Planning Act Consent is a True Condition Precedent

Planning Primer 1: The Legislative Background for Planning in Ontario

(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

www.OntarioRealEstateSource.com

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