Sunday. If you or your client require assistance calculating the rescission period, you should consider obtaining legal advice in view of the potentially significant consequences.
The regulation prescribes the requirements to serve a notice of rescission and provides that the rescission right is deemed to be exercised on the date that the notice is served. If you are unsure if a notice of rescission has been served by the buyer, you may wish to contact the buyer’s agent and/or seek legal advice.
The right of rescission under the Property Law Act applies to “residential real property” as defined in the Regulations (with some exceptions). Licensees should refer to the definition of “residential real property” to determine if the property in question falls within one of the categories in that definition.
If a mixed-use property includes one or more structures that clearly do not fall within any of the categories in the definition of “residential real property”, that property may potentially not be considered “residential real property” and as a result the right of rescission would not apply. Where you are unsure whether the right of rescission applies, you may wish to seek legal advice.
The right of rescission under the Property Law Act applies to “residential real property” as defined in the Regulations (with some exceptions). The definition relies on the type of structure on the lot. Generally, a vacant lot with no structures on it would not meet the definition of “residential real property.” However, some types of bare land – such as a bare land strata lot– could be subject to the HBRP. If you are unsure whether the right of rescission applies to a particular type of property, you may wish to seek legal advice.
Ownership structures of strata hotel units can be complex. If you are unsure whether the right of rescission applies, you may wish to seek legal advice.
The rescission period applies to any contract for the purchase or sale of residential real property entered into on or after January 3, 2023, except where a property is exempted by the legislation. Where an offer has been prepared and/or presented before January 3 but is not accepted until on or after that date, as a best practice, a prudent licensee should make the detailed disclosure required by s. 57.1 of the Rules to their client.
Omitting the HBRP from the contract of purchase and sale (“CPS”) will not affect the validity of the CPS. The HBRP, in section 42 of the Property Law Act, cannot be contracted out of; it applies even if it is not in the contract. However, you still need to make the HBRP disclosure required by section 57.1 of the Rules. You could be subject to regulatory sanctions or other consequences for failing to do so. If you use a CPS that does not contain the HBRP disclosure, you must provide your client with BCFSA’s approved HBRP disclosure form.
Additional information can be found in BCFSA’s guideline on the HBRP.
No. You only need to provide BCFSA’s HBRP disclosure form to clients when a licensee cannot, or does not wish to, use BCREA’s standard contract of purchase and sale. Both the BCFSA form and BCREA’s standard CPS are forms approved by the Superintendent for the purpose of section 57.1 of the Rules (*note: you must also properly complete the information required by each form, such as calculation of the dollar amount that the buyer must pay to exercise the right of rescission).
When clients have questions about the tax implications of a real estate transaction that are outside your expertise as a real estate licensee, BCFSA recommends that you advise your clients to seek independent professional advice.