What’s New in Real Estate Legislation

During a very busy first half of 2022 in Real Estate where many, if not most buyers found themselves competing in the market, we saw an influx of “Subject Free Offers” coming in with each listing. This was partly due to the low interest rates we were seeing by the Bank of Canada as well as a record low inventory. Most buyers were able to do their due diligence prior to the offer review date though some found themselves in a situation where the timing didn’t allow them to. This meant some were purchasing without an inspection, ensuring their financing supported their purchase amount etc.

The BC government decided to intervene by introducing a Home Buyer Protection Period aka the “Cooling Off Period”. This new legislation will allow buyers to back out of their residential purchase up to three days after signing a contract. This is to ensure buyers have the time to do their due diligence such as securing financing and arranging a home inspection. This period will be mandatory as of January 1st, 2023 and cannot be waived. Buyers who back out of a home purchase will be required to pay a recision fee of 0.25% of the purchase price which will be paid to the seller.

Another new legislation passed that will be in effect as of January 1st, 2023, is the 2 year, temporary ban on foreign buyers into Canada in an attempt to curb house prices and ensure the working class and young Canadians aren’t pushed out of the real estate market. This act will not effect purchasers who are Canadian citizens or permanent residents. There will be exemptions to this law for permanent and temporary residents including temporary workers and international students. Any person or entity that knowingly assists a non-Canadian in purchasing real estate in Canada could be fined up to $10,000 and the purchased property will then be sold in a court-ordered sale. It is unsure whether or not this will have an impact on the underlying issue which is a lack of supply and inventory in the housing market.