Amid an overheated real estate market, the BC government is amending the Property Law Act to combat pressures facing homebuyers.
Introduced Monday, a Homebuyer Protection Period—or cooling-off period—looks to protect those purchasing a presale property or newly constructed home, according to provincial officials.
First announced in November, Finance Minister Selina Robinson says a cooling-off period gives buyers more time to review their offers, ensure financing and obtain a home inspection—instead of feeling rushed to waive these conditions.
Currently, Robinson finds buyers are pressed to submit offers without basic conditions that protect their interests.
She says oftentimes, it leads new homeowners to discover costly problems only after a deal has closed.
“People need to have protection as they make one of the biggest financial decisions of their lives,” said Robinson.
“We want to make sure people buying a home have time to get the information they need to make a sound decision within limits that still give sellers the certainty they need to close sales.”
The BC legislation would be the first of its kind in Canada and allow for regional variation within the province, recognizing the housing market varies between regions.
Robinson says the goal is to have the protective measures in place by summer.
Regulations will also be established this year to define the specific time homebuyers will have to exercise this right and the financial costs of retracting an offer.
Some experts concerned
Last month, the British Columbia Real Estate Association (BCREA) voiced concerns about a cooling-off period, saying it must be done in an “evidence-based” and “regionally nuanced” way that also considers sellers and changing market trends.
“Without these best practices, policies are likely to result in unintended negative consequences for consumers and the real estate market as a whole,” the association said.
But Minister Robinson points to a BC Financial Services Authority consultation with industry stakeholders—including home inspectors, appraisers and real estate agents. She says the complete legislation analysis is expected this spring.
In February, the BCREA shared a series of “sweeping recommendations” for the BC government to address current concerns with the province’s housing market, the real estate transaction process and consumer protection.
That’s because previous analysis of cooling-off periods in other global jurisdictions has shown the policy to be “ineffectual at best,” according to the association.
A Better Way Home: Strengthening Consumer Protection in Real Estate pointed to over 30 recommendations, including establishing a mandatory “pre-offer period” and helping consumers make more informed decisions in multiple offer scenarios.