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Ontario Real Estate Licensing Exam Practice · Question

A buyer, wanting to purchase a unique property in Prince Edward County, includes a condition in her offer that the property boundary be re-surveyed to her satisfaction. The seller accepts. Two days before the condition's expiry, the survey comes back, revealing a minor encroachment by a neighbour's fence onto the property. The buyer is concerned. What is the salesperson's most appropriate advice to the buyer regarding this condition?

When a condition is for 'satisfaction,' the buyer has subjective discretion. In this situation, the buyer can inform the seller, seek an extension to resolve th

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Question: A buyer, wanting to purchase a unique property in Prince Edward County, includes a condition in her offer that the property boundary be re-surveyed to her satisfaction. The seller accepts. Two days before the condition's expiry, the survey comes back, revealing a minor encroachment by a neighbour's fence onto the property. The buyer is concerned. What is the salesperson's most appropriate advice to the buyer regarding this condition?

Answer options:

  • The buyer must waive the condition, as the property can still be used. ✅ The buyer should inform the seller of the issue and request an extension to negotiate a resolution or terminate the agreement.
  • The buyer should proceed with the purchase and deal with the encroachment after closing.
  • The buyer has no grounds to terminate the agreement because the encroachment is minor.

Correct answer: The buyer should inform the seller of the issue and request an extension to negotiate a resolution or terminate the agreement.

Explanation: When a condition is for 'satisfaction,' the buyer has subjective discretion. In this situation, the buyer can inform the seller, seek an extension to resolve the issue (e.g., through a price reduction or seller obtaining an encroachment agreement), or if not satisfied, declare the condition unfulfilled and terminate the agreement, as per standard contractual practices involving subjective conditions.

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