The British Columbia Real Estate Association (BCREA) is advocating for a pre-offer period that would replace the rescission period the Province introduced in 2022, and came into effect on January 3, 2023, and has not really done much but create more paperwork.
In fact, BCREA says it conducted a survey of its realtors about the rescission period — officially called the Home Buyer Rescission Period (HBRP) — and found that 93% of the 2,986 respondents said that they had not had any homebuyers use the rescission period. BCREA also noted that "most buyers mistakenly assume that they can use the three day HBRP to conduct due diligence, such as site inspections, when no such right (or sufficient time) exists, unless stipulated in the Agreement for Purchase and Sale."
"Rather than providing government-touted buyer protections during real estate transactions, the HBRP has caused confusion, exposure, and negative unintended consequences for buyers and sellers alike," said BCREA in a policy brief this month.
Additionally, BCREA says it has seen instances where "unscrupulous purchasers" are exploiting the rescission period as a loophole to tie up multiple properties, "resulting in cascading consequences for sellers, from sale delays due to rescinded agreements to pressure on sellers to renegotiate agreements which were already finalized, and the loss of potential purchasers."
That is why BCREA says it is pushing for a pre-offer period to serve as a genuine consumer protection for both buyers and sellers.
"During the pre-offer period, sellers would make access to the listed property available for viewings and home inspections," said BCREA. "All documents related to the property would be made available at the time of the listing."
This pre-offer period would last for five days, commencing on the date of the listing, BCREA says, and sellers cannot view or accept any offers on the property during the five days.
"Providing prospective purchasers with property documents and property access before any offers can be made allows a genuine opportunity for due diligence and the ability to make an informed offer, dramatically reducing the potential for buyers' regret and the HBRP's use," BCREA said. "In turn, this reduces the negative unintended consequences of the HBRP for the seller, specifically, the cascading collapse of dependent transactions, uncertainty and delays, and actions of nefarious purchasers tying up multiple properties or pressuring sellers to renegotiate."
BCREA notes that the introduction of the rescission period was a reactionary move to the overheated market during the COVID-19 pandemic, but that the market cooled off significantly by the time the rescission period actually came into effect in 2023, and that the rescission period is now longer of much use.
BCREA formally made this recommendation to government officials earlier this month at its Government Liaison Days event, where it also pushed once more for the Province to establish a permanent housing roundtable.
