BC Real Estate Contract Conditions: Complete Guide for Buyers and Realtors

What a subject condition is — and what it is not

A subject condition (also called a condition precedent or simply a “subject”) is a clause in the Contract of Purchase and Sale that makes the contract binding only if a specified circumstance is satisfied by a specified date. If the condition is satisfied, the buyer removes it — called “waiving” the condition — and the contract becomes unconditional. If the condition is not satisfied, the buyer can “collapse” the contract and the deal ends without penalty.

A subject condition is not a right to exit the contract for any reason. The buyer must have genuinely attempted to satisfy the condition, and the collapse must be based on an actual failure of the condition, not a change of mind. The distinction matters legally, though in practice it is rarely litigated.

Subject conditions are distinct from BC’s 3-business-day Home Buyer Rescission Period (HBRP), which gives buyers the right to withdraw from any accepted residential offer within 3 business days for a fee of 0.25% of the purchase price. The HBRP is an unconditional right that applies regardless of whether the contract has subject conditions.

Common subject conditions in BC real estate

1. Subject to financing

The financing condition is the most common subject in BC residential transactions. It protects the buyer in the event that their lender does not approve financing on acceptable terms for the specific property. The condition is typically phrased as “subject to the buyer arranging financing satisfactory to the buyer on or before [date].”

Key drafting considerations:

• The deadline should allow enough time to get a full property appraisal — typically 5 to 10 business days depending on market conditions and lender timelines
• The phrase “satisfactory to the buyer” gives the buyer subjective discretion — they are not required to accept financing at any price or on any terms
• Pre-approval does not guarantee mortgage approval — lenders approve the borrower and the property separately. A property may appraise below the purchase price, triggering a financing gap
• Insured mortgages (less than 20% down) require CMHC, Sagen, or Canada Guaranty approval of the property as well as the borrower
• Strata properties require lender review of the strata's financial health, insurance, and special levies — this takes longer than freehold financing

2. Subject to home inspection

The home inspection condition gives the buyer the right to have the property professionally inspected and to make the contract contingent on the results being satisfactory. The standard phrasing is “subject to the buyer obtaining and reviewing a home inspection satisfactory to the buyer.”

Practical notes:

• Home inspectors in BC are regulated under the Home Inspector Licensing Regulation — require a licensed inspector only
• The condition period should allow enough time to schedule the inspection (often 24 to 48 hours lead time in busy markets) and review the report (1 to 2 days)
• A 5-business-day condition period is typical; 3 days is tight but possible in competitive situations
• The inspection condition protects against physical defects in the structure, systems, and components of the home — it does not cover title issues, strata issues, or neighbourhood concerns
• Pre-inspection (completing an inspection before making an offer) is an alternative in competitive markets — it allows offers without a formal inspection condition while still giving the buyer information

BCFSA professional standards require that realtors ensure buyers understand the purpose of a home inspection condition and the risk they take by waiving it. If a buyer chooses to offer without an inspection condition, the realtor should document that the buyer made this decision with full information.

3. Subject to review of strata documents

For strata properties (condominiums, townhouses, bare land strata), the strata document review condition is as important as the home inspection. It gives the buyer the right to review the strata corporation’s governing documents and financial records before becoming unconditional.

Strata document review typically requires 7 to 10 business days — the strata corporation has 5 business days under the Strata Property Act to provide the Form B and other standard records. Buyers reviewing complex stratas, especially older buildings with known envelope or mechanical issues, may need additional time.

4. Subject to review of title

A title condition gives the buyer the right to review the title to the property and to require that it be delivered free and clear of any encumbrances that the buyer did not agree to accept. In most BC residential transactions, the buyer’s lawyer or notary reviews title as a standard part of the conveyancing process — but a formal title condition gives the buyer the right to collapse if a title issue is discovered that cannot be resolved before completion.

Common title issues that trigger a title condition:

• Registered judgments or liens against the seller that attach to the property
• Easements or rights-of-way that restrict use in ways the buyer was not aware of
• Restrictive covenants (e.g., agricultural land use restrictions, building restrictions)
• Encroachments — where a structure on the property crosses a boundary line
• Outstanding strata liens or levies registered against the title
• Pending litigation that has been noted on title via a certificate of pending litigation (CPL)

5. Subject to obtaining insurance

A property insurance condition gives the buyer the right to confirm that they can obtain insurance for the property on acceptable terms. This condition is particularly important for:

• Older homes with knob-and-tube wiring, aluminum wiring, or outdated panels — many insurers refuse to insure or charge significantly higher premiums
• Properties with prior water damage, mould claims, or grow-op history that appears in insurance claim databases
• Strata units in buildings that carry only bare form insurance — individual unit owners may face significant coverage gaps
• Rural properties where some insurers limit coverage due to distance from fire stations
• Properties in flood-prone areas or near wildfire risk zones, where some insurers have withdrawn coverage

6. Subject to sale of the buyer’s existing property

The sale of property condition makes the purchase conditional on the buyer successfully completing the sale of their current home by a specified date. This condition protects buyers who cannot carry two mortgages simultaneously.

From the seller’s perspective, a sale of property condition is the weakest possible condition because it depends on market forces entirely outside the seller’s control. Many sellers are reluctant to accept this condition in competitive markets. When sellers do accept it, they typically negotiate for a “72-hour clause” (sometimes called a release clause or first-right-of-refusal clause) that allows them to continue marketing the property and, upon receiving another acceptable offer, give the original buyer 72 hours to remove the sale condition or collapse the contract.

7. Subject to satisfactory completion of repairs

When the inspection reveals defects and the parties negotiate a credit or repair agreement, the contract may include a condition requiring the buyer’s satisfaction with completed repairs before completion. This condition is narrower than the general inspection condition — it applies specifically to work the seller has agreed to perform.

8. Subject to review of building permit history

In markets where unpermitted additions, suites, and renovations are common — which describes much of Metro Vancouver — a condition allowing review of the City’s permit history gives buyers the ability to verify that the home’s layout and any secondary suites are legally permitted. Unpermitted work creates risk at insurance, mortgage, and resale stages.

Drafting conditions correctly

A poorly drafted subject condition can create ambiguity about whether it was satisfied, who bears the burden of proving satisfaction, and what the deadline actually is. These are the standard drafting principles for BC real estate subject conditions.

Waiving and collapsing: the mechanics

When a subject condition is satisfied, the buyer must formally remove it — this is called waiving or removing the condition. When a condition cannot be satisfied, the buyer collapses the contract. Both actions must be in writing to be legally effective in BC.

Waiving a condition

Collapsing a contract

If a condition cannot be satisfied, the buyer collapses the contract by providing written notice to the seller (through their realtors) before the condition deadline. The deposit is returned to the buyer — the seller has no claim to it when a condition is properly collapsed.

The collapse notice should reference the specific condition being collapsed and state that it was not satisfied. It does not need to include reasons or supporting documentation, though providing documentation can protect the buyer against later claims of bad faith.

Extending a condition deadline

Either party can propose extending a subject deadline. The extension must be agreed to in writing by both parties before the original deadline expires. A verbal agreement to extend is not binding in BC real estate.

Sellers are not required to agree to an extension, and in competitive markets often decline to do so — particularly if they have received another offer they would prefer to accept. Buyers who need more time to satisfy a condition should communicate early, before the deadline pressure creates urgency.

Subject conditions and multiple offer situations

In multiple offer situations, buyers often face pressure to reduce or eliminate subject conditions to make their offer more competitive. Understanding the trade-offs is essential for realtors advising buyers in this position.

The key principle for realtors advising buyers in competitive situations: conditions can be removed before offering (by doing the due diligence in advance during the listing period) or shortened (by accelerating the process) rather than simply waived. A buyer who has already done a pre-inspection, reviewed strata documents, and spoken to their mortgage broker about the specific property can legitimately offer with no conditions — or very short ones — because the risk has been mitigated, not ignored.

BCFSA professional standards for realtors

The BC Financial Services Authority sets practice standards that govern how realtors must handle subject conditions. Key obligations:

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