Real Estate Conditions Explained: Financing, Home Inspection, Status Certificate, and Sale of Property

What a condition does on an Ontario offer

On a standard Ontario agreement of purchase and sale, a condition is a pause button with a deadline. Until it is fulfilled or waived in writing, the deal is not firm. Miss the deadline on a condition precedent and the agreement usually dies. The deposit is then returned under a mutual release, not because someone changed their mind.

Most resale offers use four buyer conditions: financing, home inspection, condo status certificate review, and sale of the buyer's current property. The wording lives in Schedule A. The dates live on the face of the form. Both matter.

A Toronto real estate lawyer reads those clauses before the irrevocable expires, because fixing a bad condition after acceptance is a favour, not a right.

Financing condition

The financing condition lets the buyer walk if a mortgage on satisfactory terms does not come through by the condition date. "Satisfactory" is usually the buyer's honest judgment of the lender's terms, not a blank cheque to shop forever.

Typical windows run about five to ten business days, depending on the lender and how busy the market is. That is negotiated, not fixed by statute. The buyer still needs a real application in motion. Waiting until day four to call a broker is how conditions blow up.

When the lender approves the loan the buyer wanted, the clean paper is usually a notice of fulfillment. A waiver says the buyer is dropping the protection even if the condition is not fully met. Agents mix those up. The difference is explained in removing conditions on an APS.

Financing is not the same as the deposit. The deposit already sits in trust. Financing is about whether the rest of the purchase funds will fund on closing.

Home inspection / property inspection condition

An inspection condition gives the buyer time to hire a home inspector and decide whether the property is acceptable. It is how buyers deal with patent defects that seller disclosure does not have to volunteer.

The window is often three to seven business days. Book the inspector the day the offer is accepted. A weekend irrevocable with a three-day condition and no inspector booked is a paper condition.

If the report is clean and the buyer wants to proceed, fulfillment is the usual route. If the report shows problems and the buyer still wants the house without renegotiating, a waiver drops the condition. If the buyer wants a price credit or a repair, that is an amendment, not a silent waiver.

The condition only helps if Schedule A says what "satisfactory" means and who decides. Vague wording invites a fight about whether the buyer acted in good faith.

Condo status certificate condition

On a condominium purchase, the status certificate condition lets the buyer's lawyer review the corporation's package before the deal firms up. The certificate is the building's financial and legal snapshot, not a home inspection of the unit.

Under section 76 of the Condominium Act, 1998, the corporation must deliver the certificate within ten days of a proper request and fee. The fee is capped at $100 including HST. That ten-day delivery clock can eat a short condition period. Order the package the day the offer is accepted.

A useful condition period is long enough for delivery plus lawyer review. Many files use roughly ten business days for the corporation plus several more for review, but the number is whatever Schedule A says. The status certificate guide walks through what the package actually contains.

Special assessments, reserve-fund holes, rule fights, and insurance gaps show up here. They do not show up on a walkthrough.

Sale of buyer's property condition

This condition makes the purchase depend on the buyer selling their current home by a set date. It protects a buyer who cannot carry two properties or who needs the sale proceeds to close.

Sellers dislike it in a hot market because the buyer's timing controls the file. The usual trade-off is an escape clause: if the seller receives another acceptable offer, the first buyer gets a short window (often 24 to 72 hours) to waive or fulfill and go firm, or step aside.

Windows are highly negotiable. Thirty to ninety days is common talk. The real number is whatever both sides sign. Write the escape-clause mechanics clearly. Ambiguous escape language creates two angry files instead of one clean exit.

Condition dates, waiver, fulfillment, and a firm deal

A conditional deal is still a contract. It is just not unconditional yet. A firm deal means every condition is gone. After that, walking away is breach, not due diligence.

Most Ontario residential conditions are drafted as conditions precedent. Silence past the deadline usually kills the deal. A condition subsequent works the other way: the deal stays alive unless someone objects in time. The label matters. See condition precedent vs condition subsequent.

Written notice has to land by the deadline. OREA Form 124 is the notice of fulfillment. OREA Form 123 is the waiver. Email habits do not replace the form the agreement calls for. Time is of the essence on these files.

What the lawyer actually does during the condition period is review the APS language, order and read the status package on a condo, watch the financing and inspection clocks, and make sure the right notice goes out before 11:59 p.m. on the right day.

Schedule A is where the wording lives

The standard OREA face page has the dates. Schedule A has the sentences that decide whether a condition actually protects anyone. Copy-paste from the last deal is how buyers get a status condition with no time for the corporation's ten days, or a financing clause the lender's commitment cannot satisfy.

• Name who benefits from the condition and how notice is delivered.
• Set a real clock, including weekends and holidays if that is what you mean.
• Say whether fulfillment, waiver, or both can firm the deal.
• On sale-of-property, spell out the escape clause and the buyer's response window.
• On status certificates, tie the clock to receipt of the package, not only to acceptance day, when that is the deal.

Conditions are not scare tactics. They are the ordinary way Ontario buyers buy time to check money, the house, the condo corporation, and their own sale. Get the four clauses right before anyone signs.

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