The Anatomy of a Condition

Reading Time: 5 minutes

OREA gives every Ontario REALTOR® a database of standard Conditions to use in their offers.

And if you’ve ever taken a minute to really read one, you’ll notice something:

There’s a structure. A formula. A rhythm.

Once you understand how a condition is built, everything gets easier:

→ reading conditions

→ explaining them to your clients

→ spotting when something’s off

→ and drafting a solid one when you need to go custom

So let’s break down on one of the most common: the financing condition.

Standard OREA Financing Condition:

“This Offer is conditional upon the Buyer arranging, at the Buyer’s own expense, a new [type of mortgage] mortgage satisfactory to the Buyer in the Buyer’s sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller not later than [insert date/time] that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option.”

There are four (4) core parts.

1. The Due Diligence

“This Offer is conditional upon the Buyer arranging, at the Buyer’s own expense, a new [type of mortgage] mortgage satisfactory to the Buyer in the Buyer’s sole and absolute discretion”

This is the meat of the condition—it defines the actual due diligence the buyer is completing.

In this case, that means securing financing they’re comfortable with.

The phrase “sole and absolute discretion” matters—a lot.

It gives the buyer room to walk away if the financing terms don’t meet their standards.

But that discretion still needs to stay within the scope of the condition. It’s not a free pass to back out for unrelated reasons—it has to tie back to the financing itself.

2. The Fulfillment

“Unless the Buyer gives notice in writing delivered to the Seller not later than [insert date/time] that this condition is fulfilled..."

This is the instruction on how to fulfill the condition—and it’s critical.

It tells us two things:

• What the buyer has to do (give written notice),
• And exactly when they have to do it (the deadline).

Without this, there’s no clarity on how or when the condition is satisfied. And that’s a problem—especially when you’re dealing with tight timelines or disputes about whether a condition was fulfilled properly.

This is how the buyer officially signals they’re ready to move forward.

3. The Consequence

"...this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.”

What happens if the fulfillment doesn’t happen.

Usually: the deal is null and void, and the deposit is returned. This gives the condition teeth and protects both parties from ambiguity or dragging things out.

4. The Option to Waive

"This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option.”

Who benefits from the condition, and who has the power to waive it.

This wraps up the clause and makes it clear who’s in control of whether this condition sticks around or not.

So what should you take away from all this?

Conditions aren’t just random legalese—they follow a formula.

Each part of the clause has a job to do:

• A protection for the client
• A process for how it’s handled
• A power to waive it when it makes sense

The more you understand that structure, the better you’ll get at using conditions properly.

You’ll be able to explain them with confidence, spot missing pieces in sketchy clauses, and—when the time comes—draft something custom that’s actually solid.

So don’t wing it. Use the templates you’ve been given.

And if you do need to go custom, build with intention—not guesswork.

And yes, loop in a lawyer or your Broker of Record for help when you do.