BC's Home Buyer Rescission Period: How the 3-Day Cooling-Off Right Works

You have just had an offer accepted on a home and something does not feel right. In British Columbia, most buyers of residential property have a short, statutory window to cancel the deal without giving a reason.

The window is only three business days, it comes with a fee, and the notice must be served in a particular way. This guide explains how the home buyer rescission period works and where buyers trip up.

What the rescission period is

Since January 3, 2023, section 42 of the Property Law Act has let a buyer of residential real property in BC rescind, or cancel, the contract of purchase and sale by serving written notice on the seller within a set number of days after the acceptance of the offer was signed. The Home Buyer Rescission Period Regulation sets that number at three business days.

You do not need a reason to use it, and only the buyer has the right. The seller cannot rescind under this rule. But it is not a free exit: the buyer has to pay the seller 0.25% of the purchase price. Think of it as a short, paid window to confirm that the deal you have just made is one you want to keep.

Which purchases it covers

The regulation defines residential real property to include:

• a detached house, semi-detached house or townhouse;
• an apartment in a duplex or other multi-unit dwelling;
• a residential strata lot;
• a manufactured home that is affixed to land;
• a cooperative interest that includes a right to use or occupy a dwelling.

Some purchases are exempt. The right does not apply to residential property on leased land, a leasehold interest, a property sold at auction, or a property sold under a court order or the supervision of a court. It also does not apply to a contract covered by section 21 of the Real Estate Development Marketing Act. That is the separate seven-day right for many pre-sale purchases, explained in our guide to pre-sale disclosure statements and the 7-day rescission right. And the right ends once title has been transferred to you.

Counting the three business days

Under the regulation, a business day is any day other than a Saturday or a holiday. BC's Interpretation Act defines holidays to include Sundays and statutory holidays such as Family Day, Good Friday, Easter Monday, Victoria Day, Canada Day, British Columbia Day, Labour Day, the National Day for Truth and Reconciliation, Remembrance Day and Christmas Day.

The Interpretation Act also says how to count a period of days "after" a date: start with the day after. So the day the acceptance was signed does not count.

Example only. If the acceptance is signed on a Wednesday and no holidays fall in the next few days, the three business days are Thursday, Friday and Monday. If that Monday is a holiday, the period runs to Tuesday.

Three practical points:

• The clock runs from acceptance, not from subject removal. It runs whether or not your offer has subject clauses.
• Pin down the acceptance date. After a series of counter-offers, check which signature completed the deal and when.
• Do not wait for the last evening. The regulation sets no time of day, so serve well before the last day ends.

How to give notice properly

The notice must be in writing and must contain:

• the address, the parcel identifier or a description of the property;
• the name, and the signature or electronic signature, of the buyer exercising the right;
• the name of each seller who is a party to the contract;
• the date the right is being exercised.

A notice may be served on any day, including a weekend. It is deemed served on the seller when it is sent by registered mail to the seller's address set out in the contract, by fax to the seller's fax number in the contract, or by email, with a read receipt requested, to the seller's email address in the contract. Those deemed-service rules only work if the contract actually lists those details, so check it the day you sign.

A phone call, or a message to your own realtor, is not written notice served on the seller.

The 0.25% payment and your deposit

If you rescind, you must promptly pay the seller 0.25% of the purchase price in the contract.

Example only. On a $900,000 purchase, the amount is $2,250.

If a deposit was paid to the seller or someone holding it for the seller, the 0.25% comes out of the deposit and the rest must be returned to you promptly. The regulation allows a brokerage to release both amounts from its trust account. If you rescind before paying any deposit, you still owe the 0.25%.

It cannot be waived, and it is not the only way out

The regulation states that the right of rescission cannot be waived. A clause in the contract that tries to remove it, or a seller's request that you sign it away to get ahead in a bidding contest, does not take the right from you.

Rescission is also not the only exit. If your contract still has subject clauses, such as financing or inspection, those may be another route out on the terms they set, and which route applies, and at what cost, depends on the wording. Once both the rescission period and your subjects have passed, the contract is usually firm. Our article on backing out after subject removal covers what walking away can cost at that stage.

If the seller disputes your notice or refuses to release the deposit, get advice quickly: a disagreement over whether the notice was valid or on time can turn into a claim.

Thinking of rescinding? Call before the third business day ends

Our real estate lawyers can confirm whether the right applies to your purchase, count the deadline from your acceptance, and prepare and serve the notice of rescission so that it meets the regulation.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.