Subject Clauses:
The purpose of a subject clause contained in an offer to purchase is to set out a specific condition that must be fulfilled before the sale can go through.
One common subject clause you might encounter is one in which you (the buyer) makes the sale conditional upon finding the exact amount and type of financing which will enable you to purchase the home.
Remember that, if a seller accepts an offer that contains a subject clause, he or she is effectively taking their property off the market for the period in which you are attempting to meet the conditions you have set. For any subject clause set, an agreed upon time for the condition to be met is specified in the offer to purchase, this is usually between 7 to 10 days.
If any one of the conditions (subject clause) contained in the offer to purchase cannot be met, after every reasonable effort has been made on your part to do so, the contract becomes void and ends, and there is no legal obligation for you (the buyer) to complete the purchase.
Some of the more common Subject Clauses are:
By-Laws (for strata properties) Strata Council Minutes (for strata properties)
The seller may wish to accept an offer containing a subject clause (e.g., subject to the buyer selling their own home) yet still leave themselves free to consider other offers and continue marketing the property, just in case the buyers are unable to remove the condition.
This can be done, by inserting a “Time Clause” in the contract. A time clause will permit the seller, to deliver a notice require the buyer to remove all subject conditions, within a short specified time period (usually 24-48 hours) if the seller receives another offer that they would like to accept.
If you (the buyer) do not remove the conditions within that time, the conditional contract comes to an end and the seller is free to proceed with the second offer.
Do you know all of the pros and cons of using a “Time Clause Form” in a Contract? Terry does!
Contact Terry Marion for More Information regarding Subject Clauses: TerryMarion@telus.net
To Buy A Home Call:
Terry Marion
Realtor
Royal LePage Showcase Plus
3137 St. John’s Street, Port Moody, British Columbia
Canada V3B5R5
Email: terrymarion@telus.net Office Phone: (604) 461-2844
Toll Free: 1-800-567-4677 Cellular Phone: (604) 644-7237
Home Fax: (604) 945-3599
