Humber/Ontario Real Estate Course 4 Exam Practice

Why is a clause related to the Planning Act included in the agreement of purchase and sale?

1. Authorizes the buyer to search the title of the property

2. Ensures the seller provides a survey

3. Protects the buyer if a severance is needed to transfer title

4. Protects the seller if the present use is not lawful

5. Ensures the buyer inspects the property

6. Ensures compliance with zoning laws

The correct answer is: Protects the buyer if a severance is needed to transfer title

A clause related to the Planning Act is included in an agreement of purchase and sale primarily to safeguard the interests of the buyer in instances where a severance of the property is necessary to effectuate a transfer of title. In scenarios where land is being divided or where specific approvals are needed from municipal authorities to proceed with such changes, having this clause ensures that the buyer is protected. It acknowledges the realities of property transactions, where planning and zoning regulations may affect one’s ability to use or develop the land as desired. Including this clause helps clarify that any severance or division of the property must comply with the Planning Act. This way, if any unforeseen issues arise that prevent a legal transfer of title due to zoning or planning requirements, the buyer has a form of legal recourse or protection to avoid a potential loss of investment or misrepresentation of the property's usability. This consideration is key because navigating through planning regulations without such stipulations could lead to complications and disputes post-transaction. The other options, while relevant to aspects of property transactions and real estate law, do not specifically address the implications of severance or title transfer in relation to the Planning Act, which reinforces why this particular clause is crucial in protecting buyers.