Chapter 06
Conditions & Due Diligence
After an offer is accepted, the contract usually enters a condition period. Understanding subjects — and the due diligence behind them — helps you make an informed decision.
Common subject clauses
Subject conditions (or subject clauses) are requirements written into an offer that must be satisfied for the contract to become firm. Common examples include:
- • Financing — you securing a mortgage.
- • Inspection — you reviewing the property's condition.
- • Sale of another property — you needing to sell your current home first.
- • Strata document review — for strata properties.
- • Title review — reviewing title and charges.
The condition period
The condition (or subject) period is the window during which your conditions must be satisfied or removed by a specified date. During this time the contract is not yet firm. If you remove subjects, the contract becomes binding. If you do not remove them, the contract typically ends and the deposit is usually returned, subject to the terms of the contract.
Before you remove conditions
Before You Remove Conditions
Due diligence is the process of investigating a property before your conditions are removed and the contract becomes firm. Appropriate due diligence varies by transaction — what is relevant for one property may not be for another.
A professional inspection can identify visible conditions and concerns. It is one input into your decision and does not guarantee the absence of defects.
Confirming your mortgage is in place before removing a financing condition. Pre-approval is not a guarantee of final financing.
Reviewing available documents such as the Property Disclosure Statement, strata documents where applicable, and any reports provided.
Reviewing title and any charges, easements, covenants, or restrictions that may affect the property. Your lawyer or notary can help interpret these.
For strata properties, reviewing the Form B, minutes, financials, bylaws, depreciation reports, and insurance information.
Confirming you can obtain the insurance you need (and that your lender requires) before completion.
Understanding what the seller has disclosed about the property's condition and asking questions about anything unclear.
Any legal questions about the contract, conditions, title, or your obligations. A lawyer or notary can provide advice specific to your transaction.
Depending on the property, you may wish to investigate permits, zoning, environmental matters, or other specifics relevant to you.
Appropriate due diligence varies by transaction. Encourage yourself to consult the appropriate professionals — a real estate professional, a lawyer or notary, a lender or mortgage professional, and qualified inspectors — to understand what is relevant for your situation.
Questions about your conditions?
Talk to Roland