Conditional Offer

A conditional offer — commonly called a 'subject offer' in BC — is a Contract of Purchase and Sale in which the buyer's obligation to complete the purchase depends on one or more specified conditions, known as 'subjects,' being satisfied by a defined subject removal date. Common subjects include financing approval, home inspection, strata document review, sale of the buyer's existing property, and confirmation of insurance. The contract becomes a firm, binding agreement only when the buyer removes all subjects in writing before or on the subject removal date. If a subject cannot be satisfied, the buyer may typically give written notice to walk away from the transaction and have their deposit returned.

Under standard BC practice governed by the Real Estate Services Act (RESA) and its Rules, subject removal must be made in writing — verbal confirmation is not sufficient to make a conditional offer firm. The buyer delivers a signed subject removal addendum or notice to the seller (or the seller's licensee) on or before the subject removal date specified in the Contract of Purchase and Sale. If written subject removal is not received by the deadline, the contract generally collapses and the deposit is returned to the buyer. BCFSA-licensed real estate licensees are expected to ensure clients understand the written-removal requirement.

If a buyer is unable to satisfy a subject condition and provides timely written notice within the subject removal period, the deposit is ordinarily returned to the buyer in full because no firm contract came into existence. Deposits held by a licensee must be kept in a designated trust account in accordance with the Real Estate Services Act (RESA) and the Real Estate Services Rules, and must not be released to either party without proper authorization or a court order if there is a dispute. The specific terms governing deposit return should always be reviewed in the individual contract, as non-standard clauses can vary. In a dispute, either party may seek a court order or pursue dispute resolution as contemplated under RESA.

When a conditional offer includes a subject for strata document review, the buyer typically reviews documents produced under the Strata Property Act (SBC 1998, c. 43), including the Form B Information Certificate, the strata plan, bylaws, rules, minutes of general and council meetings, the depreciation report (if one exists), the contingency reserve fund balance, and any registered strata-property charges. The Form B, which the strata corporation must provide within a prescribed period under the Strata Property Act Regulation, is a key disclosure document containing financial and bylaw information. Buyers should review these documents carefully, as the strata corporation's financial health, pending special levies, and bylaw restrictions can materially affect the value and use of the strata lot. The subject period gives the buyer time to assess this information before committing to a firm purchase.

In BC, a seller who has accepted a conditional offer may include — or negotiate — an 'escape clause' (also called a 'time clause' or '72-hour clause') in the Contract of Purchase and Sale, which allows the seller to continue marketing the property and accept a subsequent offer, giving the original buyer a fixed period (often 72 hours) to remove subjects or collapse the deal. Without such a clause, the seller is generally bound by the accepted contract and cannot accept a competing offer on the same property during the subject period. BCFSA-licensed licensees acting for sellers have obligations under RESA regarding disclosure of multiple offers and must handle any competing offer situations in accordance with their duty of good faith and the Rules. Buyers and sellers should ensure any escape clause terms are clearly drafted and understood before signing.

When a property is located within the Agricultural Land Reserve (ALR), established under the Agricultural Land Commission Act (SBC 2002, c. 36), the buyer's permitted uses of the land are significantly restricted, and a prudent conditional offer may include a subject allowing the buyer to investigate ALR restrictions, permitted non-farm uses, subdivision potential, and any required Agricultural Land Commission (ALC) approvals. The ALC administers the ALR and determines whether applications for non-farm use, subdivision, or non-adhering residential use may be approved, and approval is not guaranteed. Buyers should consult the ALC directly for current rules applicable to the specific parcel, as restrictions can affect the property's utility and value in ways that differ substantially from non-ALR land. A subject for ALC approval or legal review of ALR restrictions is therefore common in offers on agricultural or ALR-designated properties.

Property Transfer Tax under the BC Property Transfer Tax Act is triggered upon registration of the transfer at the Land Title Office, not upon the acceptance of a conditional offer — so PTT does not become payable until the transaction completes and the title transfers. If a conditional offer collapses because a subject is not removed, no PTT obligation arises for the buyer. For completed purchases, standard PTT rates are 1% on the first $200,000 of fair market value, 2% on the portion from $200,000 to $2,000,000, 3% on the portion from $2,000,000 to $3,000,000, and an additional 2% on the residential portion exceeding $3,000,000. Eligible first-time home buyers may qualify for a full PTT exemption on qualifying properties up to $835,000 under the First-Time Home Buyers' Program, and newly built homes may qualify for an exemption up to $1,100,000 under the Newly Built Home Exemption — consult the current BC Ministry of Finance guidance for full eligibility criteria.

BCFSA-licensed real estate licensees in BC are governed by the Real Estate Services Act (RESA) and its Rules, which impose duties of good faith, honesty, and competency in all dealings. When presenting a conditional offer, a licensee must ensure the client understands the nature and implications of each subject clause, the subject removal deadline, and the written removal requirement, and must present the offer to the other party promptly. Licensees must also comply with disclosure obligations regarding agency relationships and conflicts of interest as required by RESA, and must not misrepresent material facts about the property or the transaction. The BCFSA (which assumed regulatory responsibility from the former Real Estate Council of BC on August 1, 2021) oversees licensee conduct and may investigate or discipline licensees who fail to meet these standards.

When a BC property owner dies, title to their real estate generally vests in their estate and is administered by an executor or administrator in accordance with the Wills, Estates and Succession Act (WESA). The executor has authority to enter into a Contract of Purchase and Sale, including a conditional offer, on behalf of the estate once they have probate (if required by the Land Title Office) or other appropriate authority. Subject conditions in such offers often include subjects for court approval (if the sale requires it), title confirmation following probate, and satisfactory legal review, as estate sales can involve additional procedural steps. Buyers purchasing from an estate should ensure the contract clearly identifies the seller as the estate and that the executor has legal authority to complete the transaction.

Yes — BC's Personal Information Protection Act (PIPA) governs how real estate licensees and brokerages collect, use, and disclose a buyer's personal information during a real estate transaction, including while a conditional offer is being negotiated and processed. Licensees must collect only the personal information necessary for the transaction (such as financial details for financing subjects), obtain appropriate consent, and protect that information from unauthorized disclosure. Personal information provided by a buyer to support a financing subject — such as income documentation or mortgage pre-approval details — must be handled in compliance with PIPA, and should not be shared with the seller or third parties beyond what is necessary and consented to. Buyers and licensees should also be aware that any unsolicited commercial electronic communications sent in connection with the transaction may engage Canada's Anti-Spam Legislation (CASL).