What Happens If You Miss the Subject Removal Deadline in BC?

The subject date is close, or it has passed, and you have not removed your conditions. Perhaps the lender is slow, the inspection report is late, or the strata documents have not arrived. You want to know whether the deal is over.

The answer depends heavily on your contract's wording and on what the seller does next. This article explains the main possibilities in British Columbia and the practical steps to take.

This article covers the law of British Columbia.

Does the contract end automatically?

Your contract will show the date for your conditions, and you may be wondering whether missing it ends the deal. Whether that happens, and who can act on it, depends on the exact words of your contract.

For that reason, do not assume either that the deal is dead or that it is still alive. Get the contract reviewed right away, ideally by a lawyer, before you or the seller take further steps.

• What exactly each subject says and who it was meant to benefit.
• The exact date and time by which each subject had to be removed.
• Whether the contract says what happens if a subject is not removed in time.
• Whether anything has been signed or exchanged since the subject date.

Can the seller walk away?

If the subject date passes without removal or an agreed extension, the seller may take the position that the contract is over and may look for another buyer. Whether they are entitled to do so depends on the contract terms and the facts.

If you have already paid a deposit, ask what happens to it. A deposit is usually held in the licensee's brokerage trust account, with the brokerage holding it as stakeholder. Licensees must pay money received into a trust account, and withdrawals are controlled by the Real Estate Services Act. Disputes about who is entitled to a deposit can be complicated, and a lawyer can explain your position.

Deposit timing also varies. Some offers provide for no deposit until after subjects are removed. For new developments (presales), developers must hold buyers' deposits in trust under the Real Estate Development Marketing Act, and BCFSA can investigate if a deposit was not held in trust as required.

If a deposit is claimed as forfeited, a buyer can ask a court to relieve against penalties and forfeitures on terms it thinks fit. Whether a court would do so depends on the circumstances.

How an extension works

If you need more time, you can ask the seller to agree to extend the subject date. Whether the seller will agree, and what your contract requires of them, depends on your situation and is worth confirming with a lawyer. Because a contract respecting land is generally not enforceable unless there is a signed writing, an extension should be written down and signed by the people bound by the contract.

The law does recognize two alternatives to a signed writing: acts by the party to be charged indicating a contract was made, and reasonable reliance that would make non-enforcement inequitable. Those are not a safe substitute for paperwork, and whether they apply depends on the facts. The signed-writing rule also does not apply to a lease of land for a term of 3 years or less, or to a contract to grant such a lease.

• Ask as early as you can, ideally before the deadline passes, and make the request in writing.
• State the new date and time and which subjects it covers.
• Have both sides sign and keep copies.
• Ask whether the seller wants anything in return, such as a larger deposit; a seller can counter-offer to increase the deposit or require it before subject removal.

Common situations

What to do next

• Find the exact subject date and time in your contract.
• Collect your lender, inspector and strata correspondence.
• Decide whether to request an extension in writing.
• Do not sign a removal if a condition is not truly satisfied unless you accept that risk.
• Speak with a lawyer, especially if a deposit is at stake.

A lawyer can read your contract and tell you where you stand and what options remain. How this applies depends on your situation, so it is worth confirming the details before you act.

Frequently asked questions