Real Estate Terms: Subject Clause

Ryan Coffey
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A subject clause, or “subjects” as us Realtors often refer to them, is a term within an agreement that has not yet been fulfilled at the time of signing.

For example, in almost any offer for a residential property you will see a clause that says the offer is “Subject to the buyer obtaining approval for a first mortgage at terms that are satisfactory to the buyer by  (date).” (FYI This isn’t the exact clause I usually use, as it is an example.) Once the contract is signed with this subject clause in it, the buyer has the agreed upon amount of time to obtain approval for a mortgage. If they try to and can not, the agreement can be pulled apart if the Buyer has truly tried but not been able to get the mortgage.

There are an infinite variety of potentially useful subject clauses for an equal number of properties and situations. The vast majority of deals though start with a standard five subject clauses or six if it is a strata property.

Ryan Coffey