Humber/Ontario Real Estate Course 3 Exam Practice

For a buyer's offer that includes assuming an existing mortgage, why can't the condition be waived at the buyer's option?

1. A mortgage clause cannot be waived by the buyer's option.

2. The mortgagee must agree first to the assumption, so waiver is irrelevant.

3. Waiver provisions are the best to protect buyer interest.

4. A buyer can choose to waive the mortgage clause regardless of the mortgagee's stance.

5. A waiver can be included but will have no legal effect.

6. Only the seller can waive this type of condition.

The correct answer is: A mortgage clause cannot be waived by the buyer's option.

The correct choice provides a fundamental understanding of mortgage agreements and the necessity for third-party involvement. When a buyer includes in their offer the assumption of an existing mortgage, this inherently involves the mortgagee, or lender, who has the final say in whether such an assumption can happen. The mortgage agreement itself typically contains specific clauses that govern how assumptions can occur, and the buyer's ability to avoid conditions relating to the assumption is limited. Only the lender, who has a vested interest in the terms and conditions under which the loan was issued, can agree to a waiver of their stipulations regarding the assumption. As a result, the buyer cannot independently decide to waive the condition relating to the mortgage assumption without the mortgagee's consent, as they do not control that part of the agreement. This protects the lender's interests and ensures that their investment is secure in the event the buyer defaults on the mortgage after assumption. The other choices do not capture the essence of the legal relationship and obligations present in a mortgage assumption scenario, making them less relevant in this context.