Subject Removal of Clauses (Conditions)/or Extension of Subject Removal

Subjects are essentially conditions that must be met in order for the deal to become firm, or official. These subjects might include: subject to financing, inspection, property disclosure statement, title search, or strata documents – to name a few. They are completed during the subject removal period, which is the time that you actively work to remove these subjects in good faith. **TIME IS OF THE ESSENCE**  The subject removal process is an extremely important process to understand for both the buyer and the seller in a real estate transaction.

Subject removal period is typically 7 days long (i.e. if you put an offer in Monday, subject removal would be due by the following Monday) and allows you to organize all of your affairs, such as making sure your financing is in place and an inspection on the property or building has been done. You can shorten it depending on how prepared you are with finances etc. However, finding a Home Inspector may change your timeline somewhat. 

FOR INFORMATION ON REAL ESTATE DEPOSITS - CLICK HERE 

Begin working to remove all subjects. Hire and schedule a home inspector to come by at least 2 days before the date of subject removal. Notify your bank that you have an accepted offer and have them begin the official financing approval process. Obtain all documents including the title search, property disclosure statement, and strata documents (if necessary) to begin reviewing. Follow up on any questions or concerns you may have with the listing agent.

More about “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 the buyers make the sale conditional upon their finding the exact amount and type of financing which will enable them to purchase your home.
  • Another common clause is one in which the buyers make the purchase conditional upon a satisfactory home inspection.
  • Remember that, if you accept an offer which contains a subject clause, you are effectively taking your home off the market for the period in which the buyers are attempting to meet the condition they have set. Therefore, you should ensure that an agreed upon time for the condition to be met is specified in the offer to purchase.
  • If one of the conditions contained in a subject clause cannot be met after every reasonable effort has been made to do so, the contract ends and there is no legal obligation to complete the purchase or sale.
  • As a seller, you may wish to accept an offer containing a subject clause (e.g. subject to the buyers selling their own home) yet still leave yourself free to consider other offers, just in case the buyers are unable to remove the condition.
  • You can do this by having the buyer agree to inserting a time clause in the contract. A time clause will permit you to require the buyer to remove all subject conditions within a short, specified time period if you receive another offer that you would like to accept. If the buyer does not remove the conditions within that time, the conditional contract comes to an end and you are free to accept the second offer.
  • When selling a strata property, a common clause you might encounter is one in which the buyer makes the counter-offer conditional upon his or her review and approval of all pertinent strata documentation, such as registered bylaws, current rules, strata meeting minutes, financial statements, strata plan, Form B, engineer’s reports, etc.

  • WILL YOU LOSE YOUR DEPOSIT IF YOU DONT REMOVE SUBJECTS?
It depends. It depends on what the terms of your Contract of Purchase and Offer says. Typically, the offer can be written is to hand over the deposit Upon Acceptance of Offer, Upon Subject removal or Upon a Subject Free Offer.
  • CAN I GET AN EXTENSION IF I CAN'T GET ALL MY DOCUMENTS IN ORDER BEFORE THE SUBJECT REMOVAL DATE?
You can ask for an extension, but that doesn’t mean it’s guaranteed. In order to extend a deal, the seller(s) and buyer(s) both have to sign an addendum to the contract stating that the subject removal date has been extended, with the date included.  

HERE ARE A FEW CLAUSES BELOW THAT YOU MIGHT EXPECT TO SEE ON YOUR Contract of Purchase and Sale. 

RESIDENTIAL PROPERTIES CLAUSES 

ASSIGNMENT CLAUSE – The Buyer reserves the right to assign this contract in whole or in part to any third party without further notice to the Seller; said assignment not to relieve the Buyer from his or her obligation to complete the terms and conditions of this contract should the assignee default.

FINANCING – 

STRATA DOCUMENTATION –

HOME INSPECTION –

PROPERTY TRANSFER TAX –

The Buyer is aware that the Property Transfer Tax Act as amended imposes an additional Property Transfer Tax of 15% of the fair market value of any residential property being purchased by a Foreign Entity.  
The Buyer will thus be required to pay Property Purchase Tax equal to the total of:

a) 1% of the Purchase Price on the first $200,000.00;
b) 2% of the Purchase Price that exceeds $200,000, but does not exceed $2,000,000.00;

c) 3% of the Property Price that exceeds $2,000,000.00;and
If the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).

The Buyer has obtained or will obtain independent legal advice with respect to the payment of the Property Transfer Tax.

DEPOSIT

DEFAULT ON DEPOSIT CLAUSE – If the Buyer fails to pay the deposit money as required by this contract, the Seller may, at the Seller’s option, terminate this contract.


STRATA OR CONDO PROPERTIES CLAUSES 

Get In Touch

Lola Oduwole

AHOM Realty Group

2300-2850 Shaughnessy St  Port Coquitlam,  BC  V3C 6K5 

Phone: 6048096317

lolaoduwole@yahoo.ca

Get In Touch

Lola Oduwole

Phone: 6048096317

lolaoduwole@yahoo.ca

Office Info

AHOM Realty Group

2300-2850 Shaughnessy St  Port Coquitlam,  BC  V3C 6K5 

Stay Connected