Home Inspection Condition Ontario Wording That Actually Holds Up

Last updated 11 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · For Ontario registrants · 10 min read

Sole discretion is not a free option, and an appeal court said so

Here is the conversation that starts the trouble. Your buyer calls on the second night of a five-day inspection condition and says they have changed their mind about the neighbourhood. The report came back clean. You tell them not to worry, the condition is in their sole and absolute discretion, so they can walk.

That is a widely held view and it is not a safe one. In Marshall v. Bernard Place Corp., reported from the Court of Appeal in 2002, a discretionary inspection condition was described as having both objective and subjective elements. Your buyer’s judgment about whether a report is satisfactory is theirs, and a court will not second-guess whether a deficiency was serious enough. But there has to be a deficiency. The discretion runs on something the inspection produced, not on a change of heart about the commute.

The shapes an inspection condition can take, and the codes for each

The inspection category is larger than most agents use. Pull the current wording from your own OREA member copy before you draft — what follows is what each variant is for, not the text.

Two of those deserve a flag on sight. INSP-12 is written for the seller: your buyer paid for that report and it goes across the table with every estimate they collected. That should be a decision, not an oversight. INSP-17 is the other one — accurate on a genuine sight-unseen offer, and a document that will be read back to a buyer who never really had a viewing.

Walk-only or remedy-style: the decision you are actually making

This is the fork in the road and most agents never notice they are standing at it. A general condition of the INSP-1 shape gives the buyer one lever: satisfied, or gone. If the inspector finds a twelve-hundred-dollar problem on a house the buyer loves, their only formal options are to accept it, to renegotiate with no contractual footing, or to end the agreement over twelve hundred dollars.

The remedy-style condition at INSP-4, and its condo counterpart at INSP-5, adds the middle setting. Where the report is not satisfactory, it contemplates deficiencies the seller is prepared and able to put right, properly, and the buyer’s inspector returning to look at the work. That converts the inspection from a binary into a negotiation with a structure.

It also has a soft spot. The remedy depends on the seller being willing, and a seller who is not willing is not in breach of anything — the condition falls away to where the walk-only version would have ended. So the remedy version does not give your buyer more certainty of getting the house. It gives a better chance of a repair and a worse exit argument.

The deficiency cap: the variant a listing agent will try to insert

Sooner or later a listing agent will come back on your inspection condition and ask to swap it for the limited version at INSP-3, or to bolt a dollar threshold onto the general one. They will present it as reasonable. In their shoes, I would ask for it too.

What it does is replace your buyer’s discretion with an objective test. The inspection firm has to conclude that the building is sound in the defined respects and that what it found can be remedied under a stated figure. If the report comes in under the number, the condition is satisfied whether or not your buyer is happy, and the subjective element you were relying on is gone.

If you accept it, the number is the negotiation. Pick it against the house in front of you, not against a habit. Too low and a routine older-home report blows through it. Too high and the clause does nothing. And understand what the figure measures: a cost-to-remedy opinion from the inspection firm, which is not three contractor quotes, and inspectors vary widely in how willing they are to put numbers on paper at all.

Re-inspection: the right nobody drafts and everybody needs

The first is inside the condition period. With a remedy-style condition the buyer needs their inspector back to confirm the work was done properly, and INSP-4 and INSP-5 contemplate that second look. Draft your own remedy language without the return visit and the time to make it, and you have a repair promise with no verification and a deadline that expires before the trades arrive.

The second problem is after conditions are gone and before closing. INSP-14 is the broader right — a stated number of visits for a stated purpose. INSP-15 is a single further inspection on written notice. Neither is automatic. Without one, your buyer’s pre-closing walkthrough happens because the seller is being accommodating, and accommodating people stop being accommodating when a deal has gone sour.

Illustrative only, and my own wording, not OREA’s, to show the shape of the timing point rather than to be copied: the Buyer’s notice under this condition is not due until two business days after the Buyer’s inspector has attended a second time. One sentence like that is the difference between a remedy clause that works and one that runs out of road.

Notice, service and the calendar

These conditions are built on notice-to-fulfil. The buyer must deliver written notice inside the window saying the condition is satisfied. Say nothing and the agreement ends. Nobody has to send anything to kill the deal. That architecture is the thing I correct most often, because agents who learned the escape-clause shape elsewhere assume they must serve notice to get out.

The delivery method is not a detail. The condition points at the notice provisions of the agreement, and those provisions govern. In High Tower Homes Corp. v. Stevens, 2014 ONCA 911, a waiver delivered by fax where the agreement called for personal delivery was, as reported, ineffective. Read the notice provision before your window opens and confirm what your brokerage’s system actually sends.

What waiving costs: Coppendale v. Mills

Coppendale v. Mills, 2025 ONSC 5192, as reported: the buyers went in without an inspection condition, found moisture in the basement before closing and refused to complete, pointing at a seller warranty framed by the seller’s knowledge. The court read that warranty as speaking at signing, not as a continuing promise about the property at closing. The buyers lost the twenty-thousand-dollar deposit and were ordered to pay a further $206,703.56.

Read that number twice. The deposit is not the ceiling. A buyer who walks from a firm agreement is exposed to the seller’s actual loss, which in a falling market is the gap between your price and the resale price plus carrying costs. That is the sentence for a buyer who says they will just lose the deposit. The drafting behind it is in representations and warranties in an Ontario APS.

Your exposure as the registrant who drafted it

The usual claim against an agent on an inspection file is not that the clause was badly worded. It is that the agent said something about the clause that was not true, recommended an inspector who missed something, or was on the listing side and knew about a problem the buyer did not.

On recommendations: give your buyer a choice of firms, put the choice in writing, and let them retain whoever they want directly. Do not book the inspection in your own name and do not describe an inspector as one you can vouch for.

On the listing side, RECO Bulletin 7.4 is the one to know. Patent defects need not be disclosed, on caveat emptor logic, but actively concealing one removes that protection. Latent defects rendering a property unfit for habitation or dangerous must be disclosed, and where the seller’s representative knows of such a fact they are expected to disclose it to every interested buyer, obtain acknowledgements, and give each a copy. Those duties come from case law, not the TRESA regulations.

If the buyer on the other side is self-represented, the line is bright. Under TRESA you confirm they intend to proceed unrepresented, deliver and explain the RECO Information Guide and the Information and Disclosure to Self-Represented Party form, tell them you act for your client and not for them, and make reasonable efforts to get written acknowledgement of that form. You do not help them decide whether to include an inspection condition, or whether to waive.

How I run an inspection condition

1. Confirm inspector availability before you pick the number of days. A five-day condition on a week nobody can attend has already failed.
2. Pick the shape deliberately, and if remedy-style, get the return visit and the time for it into the document.
3. Count the window in business days you can use. A Thursday acceptance with a five-day condition gives you a weekend nobody works.
4. Calendar the deadline the day the offer is accepted, with a reminder the business day before and the notice provision in the same entry.
5. Attend if your client wants you there, and say nothing about severity, cost or whether to proceed.
6. Serve the notice in the form the agreement permits and keep proof of delivery.
7. If the condition fails, remember the agreement ending is not the deposit moving. Trust money is released only on a written direction signed by all parties, or a court order.

That last point catches people every time. The condition fails, everyone agrees the deal is over, and the buyer expects their deposit back on Monday. It does not come back until the direction is signed by both sides. Tell your buyer that before it happens.

Questions agents actually ask

Related reading

• Residential Lease Clauses in Ontario: What You Can Add, What the RTA Overrides
• The Parking Clause: One Line That Prevents a Closing-Day Argument
• Shore Road Allowances in Ontario: The Waterfront Clause That Decides Who Owns the Shoreline
• Zoning Conditions in Ontario: Re-zoning, Minor Variance and the Short-Term Rental Restriction
• No Offer Content Disclosure Clauses Under TRESA: What a Buyer Can and Cannot Restrict
• Every clause and condition guide in one place

This is professional commentary from a Broker of Record on drafting practice for inspection conditions, not legal advice. Whether a particular condition is enforceable, whether a buyer has exercised discretion properly, and what a failed condition means for the deposit are legal questions for the client’s own lawyer. This is general professional commentary from a Broker of Record on drafting practice. It is not legal advice, it is not a substitute for your own brokerage’s policies, and it does not create any professional relationship. Clause codes refer to OREA’s Guidelines for Residential and Commercial Clauses, an OREA member resource — the clause wording itself is OREA’s and is not reproduced here. Always work from your brokerage’s approved forms, and send your client to a lawyer for anything turning on interpretation, enforceability or remedy. Legislation, regulator guidance and case law all change; verify anything you are relying on.