FAQ: Homebuyer Rescission Period (HBRP) Explained

As of January 1, 2023, there is a new real estate policy put in place meant to protect homebuyers. 12 months ago we saw the peak of the market where it was an extremely strong seller's market. Buyers were unprotected because in order to get an offer accepted, there needed to be no subjects or clauses in them. In other words, in order to get an accepted offer, you needed to put in a no-strings-attached, cash offer. 

Fast forward to 2023, the government decided to put in place something called a "Homebuyer Rescission Period (HBRP)". This is mandatory on all resale transactions (some exemptions apply). This is meant to protect you as a homebuyer and provide you with an exit if you need it. It is mandatory, which means it does not matter that you have subjects or clauses in your offer, this runs at the same time. So luckily for you, I have put together a Q&A to help you understand this new rescission period:

#1. What is the Home Buyer Rescission Period (HBRP)?

The HBRP provides buyers with an opportunity to rescind their contract to purchase certain residential properties up to three business days after an offer is accepted with a financial penalty. This rescission period applies to residential real property transactions regardless of whether a real estate licensee is involved in the transaction and cannot be waived by the buyer or the seller.

#2. How much is the rescission fee?

Buyers who exercise their right to rescind will have to pay a fee of 0.25% of the purchase price. For a $1,000,000 home, this would result in a $2,500 fee paid to the seller.

#3. What is meant by three business days?

The HBRP provides that the buyer must exercise their rescission right within three clear business days. Business days do not include Saturdays, Sundays or holidays. Holidays are defined within the Interpretation Act.

#4. What properties will be subject to the HBRP?

The policy will apply to the following types of structures:

• detached homes,

• semi-detached homes,

• townhouses,

• apartments in a duplex or other multi-unit dwellings,

• residential strata lots,

• manufactured homes that are affixed to land, and

• cooperative interests that include a right of use or occupation of a dwelling

#5. What are the exemptions to the HBRP?

The following types of properties are excluded from the legislation and the rescission period does not apply:

• residential property on leased land;

• leasehold interest in residential property;

• residential property that is sold at auction; and

• residential property that is sold under a court order or the supervision of a court

• assignment of contracts 

• presales/ pre-construction

Currently, we are in a balanced or buyer's market depending on the neighbourhood, however, when we do eventually see a seller's market again-- do you believe this protects you as a homebuyer? 

Let me know in the comments below!

And remember, I am always happy to help! 

Your local real estate agent, 

Nina Djuric

778.908.1440

soldwnina@gmail.com