Offer conditions and the deposit in Ontario, explained

Know the process · 6 min read

Ontario resale purchases have no cooling-off period. Once an offer is accepted and firm, a buyer who walks away can lose the deposit and face a claim for the seller's damages — which is why the least glamorous pages of the Agreement of Purchase and Sale (APS) do the real protecting: the conditions in Schedule A and the deposit clause. This is general information about how those mechanisms work in Ontario, not legal advice — conditions are legal steps with deadlines, and your own agent and lawyer apply them to your deal.

What a condition actually does

A condition makes the agreement non-binding until a stated requirement is met or waived in writing by its deadline. If the condition is neither satisfied nor waived in time, the agreement ends and the deposit is returned in full. Once every condition is waived or fulfilled — normally with a signed Waiver or Notice of Fulfillment — the deal is firm, and the exit ramps close. That single mechanism is the buyer protection that a cooling-off period would otherwise provide, which is why waiving conditions to win a bidding war deserves to be understood as dismantling your own safety net, not as a formality.

The common conditions, compared

Windows vary by deal and market; the agreement you sign, not any guide, sets your dates. Two similar condo units can carry very different risks depending on what the status certificate shows, which is why that condition exists separately from the inspection — one reviews the unit, the other reviews the corporation.

The deposit: what it is and where it sits

The deposit is good-faith money paid on acceptance — commonly around 5 percent of the purchase price in Ontario, typically due within 24 hours of acceptance under the provincial rules, paid by certified cheque or bank draft to the listing brokerage in trust (in some transactions, a lawyer's trust account). It is not an American-style earnest-money escrow; it sits in a trust account until closing, when it is credited toward the down payment. Brokerages must bank deposits into trust within a set period, and deposits held by brokerages carry RECO deposit insurance up to a stated limit.

The part buyers rarely hear: the brokerage cannot simply hand the deposit to whichever side asks louder. Release generally happens at closing, by mutual release signed by both parties, or by court direction. So even a good-faith termination can leave the money tied up while the parties resolve a dispute — one more reason to terminate strictly by the agreement's procedure, in writing, before the deadline, with advice.

Running the conditional period: a numbered checklist

1. Deliver the deposit exactly as the APS specifies — amount, payee, form, and deadline — and keep proof of delivery. Failing a deposit obligation is itself a serious dispute.
2. Calendar every condition deadline the day the offer is accepted. Missing a waiver date can void your protection or breach the contract; "we meant to waive" is not a category the form recognizes.
3. Give your lawyer the fully signed APS within the conditional period, not after it.
4. Book the inspection immediately and attend it. Findings only help while the inspection condition is alive.
5. Chase firm financing, not verbal comfort. Wait for the lender's actual commitment on this property — including the appraisal — before treating the financing condition as satisfied.
6. On a condo, do not waive before your lawyer has reviewed the status certificate.
7. Waive or fulfil in writing, on the proper form, before the deadline — a waiver or Notice of Fulfillment is a legal step, not an informal message to the other agent.
8. Change nothing financial mid-deal: no large purchases, no job changes, until closing — lenders re-check.

What success looks like: every condition was either genuinely satisfied on evidence or deliberately waived in writing before its deadline, the deposit delivery is documented, and the day the deal goes firm contains no surprises for anyone.

The bidding-war trade-off, stated plainly

A firm, condition-free offer can win a competitive bid precisely because it shifts all the risk to the buyer. The safer competitive pattern is to move the diligence before offer night: inspect in advance where possible, line up financing as firmly as a lender allows beforehand, and set a maximum price in advance and hold it. What no buyer should do is waive conditions on a property whose inspection and financing are both still unknown, and call the risk "the market." The market does not pay for the roof.

Questions people commonly ask

If a condition fails, is the deposit automatically refunded? The agreement provides for its return when a condition is properly exercised — but release runs through the trust mechanisms above, and a disputed termination can delay it. Procedure and paperwork are what make "returned in full" happen in practice.

Can conditions be extended? Only by agreement — an amendment signed by both sides before the deadline. Silence does not extend anything.

Is the deposit separate from the down payment? No. At closing it is credited toward the purchase — it is the first instalment of the down payment, delivered early and held in trust.

The rest of Schedule A deserves the same care

Conditions get the attention, but the same schedule and form carry other terms with real consequences. The irrevocable period sets how long the seller has to respond before the offer dies — hours to a day is typical, and an offer can expire unaccepted simply by the clock. The closing date, commonly 30 to 90 days out, has to be matched against mortgage timelines, any existing lease notice period, and mover availability; a closing you cannot fund or physically meet is a breach wearing a calendar's clothing. Fixtures and chattels decide what stays — built-in appliances and light fixtures versus movable items — and disputes at the walk-through are almost always born in vague wording here. The title search and requisition dates give your lawyer the window to check title and raise requisitions, which is one more reason the lawyer receives the signed agreement early rather than at the deadline. None of these terms is dramatic. All of them are cheaper to read before signing than to litigate after.