Humber/Ontario Real Estate Course 2 Exam Practice

What should a condition precedent clause to secure a new first mortgage include?

1. Must specify the amortization for the new mortgage.

2. Include no waiver as it is a strict condition precedent.

3. Detail the minimum acceptable terms from the buyer's perspective.

4. Allow at least 15 days for condition fulfillment.

The correct answer is: Detail the minimum acceptable terms from the buyer's perspective.

A condition precedent clause in a real estate transaction is a condition that must be met before a contract becomes binding. In the context of securing a new first mortgage, the condition precedent clause should detail the minimum acceptable terms from the buyer's perspective. This is because the buyer needs to ensure that the terms of the new mortgage meet their requirements before proceeding with the transaction. By including the minimum acceptable terms in the clause, the buyer can protect their interests and avoid any surprises or issues with the new mortgage. Option A is not the correct choice because specifying the amortization for the new mortgage is not typically included in a condition precedent clause. The terms of the mortgage may include the amortization period, but it is not a necessary component of a condition precedent clause. Option B is not the correct choice because the condition precedent clause can sometimes include waivers or exceptions if both parties agree. It is not always a strict condition that cannot be waived. Option D is not the correct choice because the timeframe for fulfilling the condition precedent can vary depending on the agreement between the parties. While allowing at least 15 days for condition fulfillment may be common, it is not a requirement for all condition precedent clauses.