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Updated 3 April, 2023 by Mike Stewart PREC

First Time Home Buyer Safety – Subject to Inspection Clause in the Contract of Purchase and Sale!

In Episode 14, we talked about Subject to Financing and how this is a powerful way to protect a first time home buyer when it comes to financing a home purchase.

Today we are going to talk about the subject to inspection clause in the Contract of Purchase and Sale and how this can protect a new home buyer in Vancouver.

Subject to clauses are often referred to as “escape clauses” or “conditions precedent” in other jurisdictions or business sectors.

What is an Inspection When Buying a Home in Vancouver?

An Inspection or Home Inspection as they are commonly referred to in Vancouver is when the Buyer has a qualified and certified Home Inspector check over the physical condition of the property that is of interest.

In most cases the Home Inspection is done after there is an accepted offer and the Home Inspector checks the following:

  • The exterior envelope of the home (be it a condo or a house) that including, the foundation, parking garage, the roof, the walls, etc as well as the drainage systems and any outbuildings or features on the grounds of the property
  • The interior of the home and all its mechanical and structural systems including plumbing, electrical, flooring, wall systems like drywall, ventilation, windows, skylights, etc

At the end of the Home Inspection, the Buyer receives an inspection report which will clearly lay out the condition of the property and any issues the property may have.


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Why do We Use Subject to Inspection?

Quite simply, a Home Inspection is designed to protect thehome buyer from a money pit or in BC a Leaky Condo.

The Subject to Inspection works just like the other Subject Clauses in that the Buyer gets an accepted offer on the property that is subject to the Buyer approving the results of their home inspection. If the Buyer does not like what they see in the home inspection they can either re-negotiate the accepted offer or kill the deal.

Here is an example of a Subject to Inspection clause:

Subject to Inspection – Power to Kill a Deal

The Subject to Inspection clause gives a buyer a very powerful protection in that it allows the Buyer to walk away from a deal if they are not happy with the physical condition of the property once the home inspection has been done.

The buyer can also re-negotiate the contract based on the findings of the inspection (provided the Seller agrees to negotiate at that point) and threaten to kill the deal if the Seller does not agree to the Buyers proposals to repair or deal with the issues discovered in the home inspection.

In episode 16 we will talk about Subject to clause covering the documentation required to purchase a property in Vancouver. Stay tuned!!

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subject to inspection clause

This Post Has 2 Comments

  1. Does an inspection clause always refer to a home inspection (an inspection of the house itself), even if the word “home” is omitted? If the provision is worded “subject to inspection” rather than “subject to home inspection” would it be reasonable for a buyer to fail to remove that subject based on a defect of the property, and not a defect concerning the house in particular? Thanks for your time!

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