New Home Buyer Rescission Period in Around Town
Your Weekly Construction Briefing
The new buyer protection initiative came into force January 3, 2023. The ‘cooling off period’ will allow buyers to change their minds within three days of having their offer accepted on resale or newly built homes.
The right of rescission is imposed by legislation, and parties cannot come to an agreement between themselves not to exercise this right. If the buyer chooses to rescind, they must serve written notice that includes the property address or legal description, the name and signature of the person exercising the rescission right, the name of all sellers in the contract of purchase and sale, and the date the right of rescission is being exercised.
This does not replace the common due diligence options that can be included in an offer, such as financing or a home inspection. It simply allows buyers to change their mind by paying 0.25% of the purchase price as compensation.
The three-business day period is intended to strike a balance that minimizes potential delays for sellers while still being a mechanism to assist buyers, particularly in hot and high-pressure markets. The idea seems to be to give buyers time to complete diligence activities such as confirming financing, reviewing relevant documents regarding the property, and undertaking inspections.
During the three days, the seller does not need to provide access to the property unless it’s requested in the contract. Therefore, if the offer is subject free, it will still require a term permitting the buyers access to the property for due diligence.
For more information, read about the new recission period in BC Real Estate Association’s FAQs.
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