Humber/Ontario Real Estate Course 2 Exam Practice

Seller Nguyen needs to sever an existing parcel to create two equal-sized lots before selling. If Buyer Richards makes an offer conditional on a severance, what kind of condition is this?

1. Condition subsequent

2. Condition precedent

3. True condition precedent

4. True condition subsequent

The correct answer is: True condition precedent

In this scenario, where Seller Nguyen needs to sever an existing parcel to create two equal-sized lots before selling and Buyer Richards makes an offer conditional on a severance, this is a True condition precedent. A true condition precedent is a condition that must be fulfilled before the contract comes into effect. In this case, the severance of the existing parcel is a necessary condition for the sale to proceed, making it a true condition precedent. Options A and D, condition subsequent and true condition subsequent, are not applicable in this situation. A condition subsequent is a condition that, if not met, can terminate a contract that is already in effect. In contrast, a true condition subsequent is a condition that, if not met, can cause the contract to be terminated. However, in the given scenario, the condition of severing the parcel is a condition that must be met for the contract to come into effect, so these options do not apply. Option B, condition precedent, is a general term for a condition that must be met before a contract becomes binding. While this term is similar to a true condition precedent, the distinction is that a true condition precedent refers specifically to a condition that is essential for the contract to come into effect.