06
Chapter 06
Conditions & Subject Clauses
After an offer is accepted, the contract usually enters a condition period. Understanding subjects helps you understand certainty.
Common subject clauses
Typical subjects include financing, inspection, and the sale of another property.
- Financing — the buyer securing a mortgage.
- Inspection — the buyer reviewing the property's condition.
- Sale of another property — the buyer needing to sell first.
- Strata document review — for strata properties.
- Title review — reviewing title and charges.
The condition period
A defined window during which the contract is not yet firm.
The condition (or subject) period is the window during which conditions must be satisfied or removed by a specified date. During this time the contract is not yet firm. If conditions are removed, the contract becomes binding. If they are not removed, the contract typically ends and the deposit is usually returned, subject to the terms of the contract.
Subject removal
Removing subjects by the deadline makes the contract binding.
When a buyer removes subjects by the deadline, the contract becomes firm. The number and type of conditions can affect the certainty of an offer — an offer with fewer subjects may carry different certainty than one with several.
Condition terms and their consequences can be complex. Confirm how they apply to your transaction with your real estate professional and a lawyer or notary.