Humber/Ontario Real Estate Course 2 Exam Practice

Which statement accurately identifies the requirements for a conditional clause in an offer to purchase real estate?

1. The condition is not correct, as an escape clause must be included.

2. The condition could be written either as a condition subsequent or a condition precedent.

3. A waiver cannot be included, as this condition is a true condition precedent.

4. This condition is more commonly used in a seller's market than in a buyer's market.

5. The condition must be notarized to be legally binding.

6. Such conditions are only valid if both parties sign in the presence of legal counsel.

The correct answer is: The condition could be written either as a condition subsequent or a condition precedent.

In an offer to purchase real estate, a conditional clause outlines specific conditions that must be met for the offer to become binding. The statement that accurately identifies the requirements for a conditional clause in an offer to purchase real estate is that it could be written either as a condition subsequent or a condition precedent. A condition subsequent means that a specific event must occur after the contract is executed, while a condition precedent means that a specific event must occur before the contract becomes binding. Both types of conditions are commonly used in real estate transactions to protect the interests of the parties involved and ensure that the agreement is fair and satisfactory to all. The other options are incorrect for various reasons: - Option A is incorrect because an escape clause is not a requirement for a conditional clause in an offer. - Option C is incorrect because a waiver can be included in a conditional clause as long as both parties agree to it. - Option D is incorrect because the use of conditional clauses is not dependent on whether it is a seller's or buyer's market. - Option E is incorrect because a condition in an offer does not necessarily need to be notarized to be legally binding. - Option F is incorrect because while having both parties sign in the presence of legal counsel can provide added security, it is not a legal requirement for a conditional clause to be valid.