What does The Home Buyers Rescission Period mean for Buyers and Sellers?
The Home Buyer Rescission Period (HBRP), also known as “Homebuyer Protection Period” and “cooling-off period,” gives buyers the right to withdraw from a contract of purchase and sale for any reason whatsoever.
The Buyer has 3 business days to rescind their offer for whatever reason, starting the day AFTER the accepted offer, and not including weekends and holidays. This extra time will help buyers to consider whether a purchase is right for them under any market conditions, including in the face of rising interest rates and any high-pressure sales.
The cooling off period applies to detached houses, townhomes and condos but does not apply when homes are auctioned or when the home is on leased land.
HOWEVER, this does not come without a cost. Should the Buyer decide to withdraw or cancel their offer in the 3 day period, they will be charged a rescission fee of 0.25% of the accepted offer price or $250 for every $100,000, to help ensure that all parties are taking the transaction seriously. Therefore, on a million-dollar offer, that adds up to a penalty of $2500 to be paid to the Seller.
If you are a home seller you might also want to read our blog post on the other government legislation changes that affect the selling of your home.
