Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following statements would be inaccurate when selling a lot that requires severance?

1. Include a condition precedent in the agreement

2. Specify the severance condition clearly

3. Assume the severance is a condition subsequent

4. Provide detailed buyer contingencies

5. Ensure severance is documented

6. Present the condition within the offer document

The correct answer is: Assume the severance is a condition subsequent

To understand why the choice indicating the assumption of the severance as a condition subsequent is inaccurate, it is important to grasp the definitions and implications of conditions in real estate agreements. A severance condition, which pertains to the division of property into separate parcels, should primarily be treated as a condition precedent. This means that the severance must be satisfied before the contract or agreement becomes enforceable. If one were to mistakenly assume that severance is a condition subsequent, it would imply that the contract would still stand even if the severance did not occur after the agreement was made. This could lead to significant legal and financial complications for both parties, as the buyer may expect to own the lot in its severed form, and the seller may not be able to deliver on that expectation if severance is not obtained. In contrast, including a condition precedent, specifying the severance condition clearly, providing detailed buyer contingencies, ensuring the severance is documented, and presenting the condition within the offer document are all actions that align with proper practices when dealing with a property requiring severance. They ensure clarity, protect the interests of the buyer, and establish terms that can be legally enforced, thereby facilitating a smoother transaction process.