Humber/Ontario Real Estate Course 3 Exam Practice

What is the purpose of an acknowledgement clause in relation to property?

1. To protect the seller by clarifying a material fact about the property

2. To protect the buyer with assurances regarding the property's condition

3. To warrant the condition of included chattels at closing

4. To make the agreement conditional on the sale of the buyer's property

5. To transfer all liabilities to the previous owner

6. To provide a detailed history of the property

The correct answer is: To protect the seller by clarifying a material fact about the property

The purpose of an acknowledgement clause is to clarify important information related to the property, ensuring that both parties are aware of and agree upon specific material facts that could influence the transaction. This clause helps protect the seller by documenting that the buyer has received and understood these material facts about the property, thus minimizing potential disputes later regarding disclosures. For instance, if there are certain conditions or characteristics about the property, the acknowledgement clause serves to confirm that the buyer is aware of these details, which can help the seller avoid claims of misrepresentation. Recognizing the seller's need for protection in these contexts is pivotal, particularly since any failure to disclose material facts could lead to significant legal repercussions. Other options do not accurately capture the primary function of an acknowledgement clause; for example, while they may involve aspects of buyer protection or conditions of the agreement, they do not specifically focus on the documentation and recognition of material facts as the primary intent of an acknowledgement.