Humber/Ontario Real Estate Course 2 Exam Practice

What should be included in a condition precedent clause to obtain a new first mortgage?

1. Must specify amortization for the new mortgage.

2. The waiver is unnecessary as it is a strict condition.

3. Should include minimum acceptable terms for the buyer.

4. Must allow at least 15 days for condition fulfillment.

The correct answer is: Should include minimum acceptable terms for the buyer.

In a condition precedent clause to obtain a new first mortgage, it is essential to include minimum acceptable terms for the buyer. This ensures that the buyer is protected and provides clarity on what terms the new mortgage must meet to satisfy the condition. By setting out these terms in the clause, the buyer can effectively communicate their requirements to the lender and ensure that the new first mortgage aligns with their needs and expectations. Option A is not directly related to the condition precedent clause for obtaining a new first mortgage as specifying the amortization for the new mortgage is not typically a required or standard component in this context. Option B is incorrect as the presence of a condition precedent does not automatically imply that a waiver is unnecessary. Each condition precedent serves a specific purpose in a real estate transaction and should be clearly outlined to protect the parties involved. Option D, specifying a minimum amount of time (such as at least 15 days) for condition fulfillment, is not a standard requirement in a condition precedent clause for obtaining a new first mortgage. The time frame for fulfilling conditions can vary depending on the specific terms negotiated by the parties involved and the urgency of the transaction.