On January 1, 2023 the government introduced a cooling off period for buyers, a home buyer protection period, that allows home buyers three business days to back out of an accepted offer.
Key Points about the home buyer rescission period:
- The period will be effective January 1, 2023.
- Buyers will have three business days following the accepted offer date to back out of a residential purchase agreement.
- The period is mandatory and can't be waived by the parties to the contract.
- Buyers who back out of a contract within this three-day period will have to pay a rescission fee of 0.25% of the purchase price ($250 per $100,000).
- Buyers do not have to provide a deposit with their offer.
- If you have not provided a deposit with your offer and you rescind then you will need to pay the rescission fee to the seller directly.
The home buyer rescission period applies to following property types:
- Detached homes
- Semi-detached homes
- Apartments in a duplex or other multi-unit dwelling
- Strata lots as defined in Section 1(1) of the Strata Property Act
- Manufactured homes affixed to land
- Co-operative interest that include right of use or occupation of dwelling.
There are a few types of properties that are exempt from the home buyer rescission period.
- Properties subject to section 21 of the Real Estate Development Marketing Act.
- Residential real property located on leased land.
- Leasehold interest in residential real property.
- Residential real property that is sold at auction
- Residential property sold under court order or supervision of the court (foreclosures)
- The rescission period does not apply to the purchase of an assignment.
If this all sounds confusing and you need more clarity on buying or selling and want to know how this legislation impacts you, give us a call.