Contingency Clause
Learn about contingency clauses in Canadian real estate — what they are, common types, and why they protect buyers and sellers.
July 27, 2025
What is a Contingency Clause?
A contingency clause in real estate is a contract provision that makes the deal dependent on certain conditions being met, such as financing approval or inspection results.
Why Contingency Clauses Matter in Real Estate
In Canadian property transactions, contingencies protect buyers and sellers by setting clear conditions that must be satisfied for the deal to proceed.
Common contingencies:
- Financing approval
- Satisfactory home inspection
- Sale of buyer’s current home
Understanding contingency clauses helps manage risk and ensures clarity in negotiations.
Example of Contingency Clause in Action
The offer included a contingency clause making the purchase conditional on a satisfactory home inspection.
Key Takeaways
- Sets conditions for deal to proceed
- Protects parties in a transaction
- Common in offers to purchase
- Helps manage risk and expectations
- Must be clearly documented
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Average and median describe different aspects of the same month’s transactions. Both are affected by the mix of homes sold.
Category averages compare different homes and locations; the gaps are not estimates of the cost to upgrade an otherwise identical property.
The five categories shown account for 5,000 of the board’s 5,057 sales. The remaining 57 transactions were in other housing categories.
Monthly observations are not seasonally adjusted. Active listings count properties available at month-end; they are not construction inventory.
Average and median prices share one dollar axis. These unadjusted transaction measures do not control for changes in the homes sold.
TRREB’s 416/905 categories compare the apartments sold in each area. The difference does not isolate a location premium for equivalent units.
5680 Oak Street in Vancouver and its surrounding context. (MCMP Architects)
Ground-level renderings of the tower proposed for 5680 Oak Street in Vancouver. (MCMP Architects)
