At a glance (3 minute read)

• The government passed enabling legislation for a cooling off period, allowing buyers to back out of a deal after a contract is signed within a now undetermined amount of time.
• Details on how the period will work are coming from BCFSA, who is currently working on a cooling off period report.

BC Finance Minister Selina Robinson introduced Bill 12: Property Law Amendment Act in March, creating a new homebuyer protection period to allow a buyer with an accepted offer to back out, within a specified number of days, after signing a Contract of Purchase and Sale.

Minister Robinson noted this move is not about housing affordability. It’s about protecting needs of home buyers by allowing them to better assess, finance, and inspect a home they plan on buying during competitive real estate markets.

Currently, under the Real Estate Development Marketing Act, there’s a seven-day cooling off period for pre-construction sales of multi-unit properties.

The BC Financial Services Authority (BCFSA) is expected to release a report in the coming weeks summarizing its consultation with the province and stakeholders and providing recommendations on:

• the length of the cooling off period, 
• financial penalties for buyers who rescind an offer, and 
• regional variations in the legislation to address the differences between local housing markets.

The province expects to have this in place this summer.

A cooling off period could have unintended consequences. For example, buyers may make bad faith offers that could tie up sellers, causing undue hardship and potentially preventing sellers from buying their next home.

Your Board, along with the BC Real Estate Association (BCREA), has been recommending a pre-offer period as an alternative policy measure where offers can’t be presented to a seller until the home has been listed for five business days.

“It would be easier for everyone to get in, do their due diligence, and then just take the offers after,” said Daniel John, REBGV Chair, about the approach that we’re recommending  in an interview with CityNews. 

BCREA, with support of BC’s real estate boards, published a white paper on February 28 that contains 30 policy recommendations for the provincial government, including the pre-offer period recommendation. We also participated in a news conference with BCREA to discuss these recommendations in more detail.

We continue to work with BCREA to advocate this approach to MLAs across the province. You can help amplify this message by emailing the Minister of Finance (FIN.Minister@gov.bc.ca) and CC your local MLA using this template.

BCREA also released a response to the announcement, which included a recent poll that found only 35 per cent of British Columbians are in favour of a cooling off period.

Other consumer protection issues included in BCFSA’s consultation include the so-called “blind bidding” system, condition waiving and other practices that emerge in competitive housing markets.

Read the government news release.