Schedule “B” Missteps #3

7 Risks Of Poorly Drafted Standard Terms and Conditions

Let’s have a look at this clause:

“In the event the Financing Condition is not fulfilled or waived by the Buyers, the Buyers agree to provide a document signed by their financial institution stating that the institution refused the Buyers a mortgage.”

So, if you were the Listing Agent, would you want that in the deal?

I appreciate that it’s your standard Brokerage’s Schedule “B”, but you are still supposed to read it to determine if it makes any sense in your transaction.

Sufficiency of Requirement

Given the fact that this is the request, the Seller is at risk asking for more. Why just ask for this information? Is it enough? Is it sufficient? Would a Seller truly be seeking additional information?

Purpose of the Request

The general purpose here would be to confirm the “bona fides” of the Buyer. We don’t want the Buyer capriciously just backing out. That seemed to be the case about 8 years ago, but that is no longer the law. The Supreme Court of Canada has been quite clear about that since 13 November 2014.

Buyer’s Perspective

The Buyer doesn’t really “have” a financial institution. If they did, then they would have the money. The financial institutions have obviously requested additional information, and the Buyer was unable to comply or requested a guarantor and the Buyer was unable to comply. The Buyer would prefer that this information remain confidential.


If you were the Listing Agent, and you wished to address this issue, you would update the clause following the Supreme Court decision.

If you were the Buyer’s Agent, you would simply delete this clause.

Brian Madigan LL.B., Broker

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