Caution: Using a Notice of Fulfillment for an Inspection Condition

Sometimes Buyers will use the Notice of Fulfillment to remove the inspection condition.

Here’s how that provision, as annotated usually reads:

Inspection:

Actual Condition

This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s own expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion.

Automatic Termination Consequence

Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than p.m. on the day of_____ , 2022 , that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.

Cooperation

The Seller agrees to co-operate in providing access to the property for the purpose of this inspection.

Alternative

This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.

Naturally, neither the headings nor the italics appear in the original.

The two choices to have the Agreement become unconditional are 1) the Notice of Fulfillment and 2) the Waiver.

Notice of Fulfillment

This document includes the following words:

“I/We hereby confirm that I/We have fulfilled the condition(s) which read(s) as follows:….”.

The Condition said “….and the obtaining of a report satisfactory to the Buyer…”.

So, what does that mean? How satisfactory:

  • Just barely satisfactory,
  • Very satisfactory,
  • Over the top satisfactory.

This is unclear, but nevertheless, it must pass a minimum test at the very least.

Waiver

This document includes the following words:

          “I/We hereby waive the condition(s) which read(s) as follows:…”.

There’s nothing further, simply the waiver. No acceptance of the condition of the premises. No reference at all to the report and it being satisfactory or not.

Discovery of Defects Post Completion

Let’s assume that the Buyer discovers defects after he moves in and initiates a lawsuit against the Seller.

If the Buyer delivered a Notice of Fulfillment, the Seller could plead that the Buyer obtained an inspection report which was satisfactory to him. This is an admission against interest.

If, on the other hand, the Buyer removed the condition with a Waiver, no such defence could be raised.

CAUTION: Never, remove an Inspection Condition with a Notice of Fulfillment. It’s risky!

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

Comments 1

Leave a Reply

Your email address will not be published.