Humber/Ontario Real Estate Course 3 Exam Practice

What could occur if a waiver clause exists and an environmental report reveals contamination?

1. Buyer must terminate the agreement

2. Buyer can waive the condition despite the contamination

3. Seller must terminate the agreement

4. Seller retains deposit if buyer terminates

5. Agreement is void by default

6. Price must be reduced by seller

The correct answer is: Buyer can waive the condition despite the contamination

The correct answer highlights that a buyer can choose to waive the condition despite the presence of contamination revealed in an environmental report. This scenario underscores the buyer's autonomy in decision-making within the confines of the agreement. In real estate transactions, a waiver clause allows the buyer to forgo certain conditions or contingencies. If the buyer is aware of the contamination but still wishes to proceed with the purchase, they have the right to waive the condition after understanding the implications. This can be strategic if the buyer believes they can manage the contamination risk or if they find value in the property that outweighs the risk of contamination. Other options do not capture this flexibility. For instance, terminating the agreement outright would eliminate the opportunity for the buyer to proceed if they still see potential in the property. Similarly, a requirement for the seller to terminate the agreement does not align with the buyer's ability to make decisions regarding their interest in the transaction. The concept of a seller retaining the deposit applies in specific contexts, but it is contingent on the nature of the agreement and the reasons for termination. Additionally, voiding the agreement or mandating a price reduction are actions that typically result from mutual decision-making or negotiation, rather than being mandated solely because of the contamination issue revealed in