Buyer’s remorse is the dawning realization that a recent purchase may have been a mistake. If it sets in quickly, you can usually take that expensive pair of shoes or gaming console back to the store or return them in the mail for a no-questions-asked refund.
Returning for a refund
It’s pretty common to get out your credit card and buy a product that looks enticing, only to realize later that the purchase was not a good idea. Perhaps you’ve decided it would have been wiser to spend the money on something more sensible, or it’s dawned on you that you can’t really afford the new purchase. Alternatively, perhaps the product just hasn’t lived up to your expectations.
Thankfully all is not lost in such circumstances. The Consumer Protection Act provides Canadians with a range of rights, and in most cases these include the right to return a purchase within a specified ‘cooling off’ period and receive a refund. This is known as the Right of Rescission. The finer details may vary from province to province but these buyer’s remorse rules do offer a degree of reassurance for budget-conscious buyers.
Most retailers offer basic return policies in response to buyer’s remorse rules. Typically purchasers have 30 days in which to return the goods if they have second thoughts. The more expensive the product, the more important it is to use that time wisely.
Large Purchases
Life gets a lot more complicated if the regretted purchase is a house – and yet, this is exactly the situation an increasing number of Canadians have found themselves in this year. Buyer’s remorse in Canada amongst property owners is, of course, at the upper end of the spectrum.
Many home buyers went big during the initial phase of the Covid-19 pandemic, when property was cheap and interest rates were low. Reacting to pandemic lockdowns, they took out large mortgages for sizable new homes, only to find themselves struggling this year as interest rates shot up and those monthly mortgage payments followed suit. This hasn’t only affected property owners whose budgets are strained by rising rates – even people still in the process of buying have started looking for ways to bail out before completion.
Property problems
Realtors in property hotspots like Vancouver and Toronto report a surge in buyers attempting to back out of sales, alongside vendors using legal means to try and force them to complete. It is difficult to back out of an agreed property purchase but legally enforcing an agreement can be expensive and uncertain, and would-be vendors might decide it’s not worth their while.
Investors in property construction have experienced similar concerns, worrying that the new property may not achieve the profits they’d hoped for when they eventually take possession of it and try to sell it on. The inevitable result has seen a slight downturn in the property market. Across the country, sales are dropping off over the last year, while average property prices have fallen.
Provincial regulations
As mentioned, buyers remorse laws are provincial level regulations, and different rules apply to different situations, including the right to cancel a contract. Typically withdrawal or cancellation requires a formal declaration in writing.
Types of contracts with applicable buyer’s remorse rules include:
Buying a new-build condominium
The cooling off period for this type of property purchase runs from the exchange of the sale or disclosure agreements and varies between seven days (in British Columbia and Manitoba) and ten days in Alberta and Ontario.
Buying a timeshare property
Buyers have ten days from the initial sign-up to cancel and don’t need to give a reason. It is also possible to cancel within the first year if the contract is not provided in writing or if it lacks required information.
Gym memberships
Gym membership contracts can be cancelled within five days days of signing in Nova Scotia or British Columbia, while residents of Ontario get a more flexible ten days.
Consumer protection
It’s always a good idea to check the consumer law regulations in your own province before making any major purchases. That way, you can be sure you’re fully prepared should things not go according to plan and enjoy the reassurance of knowing your hard-earned money is safe.
Licensed Insolvency Trustees – help when you need it
When financial matters go wrong it’s important to have access to reliable advice and assistance. Licensed Insolvency Trustees (LITs) are fully trained and regulated financial professionals. They help Canadians just like you find their way out of common money problems like mortgage difficulties, debt and overstretched budgets.
Here at Allan Marshall & Associates, we are a leading firm of fully licensed financial professionals providing debt management services to residents of British Columbia, Alberta, Nova Scotia, New Brunswick and Prince Edward Island. Why not get in touch today? We can help™.
