SURREY, BC – Supply of available homes in the Fraser Valley market continued to build last month, however buyers remained relatively hesitant, leading to a cooler resale market in April. The Fraser Valley Real Estate Board recorded 1,471 transactions on its Multiple Listings Service® (MLS®) in April, up 5 per cent from March, but off by 5 per cent compared to April 2023. While sales were the third lowest recorded for an April in the last decade, inventory continues to build, reaching levels not seen since September 2020. Active listings were 7,313, up by 18 per cent over last month and 17 per cent above the 10-year average.

FVREB Stats Package for April 2024

Throughout the month of April, the federal government made several announcements regarding housing in Canada and introduced the 2024 Budget.

The Canadian Real Estate Association (CREA) is conducting ongoing analyses of these policies to understand both the impact to REALTORS® and the Canadian housing and real estate market.

Here are a few of the important things REALTORS® should know about what’s been announced.

Canada’s Housing Plan

On Friday, April 12, 2024, the federal government announced Canada’s Housing Plan, the first articulation of a “systems” approach to housing and home building – through skills, financing, home building methods, reducing approval barriers, and infrastructure tied to housing.

It’s an ambitious plan that acknowledges and aims to address housing affordability and supply across the continuum, something REALTORS® have been encouraging for years.

“Canada’s housing challenges have been building over many years and no one group can tackle it on their own. REALTORS® across Canada have been advocating for a collaborative, multi-faceted approach for years. We’re ready to play our part,” said Janice Myers, CREA’s CEO, following the announcement.

For nearly 40 years, CREA has engaged elected officials and government to discuss solutions and make recommendations on behalf of REALTORS®. We’re pleased to see Canada’s Housing Plan reflects many of the recommendations we’ve put forth over the years to help address the challenges and needs facing Canadian property buyers, sellers, and renters.

The government proposes to increase housing supply by:

• Introducing an Accelerated Capital Cost Allowance for apartments.

• Expanding the removal of federal taxes (GST) for rental housing.

• Increasing the annual limit for Canada Mortgage Bonds.

• Providing low-cost loans to build apartments for the middle-class.

• Making the Apartment Construction Loan Program easier and faster to use.

• Launching Canada Builds, a team Canada approach to building affordable homes for the middle class, including on under-utilized public lands across the country.

• Building homes on top of shops and businesses.

• Launching a Historic Public Lands for Homes Plan.

• Modernizing housing data.

• Offering low-cost financing for homeowners to add additional suites.

• Further incentivizing density to existing homes.

• Investing in Indigenous housing and infrastructure.

• Supporting Indigenous people living away from their communities in urban, rural, and Northern areas.

• Helping municipalities legalize housing and streamline approvals.

• Attaching housing conditions on public transit funding.

• Building the necessary infrastructure to support growing communities.

• Leveraging the Canada Infrastructure Bank.

• Implementing an industrial strategy for home building.

• Introducing a standardized housing design catalogue.

• Scaling up new tech to build new homes.

• Investing in new approaches to home building.

• Providing low-cost loans to prefabricated housing projects.

• Simplifying the way Canada builds homes.

• Making building codes digital.

• Training the next generation of skilled trades workers.

• Improving labour mobility to connect more people to opportunity.

The government proposes to make it easier for Canadians to rent or buy a home by: 

• Launching a Tenant Protection Fund.

• Creating a new Canadian Renters’ Bill of Rights.

• Leveraging rental payment history to improve credit scores.

• Extending mortgage amortizations for first-time buyers buying newly built homes.

• Strengthening the Canadian Mortgage Charter.

• Leveraging the Tax-Free First Home Savings Account.

• Increasing the Home Buyers’ Plan withdrawal limit.

• Extending the grace period to repay Home Buyers’ Plan withdrawals.

• Making home cheaper to heat, and easier on the environment.

• Helping municipalities enforce regulations limiting short-term rentals.

• Removing tax deductions for certain short-term rental operators.

• Extending the ban on foreign home buyers.

• Combatting mortgage fraud.

• Cracking down on real estate fraud.

• Confronting the financialization of housing.

The government proposes to help Canadians who can’t afford a home by: 

• Providing $1 billion for the Affordable Housing Fund to build affordable homes.

• Launching a new Rapid Housing Stream.

• Making the Affordable Housing Fund easier to use.

• Launching a $1.5-billion Canada Rental Protection Fund.

• Launching a new Co-operative Housing Development program.

• Keeping non-profit and co-op homes affordable.

• Introducing more supports to address homelessness.

• Reducing homelessness faster.

• Addressing encampments and unsheltered homelessness.

• Ending homelessness for veterans in Canada.

• Sheltering asylum claimants.

• Funding culturally relevant services, shelter, and transitional housing.

2024 Budget

On Tuesday April 16, 2024, Deputy Prime Minister and Minister of Finance, the Honourable Chrystia Freeland, tabled the fourth budget of the 44th parliamentary session, Fairness for Every Generation, a budget they say is heavily focused on building “a Canada that works better for you, where you can get ahead, where your hard work pays off, where you can buy a home—where you have a fair chance at a good middle class life.”

The majority of the housing measures reflected in Budget 2024 were announced prior to the introduction of the budget, accumulating in the Canada’s Housing Plan announcement.

These are the new housing related measures announced in Budget 2024:

• The government will consider introducing a new tax on residentially zoned vacant land and will launch consultations later this year.

• The government intends to increase the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains by corporations and trusts from one-half to two-thirds, by amending the Income Tax Act, effective June 25, 2024.

• The government intends to establish a subsidiary of the Canada Mortgage and Housing Corporation (CMHC) to deliver flood reinsurance.

• The government intends to restrict the purchase and acquisition of existing single-family homes by very large corporate investors. The government will consult in the coming months and provide further details in the 2024 Fall Economic Statement.

• The government is exploring new measures to expand access to alternative financing products, like halal mortgages.

Capital Gains

While CREA applauds the federal government’s “all hands on deck” approach to tackling Canada’s housing crisis, there are potential concerns with the proposed changes to the capital gains inclusion rate. Over the coming weeks, CREA will be actively analyzing the implications of these announced measures.

We’re particularly interested in its potential impact on REALTORS®, their clients, and housing supply. To this end our Economics team is undertaking data analysis; our Government Relations team is engaged in stakeholder outreach with both internal and external groups; and we’ll be fielding a member survey to gather feedback from a representative sample of REALTORS®. This approach will ensure our understanding is thorough, and any subsequent actions are well-informed and effective.

In addition, the latest budget explicitly restated the exemption for capital gains from the sale on principal residences has been maintained. We will vigorously hold the government to this commitment.

Further information about these points will be communicated as it becomes available.

Sales statuses for listings on the MLS® will look completely different starting in June, adding more transparency for REALTORS®, and their clients looking to buy or sell a home.

The new status structure will include three new statuses:

• Active Under Contract – This optional status will be used when a listing has an accepted offer with subjects on it. If your brokerage has permitted use of this status, and you have the Agent Modify ability, you can change to this status on your own. Note – you’ll also need the seller’s permission to use this status. This can be added to the schedule A.

• Pending – Replacing the current “Sold” status, this status will be applied to listings that have an accepted subject-free offer, or once all subjects are removed.

• Closed – Listings will automatically move to this status at the end of their completion date.

What the home-sale transaction process will look like

With these new statuses, listings will look a little different in both Paragon and on real estate listings sites like Realtor.ca and Realtylink.org.

The new sales status tree will look like this:

1. Active

2. Active Under Contract

3. Pending

4. Closed

5. Expired

Active and Active Under Contract

All listings will start as “Active”, which means the listing is available.

If the seller accepts a conditional offer, the listing will then move to “Active Under Contract” if the listing Realtor’s office allows the use of this status, and the seller has provided instruction to do so.

If the seller accepts an unconditional offer, or the subjects on a conditional offer are removed, the sales status will move to the next phase.

Pending and Closed

There will no longer be a “Sold” status. Instead, “Sold” will be divided into two new statuses – “Pending” and “Closed”.

Once subjects are removed, or an offer without subjects is accepted, the status will move to “Pending.” The listing will then move to the “Closed” status on the completion date.

In most cases, this will be the end of the transaction cycle.

Expired

Sometimes sales collapse after an accepted offer.

If it collapses before the listing’s expiry date, the status will move back to “Active”.

If it’s after the expiry date, the status will move to the “Expired” status.

The BC NDP government has followed through on a February 2024 budget promise and introduced legislation to tax home flipping, beginning in 2025.

Bill 15 2024: Budget measures implementation (Residential Property (Short-term holding) Profit Tax) Act, known as the home flipping tax, applies to income from the sale of a property, including presale contracts, in BC if the property was owned for less than 730 days.

Types of properties

The tax will apply to income earned from the sale of:

• residential properties with a housing unit;

• properties zoned for residential use; and

• the right to acquire properties, such as the assignment of a purchase contract for a pre-build condo building.

Presale contracts

If your client enters into a presale contract to buy a property under development, and buys the property – they close on the property once it is complete, for the purposes of the two-year window of the tax – they’ll be considered to have acquired it on the date they entered into the presale contract.

If your client is assigned a pre-sale contract and then closes on the built property, the acquisition date is the date they were assigned the contract.

When your client assigns a presale contract to another person within two years of entering into the presale contract, they’ll pay tax on any income received from the assignment.

Tax amount

The tax applies to:

• individuals or companies selling property; and

• net taxable income from the sale of taxable property that was owned for less than 730 days.

The tax is:

• 20 per cent tax on profits of homes sold within a year of purchase.

• 10 per cent if sold after 18 months.

• Not applied if your client sells after two years.

Key dates

The tax is effective on January 1, 2025. Residential property bought before this date may be subject to the tax if sold on or after January 1, 2025 and owned for less than 730 days unless an exemption applies.

For example:

• If your client purchased a property on May 1, 2023, and sold the property on January 31, 2025, income earned from the sale of the property would be taxable.

• If your client decided not to sell the property until June 1, 2025, then income earned from the sale would not be subject to the tax since your client owned the property for more than 729 days.

The property seller may be a BC resident or a resident anywhere else in the world.

Exemptions

There are exemptions for:

• life circumstances including separation or divorce, death, disability or illness, relocation for work, involuntary job loss, a change in household membership, personal safety, or insolvency; and

• those adding to the supply of housing or engaging in real estate development and construction.

The tax doesn’t apply to Indigenous Nations, charities, governments and government-owned corporations, and non-profits.

Primary residence deduction

If your client sells their primary residence and they owned the property for less than 730 days, they may qualify for a deduction of up to $20,000 from their taxable income if:

• they owned the property for at least 365 consecutive days before they sold it; or

• the property includes a housing unit that they lived in as their primary residence while they owned it.

If your client sells a portion of their interest in the property, their primary residence deduction amount will be proportionate to that interest.

More information available

The Ministry of Finance has provided more details on their website, including how the tax is calculated and additional examples related to pre-sales.

Note: the BC home flipping tax is NOT the federal property flipping rule, which is a separate federal tax.

Questions?

If you have questions about the BC flipping tax, contact Harriet Permut, director of government relations at hpermut@gvrealtors.ca. 

Learn more

• Learn more about the BC home flipping tax

• Read Bill 15 2024: Budget measures implementation (Residential Property (Short-term holding) Profit Tax) Act

The number of Metro Vancouver1 homes listed for sale on the MLS® rose nearly 23 per cent year-over-year, providing more opportunity for buyers looking for a home this spring.

Sales

The Greater Vancouver REALTORS® (GVR)2 reports that residential sales3 in the region totalled 2,415 in March 2024, a 4.7 per cent decrease from the 2,535 sales recorded in March 2023. This was 31.2 per cent below the 10-year seasonal average (3,512).

Listings

There were 5,002 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in March 2024. This represents a 15.9 per cent increase compared to the 4,317 properties listed in March 2023. This was 9.5 per cent below the 10-year seasonal average (5,524).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 10,552, a 22.5 per cent increase compared to March 2023 (8,617). This is 6.3 per cent above the 10-year seasonal average (9,923).

GVR Stats Package for March 2024

SURREY, BC –Home buyers in the Fraser Valley have more choice heading into the spring market with inventory levels for March at the highest they’ve been in the past five years.

However, March sales were slower than anticipated with 1,395 transactions recorded on the Fraser Valley Real Estate Board’s Multiple Listings Service® (MLS®), a 13 per cent increase over February, but still 31 per cent below the 10-year average. Sales were the second lowest recorded for a March in a decade. Active listings were 6,197, up by 11 per cent over last month and by 37 per cent over March 2023.

FVREB Stats Package for March 2024

In an effort to increase the supply of long-term residential housing, the BC Government has introduced the Short-Term Rental Accommodations Act) which will have substantive effects on many individual homeowners.

In brief, the legislative changes include:

1. Limiting short-term rentals to the host’s principal residence plus one secondary suite or accessory dwelling unit (ADU) in most major BC communities (populations of 10,000 or more or adjacent communities) effective on May 1, 2024.

2. Empowering regional districts to license short-term rentals located outside municipalities.

3. Data sharing from short-term rental platforms is required to monitor and enforce the rules.

4. Removal of legal non-conforming use or grandfathering of historical short-term rental use.

5. Creation of a provincial registry for short-term rentals and a compliance and enforcement unit.

These rules exclude hotels, motels, strata hotels, timeshares, fishing lodges, First Nations reserve lands, and modern treaty lands (unless those First Nations opt in).

Importantly, the new rules serve as a baseline for the province, but they do not supplant stricter municipal restrictions; for example, the City of Kelowna has recently removed short-term rentals as a secondary use for all zones.

The new legislation will affect real estate across British Columbia. Here are some common questions from REALTORS® across the province:

Q: How do we advise clients who currently own short-term rental accommodations?

A: Clients should be aware that the new provincial Short-Term Rental Accommodations Act will come into force as of May 1, 2024. This Act is in addition to any municipal rules and strata bylaws that already apply. Clients should examine whether their use complies with the new law.

Q: I have a listing in a small or resort municipality; how do I know if the new short-term rental accommodations principal residence requirement applies here?

A: There are several exemptions: small and resort municipalities, mountain resort and electoral areas (including the Gulf Islands), and most municipalities with a population under 10,000 people (except those adjacent to larger municipalities; e.g., Highlands, Belcarra, Anmore, Qualicum Beach, Peachland). Small exempt municipalities, which are initially exempt from the principal residence requirement in the legislation, may opt in. Realtors should check the list of included and exempted municipalities as part of their due diligence (see the full list here).

Q: How do I advise buyers looking to purchase short-term rental accommodations?

A: The current housing shortage in British Columbia is prompting governments at all levels to respond in various ways. Clients should be aware that laws are constantly changing, and current permitted uses may change. Buyers looking to purchase short-term accommodations should be aware that a number of laws have been recently amended to address the housing shortage, including local bylaws, provincial laws (e.g., Short-Term Rental Accommodations Act, Speculation and Vacancy Tax, etc.), and federal laws (e.g., Foreign Buyers Ban, Underused Housing Tax, etc.), which may affect their intended and future uses. REALTORS® should draft specific subject conditions to allow buyers to do the legal due diligence necessary to determine if the target property will support short-term rental use.

Q: One of my clients purchased a pre-sale condo and intends to use it for short-term rentals. With the introduction of the legislation, do they now have a new right of rescission for a material change after their initial 7-day recission right has passed?

A: This will depend on the nature of the pre-sale condo development, the contract, and the disclosure statement applicable for that unit. Developers are required to provide continuous and accurate disclosure, and affected buyers should be advised to seek immediate legal advice specific to their situation.

Q: If I am listing a property that is currently a short-term rental, do I need to disclose the change in the law?

A: The change in law has been published and advertised by the government; therefore, this would not be considered to be a material latent defect and would not require separate Rule 59 disclosure. There may be practical reasons that a REALTOR® and a client may choose to provide this as prudent additional disclosure (for example, to ensure a smooth closing); however, this should only be done with your client's specific direction.

Q: A local strata building wants to petition the mayor to “opt-out” of these provisions. Are they able to do so?

A: While the legislation has “opt-out” mechanisms for local government where the rental vacancy rate is 3 per cent or higher for two or more years, these provisions are limited and only apply to a geographic area, not a specific building or parcel. There is no mechanism in the legislation for a single property or building to be exempted, even if the local government desires this. 

These legislative changes will affect buyers, sellers, strata corporations, and developers differently depending on each client's unique circumstances. As these are general guidelines only, REALTORS should ensure that their clients obtain legal advice specific to their respective clients' circumstances.

More information on how these changes affect BC's real estate is available from BCREA and BC Financial Services Authority.

Listing and buyer agency contracts are terms we use so often we may not give them much thought. But it’s important to remember that they are contracts. The words in them have meaning, and describe the rights and obligations of the parties. Our familiarity with them may, just sometimes, lead us to forget what they mean or take them for granted. That’s a risk, as we all know. 

Take a listing contract, for example. The parties to that contract are the seller and your brokerage, not you. You’re appointed as the designated agent for the seller. 

Your managing broker, as the representative of the corporate entity known as your brokerage, “owns” the listing. This means your managing broker has complete discretion, by virtue of the brokerage policy manual and your independent contractor agreement, to decide what to do with the listing contract should a seller demand it be cancelled. Ditto for a buyer agency contract.

Sometimes, no matter how hard you’ve tried, there isn’t a buyer willing to come to your seller’s party. Despite the advertising, showings, and all the other work you’ve done, there’s no buyer knocking on the seller’s door.

"That can be frustrating for the seller, not to mention to you and your bank account. Sometimes, this can lead to a frayed agent-seller relationship. Sometimes, despite your best efforts, the seller will tell you they want the listing contract cancelled so they can try their luck with someone else."

That’s understandable, but there’s no early cancellation of contract language in either the standard listing form or buyer agency contract. This means the seller can’t cancel you without your (more technically, your managing broker’s) consent, and you can’t cancel your seller (or buyer) without their consent. 

As you can imagine, we don’t often hear from sellers or buyers who are unhappy that their agent is trying to cancel them.

When we do hear from sellers, the conversation often goes like this: “I want to cancel my listing, but your member won’t cancel it.”

We point out they’re in a contract with the brokerage and suggest they speak to your managing broker. We sometimes add that Greater Vancouver REALTORS® (GVR) isn’t a party to the contract and therefore, can’t cancel it. Feathers can get ruffled.

What are the options? Let’s take a look. (A GVR managing broker suggested I write about this topic.)

First, if you and your managing broker agree to it, the listing can be cancelled. Maybe you have good business reasons for saying goodbye. But you don’t have to cancel it early if you don’t want to. A refusal to cancel isn’t usually grounds for a professional conduct complaint—although the underlying reason for the cancellation demand might be. That’s a discussion for another day.

Which brings me to the two types of cancellation.

The first is a “standard” cancellation of listing contract. The standard form contains a clause saying that if the property sells after the cancellation, your right to collect the commission, as specified in the listing contract, remains alive until 60 days passes or the original contract expires, whichever comes first. If the seller really doesn’t want to sell and wishes to take the property off the market, then this clause shouldn’t concern them. Process the cancellation and move on. 

The second type of listing cancellation is an “unconditional release,” which means exactly what it says. When signed, you and the seller no longer have any rights or obligations under that contract. It’s dead and buried, which may be something you want.  

"But consider this: signing an unconditionally released contract means there’s no going back to claim a commission. This would be a pain if a buyer's agent had shown your listing with that buyer and later contracts with the seller directly to make a deal. It’s possible the buyer agent could want you to go after your seller for a commission, which you have now unconditionally waived. A tad messy, no? Think about this before you consider giving someone an unconditional release of listing."

There's a third option if your seller client is unhappy. If you agree to part company but don’t want to extinguish your rights under the listing contract by unconditionally releasing (or cancelling) it, you could offer the seller a “transfer of listing.”

With such a transfer, you agree to transfer a live listing contract to someone else, without affecting the rights of the parties. When I was a broker, I pushed for a transfer rather than an unconditional release, all day long. It’s up to you and your client (and the transferee brokerage) whether you negotiate a fee of some kind in return for agreeing to a transfer.

Top tip: Size does, indeed, matter

A longtime member writes: “[Here’s] something to address in your articles: I’m not sure if this might cause a legal issue if someone wanted to pursue it. Writing on a contract or subject removal that has a font so small it takes a magnifying glass to read it. This means a REALTOR® can’t read it with the naked eye, [nor can] the client and, at completion, a lawyer/notary. I’m seeing this more and more. Trying to stuff everything on one page on WEBForms just keeps shrinking the font to unreadable levels. I currently received a subject removal that had to be magnified to the max to barely read it.”

Kim's comment:

Vanity stopped me from getting reading glasses for many years before I finally gave in and bought some. Now I have a pair of cheap readers in every place I sit. If you do the same it means you never lose your glasses because you take them off and put them down as you leave your chair, confident that you’ll have the use of another pair in all the different places you sit, as you read something.

Notwithstanding that great plan, I still end up in situations where I am squinting at a screen or a page, trying to figure out what it says. That might be okay when choosing a movie to stream, but it isn’t okay when you’re helping clients with a contract involving big life decisions, like moving homes.

So in answer to this member, I’d say, I hear you. It’s annoying to see text reduced in size to fit into a form field. It’s not only annoying, it’s a liability risk for all concerned, including you. For members who haven’t yet reached an age where they’re reminded everyday that their eyes aren’t what they once were, can I suggest on behalf of the member, please do your clients, your colleagues, and someone’s else’s clients a favour. Make your font size big enough to read without an electron microscope.

Are you looking for housing statistics you can share with your clients? How about reports and market forecasts?

Then you need to check out Greater Vancouver REALTORS®’ (GVR) new Economics Web App at economics.gvrealtors.ca. You can also access it under the Market Watch section at gvrealtors.ca.

Using this app, you can find everything the GVR Economics team produces all in one spot, including:

• Forecasts and in-depth analyses for both the residential and commercial markets.

• Recordings of economics-focused presentations and events hosted by GVR.

• Analytics for residential and commercial markets.

• Downloadable data for the residential and commercial markets.

• Branded residential market charts you can use in presentations and reports.

• And more!

 We’ll be adding new content and features regularly, so be sure to bookmark the page and check back often.

Take a look around and let us know what you think!

While Metro Vancouver1 home sellers appeared somewhat hesitant in January, new listings rose 31 per cent year-over-year in February, bringing a significant number of newly listed properties to the market.

Sales

Greater Vancouver REALTORS® (GVR)2 reports that residential sales3 in the region totalled 2,070 in February 2024, a 13.5 per cent increase from the 1,824 sales recorded in February 2023. This was 23.3 per cent below the 10-year seasonal average (2,699).

"While the pace of home sales started the year off briskly, the pace of newly listed properties in January was slower by comparison. A continuation of this pattern in February would have been concerning, as it could quickly tilt the market towards overheated conditions. With new listings up about 31 per cent year-over-year in February, this will relieve some of the pressure that was building in January and offer buyers more choice as we enter the spring and summer markets." - Andrew Lis, REBGV director of economics and data analytics

Listings

There were 4,560 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2024. This represents a 31.1 per cent increase compared to the 3,478 properties listed in February 2023. This was 0.2 per cent below the 10-year seasonal average (4,568).

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 9,634, a 16.3 per cent increase compared to February 2023 (8,283). This is three per cent above the 10-year seasonal average (9,352).

View the GVR Stats Package for February 2024

SURREY, BC – Home sales in the Fraser Valley posted a second consecutive bump in February as new listings continue to rise and trend slightly above the 10-year seasonal average.

The Fraser Valley Real Estate Board recorded 1,235 transactions on its Multiple Listing Service® (MLS®) in February, a 32 per cent increase over January but still 21 per cent below the 10-year average for sales in the region. New listings increased to 2,797 in February, up 18 per cent from January and 4 per cent above the 10-year average.

“There is somewhat of a buzz in the market right now,” said Narinder Bains, Chair of the Fraser Valley Real Estate Board. “We are seeing new listings come onto the market and REALTORS® continue to see more traffic at open houses, however buyers are still exercising caution. We aren’t out of the woods just yet, but the signs are pointing to a further increase in activity as we head into spring.”

Active listings in February were 5,561, up by 14 per cent over last month and up by 26 per cent over February 2023. With a sales-to-active listings ratio of 22 per cent, overall market conditions are edging into a seller’s market. The market is considered balanced when the ratio is between 12 per cent and 20 per cent.

“All indications suggest we will see the Bank of Canada’s overnight rate begin to decrease mid-year, which is encouraging for buyers and sellers,” said FVREB CEO Baldev Gill. “With that confidence and the spring market on the horizon, we recommend anyone looking to buy or sell to seek the knowledge and guidance of a professional REALTOR® who can provide detailed analysis and intimate knowledge of the local market.”

The average number of days homes are spending on the market is dropping, with single-family detached homes spending 35 days on the market, down from 44 days in January, apartments spending 29 days on the market, down from 41 days in January and townhomes moving more quickly at 28 days, down from 33 days on the market in January.

After six months of decreases, overall Benchmark prices posted a slight bump in February, edging up 0.9 per cent from January and up 4.8 per cent over February 2023.

View the FVREB Stats Package for February 2024

Buyers may be unaware of the differences between purchasing a newly built home from:

• a developer, subject to the provisions of the Real Estate Development Marketing Act;

• a residential builder licensed with the Homeowner Protection Office; or

• an owner-builder under an Owner Builder Disclosure Notice.

There are different benefits and pitfalls for buyers and for REALTORS® in dealing with each of these three categories of sellers. Additionally, there are different considerations for REALTORS® when dealing with each of these categories of builder or homeowner.

This article will focus on considerations for REALTORS® acting for buyers or sellers of homes built and sold by owner-builders. A good starting point for all REALTORS® is reading the provisions of the Homeowner Protection Act and Regulation, and the Regulatory Bulletin on Buying or Selling an Owner-Built Home.1

To sell an owner-built home, the owner-builder must obtain an occupancy permit and then occupy the house for at least one year. The owner-builder cannot list, sell, or rent the new home during that one-year period unless they have obtained BC Housing’s permission to do so on account of hardship.

If less than ten years have elapsed since the date of the occupancy permit, the owner-builder must give any prospective buyer an Owner Builder Disclosure Notice before entering into an agreement for the sale of the home. BC Housing will not release the Owner Builder Disclosure Notice if less than a year has passed since the occupancy permit.

Note that anyone who buys an owner-built home, but then re-sells it within the ten-year period, is still required to provide the Owner Builder Disclosure Notice.

The Land Title Office notifies BC Housing any time the title to an owner-built home is transferred. BC Housing can take enforcement action against the seller if the sale happens without following the letter of the law. Such enforcement action can include compliance orders, monetary penalties, convictions under the Homeowner Protection Act, etc.

When listing a home within ten years of the date of the occupancy permit, a REALTOR® will want to inquire whether an owner-builder originally built the house and if at least one year has passed since the date of the occupancy permit. If so, the Owner Builder Disclosure Notice must be given to any prospective buyers before entering into any agreement to sell the home. Listing the home for sale prior to the expiry of the one-year period or failing to provide the Owner Builder Disclosure Notice, can have significant BC Financial Services Authority disciplinary consequences for the seller’s agent2 and can give rise to potential civil liability to the buyer and/or seller.

If the home was built by a licensed residential builder, a REALTOR® may wish to confirm with the Homeowner Protection Office that the builder’s licence is still active and that there is valid warranty coverage for the home.

Similarly, when representing buyers interested in purchasing a relatively newly built home, REALTORS® should request documents related to the identity of the builder of the home and any warranty policy that might apply.

Interested buyers can check the status of a new home in the New Homes Registry at bchousing.org. The registry provides information for homes built on or after November 19, 2007, such as whether a licensed residential builder built the home and has a policy of home warranty insurance; or whether it was built without warranty insurance under an exemption such as an Owner Builder Authorization.

An owner-builder’s obligations to a subsequent buyer are similar to those of a licensed residential builder under a 2-5-10 home warranty insurance policy.3 However, a licensed residential builder’s warranty insurance policy is underwritten by an insurance company. Unless the owner-builder has specifically purchased such coverage with an insurance company, an owner-builder is liable personally and directly to subsequent buyers of the owner-built home for defects that a 2-5-10 home warranty insurance policy would have covered. Such personal liability might be difficult to enforce if the owner-builder no longer resides in BC, has no assets to cover any judgment made against them, or has died.

When purchasing a home built by a licensed residential builder, a buyer will likely want to know whether the builder’s licence is still active, and the expiry dates and terms of the warranty coverage. A buyer may also wish to know if any outstanding warranty claims made by the seller have not yet been resolved. REALTORS® will want to discuss these issues with buyers early on in the process to allow adequate opportunity to investigate and/or negotiate suitable terms.

Don’t forget homes built in the last ten years or so can raise additional issues for consideration before listing and/or entering into a Contract for Purchase and Sale. The ten-year deadline usually starts from the date of the occupancy permit, which can sometimes be years after the home was substantially built. The Homeowner Protection Office is a good start for any inquiries. Licensees may also wish to take the Real Estate Board of Greater Vancouver’s course on the Homeowner Protection Act and to review  BC Financial Services Authority’s Knowledge Base article on this topic.