What Is a Conditional Offer in Ontario Real Estate?
A conditional offer in Ontario is an Agreement of Purchase and Sale that only becomes firm and binding once specific conditions written into the offer are either fulfilled or waived by a set deadline. Until that happens, the deal is not final — and if the conditions are not met, the agreement ends and the buyer’s deposit is returned.
Here is what you need to know about how conditional offers work in Ontario, what the most common conditions are, and what happens if things do not go as planned.
What Does “Conditional” Actually Mean?
When a buyer makes a conditional offer, they are saying: “I want to buy this property, but the deal only proceeds if certain things check out.” The conditions are written into the OREA Agreement of Purchase and Sale form and have a specific deadline by which they must be resolved.
Until all conditions are waived or fulfilled in writing, the deal is not firm. Either side may still see the transaction collapse if conditions are not met on time. Only once every condition is resolved in writing does the deal become a firm Agreement of Purchase and Sale.
The Three Most Common Conditions in Ontario
1. Financing Condition
The offer is conditional on the buyer arranging satisfactory mortgage financing by a stated date. This protects the buyer if their lender declines the mortgage or changes the terms after the offer is accepted.
Typical condition period: 3 to 7 business days, depending on how prepared the buyer is and how quickly the market is moving.
2. Home Inspection Condition
The offer is conditional on the buyer obtaining a satisfactory home inspection report from a qualified inspector. If the inspection reveals significant issues, the buyer can request repairs, negotiate a price reduction, or choose not to waive the condition and walk away with their deposit.
Typical condition period: 3 to 5 business days to book, complete, and review the inspection report.
3. Status Certificate Condition (Condos Only)
For condominium purchases, it is standard to include a condition allowing the buyer and their lawyer to review the status certificate and related condo corporation documents. If the condo’s financials, reserve fund, legal issues, or rules are not acceptable, the buyer can refuse to waive the condition.
Typical condition period: 7 to 10 business days or more, because Ontario condo law allows the corporation up to 10 days to produce the status certificate, plus time for the lawyer’s review.
Other conditions that appear in Ontario offers include sale of the buyer’s existing property, lawyer’s review of the agreement, and septic or well water quality conditions for rural properties.
What Happens If a Condition Is Not Met?
There are three possible outcomes when a condition deadline approaches:
The buyer does not waive because the condition is genuinely not satisfied
If financing is declined or the inspection reveals issues the buyer cannot accept, the buyer does not waive the condition. Under properly drafted OREA-style wording, the agreement ends and the buyer’s deposit is returned. The deal is over with no penalty to the buyer.
The parties agree to extend the condition period
If more time is needed — for example, a lender is slow with underwriting or the status certificate has not arrived — the buyer and seller can sign an amendment extending the deadline. OREA forms include standard amendment documents for this purpose.
The condition lapses with no waiver or extension
If the deadline passes without a signed Notice of Fulfillment or Waiver and no extension has been agreed to, the condition is treated as not satisfied. The agreement becomes null and void, and the buyer’s deposit is released back to them.
An Important Note on Good Faith
Ontario law and RECO guidance are clear that conditions must be used and satisfied in good faith. A buyer who never actually applies for financing, or who refuses to engage with the inspection process and then claims the condition is “not met,” risks a dispute over whether they acted honestly and reasonably. Conditions are a legitimate protection — not a mechanism to exit a deal without a genuine reason.
Conditional vs. Firm Offer: What Sellers Should Know
In a competitive market, sellers sometimes prefer firm offers because there is no risk of the deal falling through on a condition. However, a conditional offer from a well-qualified buyer with a short condition period is often more reliable than a firm offer from a buyer who has not confirmed their financing.
In York Region’s current balanced market, conditional offers are common and accepted. The condition period and the buyer’s preparation level matter more than whether the offer is conditional or firm.
Quick Answers
Can a seller accept another offer while a conditional offer is in place?
Generally no — once a seller accepts a conditional offer, the property is under contract. The seller cannot accept a competing offer unless the first deal collapses. However, sellers can register a “time clause” that allows them to continue marketing and give the first buyer a set period to firm up if a second offer comes in.
Does the buyer get their deposit back if a condition is not met?
Yes — under properly drafted OREA-style condition clauses, if the buyer acts in good faith and the condition is genuinely not satisfied, the deposit is returned to the buyer when the agreement ends.
How long do conditions typically last in Ontario?
There is no legislated standard. In practice, financing conditions are typically 3 to 7 business days, home inspection conditions are 3 to 5 business days, and status certificate conditions for condos are 7 to 10 business days or more. The deadline is whatever the buyer and seller negotiate and write into the agreement.
What is the difference between waiving and fulfilling a condition?
Fulfilling a condition means the condition was actually satisfied — for example, the buyer received mortgage approval. Waiving a condition means the buyer chooses to proceed even if the condition was not technically satisfied — for example, deciding to move forward despite a minor inspection finding. Both require a signed Notice of Fulfillment or Waiver delivered before the deadline.
About Pam Bechard
Pam Bechard is a residential real estate professional serving York Region and South Simcoe, Ontario, with nearly 15 years of experience. If you have questions about how conditional offers work in a specific situation — whether you are buying or selling — she is happy to walk you through it. Contact Pam to start the conversation.
