B.C.’s finance minister has announced yet another measure that will impact the province’s housing market.
As of Jan. 1, 2023, homebuyers will have a three-day period to secure financing and arrange home inspections. Minister Selina Robinson said this measure will protect homebuyers from high-pressure sales.
The announcement came just one day after Robinson announced the speculation and vacancy tax would expand to housing markets in Squamish, Lions Bay, Ladysmith, North Cowichan, Cowichan Lake and Duncan.
“Too many people have been faced with giving up an inspection in order to buy a home. This is a major step toward providing homebuyers with the peace of mind they deserve while protecting the interests of people selling their homes - for today’s market and in the future.”
The policy includes a cancellation fee if buyers decide to back out. The fee is approximately 0.25 per cent or $250 for every $100,000 of the home’s sale price.
Robinson said the policy came out of consultations conducted by the B.C. Financial Services Authority — a crown corporation responsible for regulating the financial service sector. Consultations included a “wide range” of real estate industry stakeholders, including home inspectors, appraisers, realtors and academics, as well as representatives from the legal and financial services sectors.
B.C. will be the first province to implement a “homebuyer protection period”.
‘Too little, too late’
Trevor Koot, CEO of the B.C. Real Estate Association said that while the industry welcomes added consumer protections for homebuyers, the policy announcement contains ‘very little’ of several recommendations from both the BCREA and the BCFSA.
“First and foremost we want to see the BCFSA empowered to do their job. This government and this ministry is enacting policy that isn’t evidence-based. They’re not following what’s happening on the frontlines and what’s actually happening in the industry. As a result, they’re following through on a political promise and not providing the holistic suggestions and recommendations that came from their own regulator.”
Koot added that the cooling-off period is ‘almost a moot point’ now that the housing market has changed and multiple-offer scenarios are no longer common. The policy will protect consumers in the event that the market returns to the frenzied behaviour seen throughout much of the pandemic.
Both the BCFSA and the BCREA recommended the government do more to protect consumers. Koot said both organizations recommended a five-day pre-offer period in conjunction with the three-day cooling-off period.
The proposed pre-offer period would require that property disclosure forms, including key strata documents, be made available to prospective buyers at the time of listing or offer for sale.
“What ended up happening was the minister ignored the recommendations of the BCFSA.”
Koot said the BCREA welcomes more measures to protect homebuyers, but he’s disappointed that the province didn’t do more and didn’t do it in collaboration with the industry.
“If we’re ultimately talking about consumer protection, then let’s do that.”