Picture this: you’ve sold your house in Metro Vancouver (or Kelowna, or Victoria) for $1,400,000. The buyer removed all their subjects, the deposit of $70,000 is sitting in trust, and you’ve already bought your next home based on this closing.
Then, two days before completion, you get a phone call: “Sorry… we can’t close. Interest rates went up / we lost our job / we changed our mind.”
Welcome to one of the most expensive mistakes a buyer can make in British Columbia.
1. The Deposit Is Almost Certainly Gone
In 99% of cases using the standard BC Contract of Purchase and Sale, the deposit is forfeited in full to the seller — no questions asked, no proof of loss required.
BC courts have repeatedly upheld this for decades. A deposit of 5–10% is considered reasonable and enforceable (Tang v. Zhang, 2013 BCCA). Even if the seller resells the property the next week for the same price or higher, the buyer still loses the entire deposit.
2. The Seller Can (and Usually Does) Sue for More
The contract contains the magic phrase “forfeited without prejudice to other remedies.” Translation: the seller keeps the deposit and can still sue the buyer for any additional losses.
Common additional damages claimed:
- Difference between your contract price and the eventual resale price
- Real estate commission on the second sale
- Legal fees for both transactions
- Property taxes, strata fees, and mortgage interest paid while the house sat empty
- Legal costs of suing the buyer
- Interest on the unpaid purchase price from the completion date until resale
3. The Numbers Can Get Brutal — Fast
Let’s run a realistic 2025 scenario in Greater Vancouver:
| Item | Amount |
|---|---|
| Original price | $1,500,000 |
| Deposit forfeited | $75,000 |
| Resale price 4 months later | $1,380,000 |
| Price deficiency | $120,000 |
| Carrying costs (4 months) | $24,000 |
| Second commission (4%) | $55,200 |
| Legal fees | $12,000 |
| Total judgment against buyer | $286,200 |
And yes — the buyer is on the hook for every dollar, even if they never took possession.
4. “But the Market Went Down — That’s Not My Fault!”
The courts have consistently ruled that a buyer assumes the risk of market changes once subjects are removed. If you sign a contract to buy at $1.5M, you buy at $1.5M — even if every identical house on the street is suddenly worth $1.3M.
5. Is There Any Way Out for the Buyer?
Very few — and none of them easy:
- Prove the deposit is an “unconscionable penalty” (almost impossible under 15%)
- Prove fraud or misrepresentation by the seller
- Negotiate a mutual release before the seller resells (leverage disappears fast once the property is relisted)
What This Means for Buyers in BC
Failing to complete a residential purchase in British Columbia is financially catastrophic for the buyer in almost every case. A $75,000–$150,000 deposit is usually the starting point.
If you’re a buyer and you’re even slightly unsure, do not remove your subjects. Once they’re gone, you’re legally and financially locked in — and walking away can cost you hundreds of thousands of dollars and can damage your credit for years.
Have a specific situation where a buyer is threatening not to close (or you’re the buyer who can’t close)? Drop a comment or send me a message — the sooner you act, the more options you have.
Contact Beck, Robinson & Company today.
This post is for general information only and does not constitute legal advice. Every case turns on its specific contract wording and facts. Consult a BC real estate lawyer immediately if you’re facing this situation.