Common Subject Clauses

Detached Homes

The purpose of ‘subject clauses’ is to allow a particular party (buyer or seller) a specific period of time to confirm and clarify specific types of information integral to the purchase and sale of property.

While there are hundreds of potential subject clauses, typically, when buying a detached single family home, there are at minimum five subject clauses that are placed within the contract.

They are:
          1. Subject to being approved for mortgage financing
          2. Subject to satisfactory inspection
          3. Subject to receiving and approving the title search
          4. Subject to approving the Property Disclosure Statement
          5. Subject to arranging fire and property insurance

Subject conditions must benefit a particular party to the contract (either buyer or seller) and must be removed by a specified date. Upon successful removal of all subject clauses, the contract becomes firm and binding. If subject conditions cannot be removed on or before the date specified in the contract, the parties may mutually agree to either extend the subject removal date or collapse the offer. Your agent will be able to explain the process and potential implications.

Apartment and Townhomes

Offers on “Strata Title Properties” can be more complex by nature than those on detached properties. Although a buyer and their agent may be looking to purchase one strata lot within a building of strata apartments, they rely on receiving specific types of information relating to the strata lot, the building and the strata corporation. Often, this information comes from the listing agent, the property management company (if applicable), and/or the strata corporation itself.

When buying an apartment or townhome, typically the same five common subject clauses are used as with detached homes plus subjects related to the review and approval of documents containing information about the strata corporation and the strata log.

These include:
          • Form B
          • Minutes
          • Financial Statement
          • Strata Plan
          • Consultants Reports

As with detached homes, subject conditions on attached homes must benefit a particular party to the contract (either buyer or seller) and must be removed by a specified date. Upon successful removal of all subject clauses, the contract becomes firm and binding. If subject conditions cannot be removed on or before the date specified in the contract, the parties may mutually agree to either extend the subject removal date or collapse the offer. Your agent will be able to explain the process and potential implications.