Conditions in an Ontario Offer to Purchase: What First-Time Buyers Should Include

When you make an offer to buy a home in Ontario, you do not have to accept the risk of the unknown all at once. Conditions — also called conditional clauses or subject-to clauses — are provisions in the Agreement of Purchase and Sale that allow you to verify key facts about the property or your financing before you are legally bound to complete the purchase.

For first-time buyers, understanding which conditions to include and what they actually protect you from is one of the most important steps in a real estate transaction.

What Is a Condition?

A condition is a term in an Agreement of Purchase and Sale (APS) that makes the deal conditional on a specified event occurring within a defined time period. If the condition is not satisfied (or waived) by the deadline, either you or the seller — depending on whose benefit the condition is for — can terminate the agreement without consequence.

When a condition is in your favour and goes unsatisfied, you can walk away and recover your deposit in full. This is the core value of conditions for buyers.

Once a condition deadline passes — whether because you formally waived the condition or let the period expire — the right to terminate on that basis is gone.

The Three Most Important Conditions for First-Time Buyers

1. Condition on Financing

A financing condition (sometimes called a mortgage condition) gives you a period — typically five to seven business days, though the exact timeframe is negotiated — to obtain confirmed mortgage financing for the property.

It protects you if:

• Your lender declines the mortgage after reviewing the specific property (the appraisal comes in low, for example).
• Your lender finds an issue with the property's legal status.
• Your financial situation changes between pre-approval and the offer.

Important: A financing condition is not an open-ended escape hatch. It should be exercised in good faith — meaning you have genuinely applied for and been refused financing, not that you changed your mind. Misusing a financing condition to back out for non-financing reasons can expose you to legal risk.

2. Condition on Home Inspection

A home inspection condition gives you the right to have a qualified professional inspect the property during a set period (typically five to seven days). If the inspection reveals defects that are unacceptable to you, you can terminate the agreement.

Home inspections commonly identify:

• Roof, foundation, and structural issues
• Electrical deficiencies (e.g., outdated knob-and-wiring, overloaded panels)
• Plumbing problems or galvanized pipes
• HVAC condition and remaining service life
• Signs of moisture, mold, or past water infiltration
• Upgrades done without permits

A written inspection report gives you negotiating leverage even if you do not terminate — you can request the seller address issues or reduce the price.

Note: In competitive markets, buyers sometimes waive inspection conditions to win multiple-offer situations. This is a financial risk, particularly with older homes. If you waive an inspection entirely, you assume all unknown defects as-is.

3. Condition on Status Certificate (Condominiums Only)

If you are buying a resale condominium, you should include a status certificate condition. A status certificate is a package of documents produced by the condo corporation that discloses:

• The unit's current common expense (maintenance fee) amount and any arrears
• The condo corporation's budget and reserve fund (the fund set aside for major repairs)
• Any special assessments levied or anticipated
• Outstanding litigation involving the corporation
• The condo's declaration, by-laws, and rules

Your lawyer reviews the status certificate for red flags — an underfunded reserve, pending special assessments, or unusual rules that affect use of the unit. The condition period is typically two business days after you receive the certificate, so request it as soon as your offer is accepted.

Other Conditions to Consider

Sale of Existing Home

If you own a property and need to sell it first, you can include a condition requiring you to sell your existing home within a defined period. This is called a sale of existing property condition or "SOP condition." Sellers may be less willing to accept this in a hot market, but it is a legitimate protection if you cannot carry two properties.

Lawyers' Approval

Some offers include a condition allowing a lawyer to review and approve the APS within a short window (often 24–48 hours). This gives your lawyer a chance to flag unusual terms before the deal becomes firm.

Condition Periods: How Long Is Normal?

There is no standard time period mandated by law. Negotiation determines the length. Common practice:

• Financing condition: 5–7 business days
• Home inspection: 5–7 business days
• Status certificate: 2 business days after receipt (the corporation has up to 10 days to produce the certificate, so build this into your timeline)

Sellers prefer shorter conditions. As a buyer, you want enough time to actually complete the review. Do not agree to a condition period so short that you cannot realistically obtain financing approval or schedule an inspector.

Waiving vs. Satisfying a Condition

When the condition period is complete and you are satisfied (financing approved, inspection acceptable, status certificate clean), you waive the condition by signing a Waiver form. This converts a conditional agreement into a firm deal.

If the condition is not satisfied, you deliver a Notice of Termination or a "not satisfied" notice. The agreement ends, and your deposit is returned.

Never verbally waive a condition. Everything must be in writing and signed before the condition deadline.

Frequently asked questions