Common Conditions in an Offer to Purchase a Home in New Brunswick

When you write an offer on a home, conditions are the clauses that let you back out, or change the deal, if something important is not confirmed. For a first-time buyer they are one of the main protections available.

This article walks through conditions that are commonly used, how deadlines generally work, and what the rules say about your deposit if a deal falls apart. Most of what happens depends on the wording of your agreement, so have it reviewed before you sign.

This article covers the law of New Brunswick.

What a condition does

A condition makes the deal depend on something happening by a set date. If it is satisfied, the deal moves toward closing. If it is not, the agreement usually says whether you may end it or whether it carries on.

Because the effect comes from the agreement itself, the exact words and dates are important. Vague wording can lead to disagreements, so ask for each condition to say what must happen, by when, and who may waive it.

Conditions buyers commonly use

• Financing: the offer depends on you getting a mortgage on acceptable terms.
• Inspection: the offer depends on a home inspection with results you are satisfied with.
• Sale of your current home: the offer depends on your own property selling first.
• Lawyer review: the offer depends on your lawyer approving the agreement and the title.
• Well water testing: for a home on a well, the offer depends on water test results.
• Condominium documents: for a condo, the offer depends on your review of the declaration, by-laws and financial records.

No rule requires any of these conditions to be included. They are a matter of contract between you and the seller, and which ones suit you depends on your situation.

Well water and condominium points to consider

For a home with a well, the provincial guidance recommends testing for bacteria (total coliforms and E. coli) twice a year. It also recommends testing for inorganic compounds such as arsenic, uranium, fluoride and nitrate when a well is first drilled, before drinking the water, and every two years. Use an ISO 17025 accredited lab.

Arsenic has a Maximum Acceptable Concentration of 0.01 mg/L in drinking water, and it can only be detected by laboratory testing.

For a condominium, owners pay common expenses in the proportions set by the declaration, and unpaid amounts can become a lien on the unit. The corporation must keep a reserve fund, and a reserve fund study is required every 10 years for more than 10 units. Each owner must comply with the Act, the declaration, the by-laws and the rules. These are good reasons to build a document review into your offer.

Deadlines, deposits and unmet conditions

Deadlines are set by your agreement, not by a general rule.

A cheque received with an offer need not be deposited until the offer is accepted, and then it must be deposited without delay. An agent who receives a deposit must hold it as trustee for all parties according to their rights under the offer or contract, not as agent for one party. An agent may act for one party and receive the deposit for that party only if the contract says so and every other party acknowledges it in writing.

No money may be drawn from an agent's trust account except in accordance with the terms on which it was received. If the parties dispute the deposit, the agent may, and if necessary to resolve the dispute shall, pay it into court on an interpleader. Who is entitled to the deposit depends mainly on your agreement and the facts.

What to do next

• Decide which conditions matter to you before you meet with your agent.
• Check that each condition states what must happen and the deadline.
• Budget for costs beyond the price, including transfer tax of 1% of the greater of the price or the assessed value.
• Remember that property tax is paid by the person in whose name the property is assessed.
• Have a lawyer review the agreement before you sign, and again before any condition is waived.

Frequently asked questions