1.) Prohibition on the Purchase of Residential Property by Non-Canadian Act (Foreign Buyers Ban)
On June 23, 2022, the federal government passed the Prohibition on the Purchase of Residential Property by Non-Canadian Act; coming into effect January 1, 2023. This act prevents non-Canadian citizens from buying residential property in Canada for 2 years.In a nutshell, this Act:
- Does not apply to Canadian citizens or permanent residents.
- Applies to Non-Canadians directly or indirectly purchasing residential property in Canada for a period of 2 years.
- Applies to residential properties such as detached houses, semi-detached houses, condominium units, or other similar premises.
- Applies to direct or indirect purchases through corporations, trusts or other legal entities.
Exceptions to the prohibition are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations. For further details, please consult the regulations to those who fall within the exemptions to seek legal advice on eligibility.
Properties located outside of a Census Agglomeration (CA) or Census Metropolitan Area (CMA) are excluded from this prohibition. Full list of all the CA and CMA in the province. From what we can tell, Whistler area is allowed.
OTHER RESOURCE LINKS:
https://canadagazette.gc.ca/rp-pr/p2/2022/2022-12-21/html/sor-dors250-eng.html
https://laws-lois.justice.gc.ca/eng/acts/P-25.2/page-1.html
2.) Home Buyer Rescission Period (HBRP) or "Cooling Off Period"
Effective January 3, 2023, a new buyer protection will be initiated which will give British Columbia buyers of most residential properties a rescission period, informally known as a "cooling-off period", where buyers can change their minds within a prescribed period and cancel a contract of purchase and sale for residential property with a few consequences.In a nutshell, this Act:
- Applies whether or not the parties to a transaction are represented by a licensee.
- Establishes a buyer's right to rescind or cancel a contract of purchase and sale within a three-business day period after final acceptance.
If a buyer chooses to invoke their right of rescission within the rescission period, the buyer must:
- pay the seller 0.25% of the purchase price in compensation; which means that the right to rescind exists but it comes with a fee.
- serve a written notice to the seller if they seek to rescind the contract. The notice must include the property address or legal description, the name and signature of the person exercising the rescission right, the name of all sellers in the contract of purchase and sale, and the date the right of rescission is being exercised. (The right of rescission cannot be waived by the parties).
The intention for this Act is to give buyers time to complete their due diligence that will inevitably help in making an informed decision about a purchase. The state of the real estate market at various times in certain regions is such that those activities may be difficult or at times not possible to effectively perform prior to submitting an offer or to include as subjects, which can lead to conflicts, expense, and regret.
Due diligence activities can include confirming financing, reviewing relevant documents regarding the property, and undertaking inspections. It should be noted, however, that there is no requirement that a buyer show unsatisfactory results of due diligence efforts or even that they performed any such efforts before they can exercise their cancellation right under the Act. A buyer can simply change their mind, pay the fee, and cancel the contract; no explanation is required.
It should also be noted that conditions should still be included in the contract of purchase and sale to provide access to the property in question and to obtain other information required to perform the due diligence a buyer chooses to undertake. The fact that a cooling-off period now exists does not render due diligence conditions in a contract redundant.
The following types of residential properties are exempt from the right of rescission:
- Residential leasehold properties / residential real estate on leased land.
- Residential real property that is sold at auction.
- Residential real property that is sold under a court order or the supervision of a court.
- Some structures that may be commonly used as residences - float homes, manufactured homes on lease pads and other dwelling built on leased land.
The right of rescission also does not apply where Section 21 of the Real Estate Development Act (REDMA) would apply. The existing REDMA provides a mandatory seven-day cooling-off period for presale developments in which a buyer can cancel a presale real estate purchase without consequence. Basically, if a disclosure statement is provided to a consumer, they would not be able to invoke the HBRP to rescind a contract of purchase and sale as they are under the rescission rights of REDMA.
RESOURCE LINKS:
https://www.leg.bc.ca/content/data%20-%20ldp/Pages/42nd3rd/1st_read/PDF/gov12-1.pdf
https://www.bcfsa.ca/media/2861/download
3.) Bill 44: Building and Strata Statutes Amendment Act
On November 24, 2022, the provincial government passed Bill 44 which changes the restrictions around rentals and ages of owners and tenants under the new Building and Strata Statutes Amendment Act. However, strata corporations can still restrict commercial uses or prohibit vacation, travel or temporary short-term accommodations. The amendment became effective immediately on November 24, 2022In a nutshell, this Act:
- removes a strata corporation's former power to prohibit the rental of strata lots or limit the number or percentage of residential lots that may be rented or the period of time for which residential strata lots may be rented. This act ultimately replaces this power with an express ban on restrictions of rentals of strata lots.
- prohibits a strata corporation from passing an age restriction bylaw other than a bylaw requiring one or more residents of a strata lot to have reached a specified age that is not less than 55 years. This does not apply to people already living in the strata lot when the Bylaw is passed and live-in caregivers.
As property owners of real estate in British Columbia, it is imperative that you inquire through your strata corporation regarding the new updates that have been made to the Strata Property Act and how the Bylaws specific to your property address will reflect the changes regarding the rental and age restrictions.
RESOURCE LINKS:
https://www2.gov.bc.ca/gov/content/housing-tenancy/strata-housing/legislation-and-changes/changes-to-legislation
https://www.leg.bc.ca/Pages/BCLASS-Legacy.aspx#%2Fcontent%2Fdata%2520-%2520ldp%2Fpages%2F42nd3rd%2F1st_read%2Fgov44-1.htm
