The Distinction That Costs People Money

Buyers often treat "firm" as a formality and "conditional" as a safety net. Both readings are incomplete.

A conditional agreement is already a binding contract. It is not a reservation. What the conditions do is give one party a defined right to end the agreement within a defined window for a defined reason. Outside that window, the contract stands.

Michael John Lau, a REALTOR® who represents home buyers purchasing detached homes, townhomes and condominiums in Markham, Ontario, walks clients through the condition clauses before an offer is signed rather than after. The clauses are where the protection lives, and they are the part most buyers skim.

The Common Conditions and How Long They Run

These are market conventions rather than statutory periods. Everything is negotiable, and in a competitive situation buyers routinely shorten or drop conditions to strengthen an offer. That is a real trade off, not a formality.

Waiver Versus Notice of Fulfilment

These two documents produce the same practical result and mean opposite things legally. Buyers should know which one they are signing.

A waiver is the intentional relinquishment of a known right. The buyer proceeds without the condition being satisfied. This is what you typically sign for a home inspection condition when you have seen the report, do not love everything in it, and are choosing to proceed anyway.

A notice of fulfilment confirms in writing that the condition was actually satisfied. This is what you typically sign for a financing condition once approval is in hand.

The distinction matters because where a clause is drafted as a true condition precedent, it cannot be unilaterally waived at all. It can only be fulfilled. Signing the wrong document in that situation can leave a buyer exposed. This is a question for your real estate lawyer, not something to work out at the kitchen table.

What Happens on the Deadline

This is the part that surprises buyers most, and the news is good.

Under standard Ontario Agreement of Purchase and Sale wording, if the buyer delivers nothing by the condition deadline, the agreement becomes null and void automatically and the deposit is returned in full, without deduction. The buyer does not have to take any positive step. Inaction ends the deal.

Conditions are inserted for the benefit of a named party, and time is of the essence throughout. A deadline is a deadline. Nobody sends a reminder.

The Deposit: Where It Goes and When It Is at Risk

Three phrases appear in Ontario agreements and they mean different things.

• "Herewith" means the deposit is submitted with the offer. Common in multiple offer situations.
• "Upon Acceptance" means the deposit is due within 24 hours of acceptance. This is strict. An acceptance at 6:00 p.m. Friday creates a deadline of 5:59 p.m. Saturday, which falls outside banking hours. Plan for it.
• "As otherwise described in this Agreement" allows custom timing set out in a schedule, which is how experienced agents avoid the weekend and holiday trap.

The deposit is normally held in the listing brokerage's real estate trust account, which is covered by RECO insurance. It can alternatively sit with the buyer's brokerage, or with the seller's lawyer in trust where the seller is unrepresented. It never goes directly to the seller.

Late payment of the deposit is itself a breach. Because time is of the essence, a seller may be entitled to terminate over it.

Walking Away From a Firm Deal in Ontario

Buyers sometimes assume the deposit is the worst case. In Ontario, it is not.

In Azzarello v. Shawqi, 2019 ONCA 820, the Court of Appeal set out the measure of damages for a defaulting purchaser: the difference between the original purchase price and the price the seller achieves on resale, plus carrying costs during the resale period. The deposit is credited against that award, not treated as the ceiling.

The same decision confirmed that an innocent seller is not required to accept the defaulting buyer's offer to repurchase at a reduced price. Doing so would hand the defaulting buyer a tactical advantage and would encourage default whenever the market softened.

On deposits specifically, Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, ordered forfeiture and confirmed that relief from forfeiture is a narrow discretionary remedy. The forfeiture must be unconscionable, not merely unfair, for a court to intervene.

The seller does have a duty to take reasonable steps to mitigate. But the practical summary for a Markham buyer is simple: a firm agreement is an obligation to close, and the exposure on default can substantially exceed the deposit.

Escape Clauses and Sale of Home Conditions

Where a buyer's offer is conditional on selling their existing home, sellers commonly insert an escape clause. It lets the seller keep marketing the property and accept a competing offer.

If that happens, the first buyer receives a short window to waive their conditions and firm up, or step aside. The window is commonly 24 to 72 hours, with 48 hours most common in Ontario. The phrase "72 hour clause" is a loose label rather than a fixed standard, so read the actual number in your agreement.

Status Certificates for Markham Condominium Buyers

Under section 76 of the Condominium Act, 1998, a condominium corporation must deliver a status certificate within 10 days of request, and the maximum fee is $100 including all applicable taxes.

The certificate legally binds the corporation as to its contents, which is what makes it valuable. It discloses the reserve fund balance, the budget, the rules, any planned special assessments and any litigation. It should always be reviewed by a lawyer before a condominium purchase goes firm.

Given that Markham condominium apartments averaged roughly $632,000 in 2026 and took an average of 43 days to sell, condominium buyers usually have the time to do this properly. Use it.

Reading MLS Status Codes

On the Toronto Regional Real Estate Board system, three codes tell you where a property stands.

• SC (Sold Conditional): off market. The seller cannot accept other offers while conditions run.
• SCE (Sold Conditional with Escape clause): the seller may keep showing the property and accept a better offer, subject to the first buyer's short window to firm up.
• Sld: firm and unconditional.

A buyer who sees SCE on a home they wanted has not necessarily missed it.