(Ontario)
Question:
My understanding is that Land Severance is a True Condition Precedent – and no agreement exists if severance is rejected. I found the below two options in the material-
1. – Agreement of Purchase and Sale will become Null and Void if the severance is not approved by municipality before completion date
2 – The Planning Act clause in Agreement of Purchase and Sale requires the municipality to approve the severance before agreement become binding
Not sure which is correct.
Answer:
Compliance with the Planning Act is a True Condition Precedent, it cannot be waived by either party. So, if there’s no approval by the municipality, then, there’s no deal, it is null and void. That’s answer #1.
The Agreement between the parties is already binding. We are just waiting for the decision of the municipality to see what happens. So, #2 is incorrect.
Brian Madigan LL.B., Broker