Humber/Ontario Real Estate Course 4 Exam 2025 – 400 Free Practice Questions to Pass the Exam

The correct answer is that a true condition precedent in real estate agreements must be fulfilled by an external entity. This means that the condition is dependent on an event or action that is not controlled by the parties in the agreement themselves. For example, a condition might involve obtaining financing from a third-party lender or receiving necessary permits from a government authority. The fulfillment of such conditions is crucial for the agreement to become binding; if the conditions are not met, the agreement may be rendered void or require renegotiation among the involved parties.

The other options present situations that do not accurately represent the characteristics of a true condition precedent. For instance, while conditions can sometimes be modified or negotiated, a true condition precedent specifically relies on fulfillment by an external entity. Additionally, true conditions precedent are applicable in various scenarios, including property severance, and cannot simply be ignored or deemed to have no legal effect. They carry significant legal weight, and the parties must comply with them for the contract to move forward as intended.