BC government to amend Property Law Act to add cooling off period
· The BC government is laying the groundwork to institute a cooling off period for homebuyers that will allow them to back out of a purchase after signing a contract.
· The cooling off period, called "Home Buyer Protection Period", will be in place by summer.
· BCFSA will soon release details on how this will work
The BC government introduced legislation on March 28,2022, known as Bill 12 – 2022, to create of a cooling off period that would allow buyers to back out of a purchase after signing a contract.
Minister of Finance Selina Robinson said this change will be in place by summer.
What we know so far
Robinson provided few details on how the cooling off period would work, saying that the BC Financial Services Authority (BCFSA) will release a report with more information in the coming weeks.
The report will inform the development of the regulations, and will include details on:
· The length of the period,
· Financial penalties for buyers who rescind an offer, and
· Regional variations in the legislation to address the differences between local housing markets.
During the press conference, the minister implied that a regional variation provision could be used to provide flexibility if the market changes.
The REALTOR® response
A cooling off period could have unintended consequences. Buyers could make bad faith offers that could tie up sellers, causing undue hardship and potentially preventing sellers from purchasing their next home.