Inspection Condition Clause Updated

This is the standard OREA Inspection Condition clause:

“This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion. 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 ________ on the ______ day of ________________ , (a.m./p.m.) 20 _____ , 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. The Seller agrees to co-operate in providing access to the property for the purpose of this inspection. 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.”

You can appreciate that there are a few problems with the wording. The first reference to the word “Offer” is correct, because the document is an Offer and the paragraph is contained in an Offer which has yet to be accepted.

Then, there is a reference to an Agreement of Purchase and Sale. That’s correct as well, sine we now have an “Agreement”.

The second reference to “Offer” is incorrect, because at this point in time it’s no longer an “Offer”, it has indeed become an “Agreement”. So, while it in fact says: “this Offer shall be null and void…”, what it really means is that this “Agreement” shall be null and void.

The Offer is already null and void. It was already accepted, so it cannot be “accepted” a second time.

Going forward, it would be wise to patch up the clause so that it would read as follows:

This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion. 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 ________ on the ______ day of ________________ , (a.m./p.m.) 20 _____ , that this condition is fulfilled, this Agreement of Purchase and Sale shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the property for the purpose of this inspection. 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.”

Note the change in bold.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com