Humber/Ontario Real Estate Course 2 Exam Practice

What happens when a waiver provision is added to a condition subsequent clause in a mortgage agreement?

1. The buyer can waive the condition regardless of the mortgage arrangement specifics.

2. The mortgage clause is incorrect, as a waiver provision is not used with condition subsequent clauses.

3. The mortgage clause is incorrect, as mortgage conditions can only be written as condition precedent clauses.

4. The buyer must renegotiate the condition if the mortgage is not as specified.

5. The seller can opt out of the agreement if the condition is waived.

6. The waiver provision extends the closing date.

The correct answer is: The mortgage clause is incorrect, as a waiver provision is not used with condition subsequent clauses.

In a mortgage agreement, a condition subsequent clause stipulates that certain conditions must be met for the agreement to remain valid, and if those conditions are not met, the agreement can be terminated. By adding a waiver provision to a condition subsequent clause, it would allow the buyer to waive the conditions outlined in the clause, thereby negating the need for those conditions to be met. Option A is not correct because a waiver provision in a condition subsequent clause allows the buyer to waive the conditions for the agreement to remain valid, but it doesn't mean they can do so regardless of the specifics of the mortgage arrangement. Option C is incorrect because mortgage clauses can be written as condition subsequent clauses in addition to condition precedent clauses. Option D is not accurate as the buyer wouldn't necessarily have to renegotiate the condition if they choose to waive it using the waiver provision. Option E is also incorrect as a waiver provision in a condition subsequent clause generally empowers the buyer to waive conditions, not the seller to opt out of the agreement. Option F is not correct as the waiver provision does not typically impact the closing date in a mortgage agreement.