B.C. to introduce 'cooling off' period legislation for real estate
The legislation would allow purchasers to back out with no or diminished legal consequences
British Columbia's government will introduce legislation in the spring of 2022 with the aim of giving homebuyers a chance to change their minds on the purchase of a home, according to the province.
In a statement Thursday, the province said a so-called cooling-off period would allow purchasers to back out with no or diminished legal consequences.
The B.C. Financial Services Authority said it also will be consulting with those in the real estate industry and other experts on more ways to protect consumers, including a review of the blind bidding system, which can significantly raise the price of purchase.
The COVID-19 pandemic has impacted the real estate market, first by dipping during the initial weeks of the pandemic, then surging, according to Finance Minister Selina Robinson who spoke at a media briefing Thursday. She also said the consumer protection consultation "needs to be done right.''
Blair Morrison, CEO of the Financial Services Authority, says ensuring fair markets and promoting public confidence in B.C.'s real estate sector is a key priority.
The province already has a cooling-off period in place for pre-construction condo sales.
Andy Yan, urban planner and adjunct professor at Simon Fraser University, said homebuyers making likely the biggest purchase of their lives have been facing a lot of pressure due to a changing market and the emotional roller coaster of living under a pandemic.
He said the rush to buy has meant people were purchasing a home without inspections and proper research.
"A lot of this is really due to the type of kind of significant volatility that has occurred just over the last 18 months with COVID, low interest rates and a relatively low inventory," said Yan.
He said the cooling off period provides a layer of consumer protection that will be built into the contract for real estate purchases, which he said he believes will have a 'calming effect' on the province's real estate market.
With files from Meera Bains