Subject Removal in BC: What "Subject to Financing/Inspection" Actually Means

The two protections are different tools. The HBRP costs the buyer a rescission fee equal to 0.25 percent of the purchase price (so $2,500 on a $1 million home) and applies automatically. Subject removal costs nothing if the buyer walks for a legitimate reason within the subject window. Most buyers rely on subjects for due diligence and treat the HBRP as a last-resort safety net.

Subject to Financing

This is the most common subject in BC offers. It protects the buyer from being forced to close on a property they cannot actually finance. Even with a pre-approval in hand, the lender has to approve the specific property before issuing a formal commitment.

What lenders verify during a financing subject:

• Appraisal: The lender orders an independent valuation. If the appraisal comes in below the purchase price, the lender will only fund based on the lower number, leaving the buyer to top up the difference or back out. Read more in our guide to home appraisals in BC.
• Income verification: T4s, recent pay stubs, notices of assessment, employer letters, and self-employment statements where relevant.
• Debt service ratios: Gross Debt Service and Total Debt Service ratios must fit lender thresholds, typically 39 percent and 44 percent respectively for insured mortgages.
• Down payment confirmation: 90-day account history showing the source of funds, plus any gift letters.
• Property eligibility: Some lenders restrict leaseholds, age-restricted strata, post-tension cable buildings, or properties with active special assessments.

Pre-approval is a soft commitment based on the buyer's profile alone. A formal commitment requires the property itself to pass lender review. That is why the financing subject exists separately from pre-approval.

Subject to Inspection

A home inspection is paid for by the buyer, usually $400 to $800 depending on the property type and size. The inspector spends 2 to 4 hours examining the structure, roof, foundation, electrical, plumbing, HVAC, and visible insulation, then delivers a written report.

Common BC inspection findings to watch for:

• Knob-and-tube wiring: Common in pre-1950 homes. Insurance carriers may refuse to cover it or require replacement.
• Asbestos: Used in insulation, drywall mud, popcorn ceilings, and vinyl flooring through the late 1980s. Removal is expensive and triggers safe-work procedures.
• Leaky condo era issues: Buildings constructed roughly between 1985 and 2000 in coastal BC have a documented history of envelope failure. Always check for remediation records.
• Polybutylene plumbing: Grey plastic supply lines installed in some 1980s and 1990s homes that fail under pressure.
• Aluminum wiring: Used in some 1960s and 1970s homes. Requires special connectors at every outlet and switch.
• Roof and drainage: West Coast rain exposes any deferred maintenance quickly.

If the inspection turns up something material, the buyer can either remove the subject, negotiate a price reduction or repair credit, or walk away. Sellers are not obligated to fix anything during the subject period unless the contract specifically requires it.

Subject to Title Review

The title search is usually handled by the buyer's lawyer or notary. They pull the current Land Title Office record and look for anything that could affect ownership or use of the property.

What title review covers:

• Mortgages and financial charges: Confirmed clear at closing.
• Easements: Rights granted to third parties to use part of the land, often utility companies or neighbours.
• Restrictive covenants: Building restrictions registered against title, such as no fences over a certain height or specific architectural standards.
• Statutory rights of way: Government or utility access rights.
• Agricultural Land Reserve (ALR): Properties inside the ALR have provincial restrictions on subdivision, use, and dwelling size.
• Liens or judgments: Unpaid contractor claims, tax liens, or court judgments against the seller.

Most title issues are cleanable before closing. The point of the subject is to catch the rare deal-breakers, such as a covenant restricting the use you planned for the property.

Subject to Property Disclosure Statement

A Property Disclosure Statement (PDS) is a seller-completed form that asks specific yes-no-unknown questions about the home. It is not a warranty, but it does become part of the contract once incorporated, and a seller who knowingly misrepresents an answer can be sued later.

Key items on the PDS to scrutinize:

• History of water ingress, leaks, or flooding
• Structural issues, settlement, or foundation cracks
• Past insurance claims on the property
• Active or resolved neighbour disputes
• Prior use as a grow operation or meth lab
• Underground oil tanks (common in older Vancouver homes)
• Renovations done without permits

If a seller answers "unknown" to a question that should have a clear answer, ask why. Unknown answers on basic items often signal something the seller does not want to put in writing.

Subject to Strata Documents

If the property is a strata (condo, townhouse, or some duplexes), the buyer is entitled to review at least the past two years of strata records. This is the single most important subject in any strata purchase and the one buyers most often rush.

Strata documents to read, in order of priority:

• Council and AGM minutes (past 2 years): Look for recurring complaints, water leak history, ongoing litigation, and pending decisions.
• Depreciation report: Required for most BC strata corporations. Identifies the building's major capital expenses over the next 30 years.
• Contingency Reserve Fund (CRF) balance: A healthy CRF typically equals 25 to 100 percent of annual operating expenses. Underfunded CRFs lead to special assessments.
• Special assessments: Past, current, and planned. A history of repeated assessments suggests a building that lives hand-to-mouth.
• Engineering reports: Building envelope, plumbing, elevator, and roof reports.
• Form B: Confirms current strata fees, any owner debts, parking and storage assignments, and pending bylaw violations.
• Bylaws and rules: Check restrictions on rentals, pets, short-term rentals, age, and renovations before you remove subjects.
• Insurance certificate: Confirms the building is covered and shows the deductible structure.

For a deeper checklist on what to flag in strata records, see our strata due diligence guide. The Strata Browser on Zealty covers more than 14,000 BC strata buildings with documents and history in one place.

Subject to Sale of Buyer's Property

This subject lets buyers make an offer contingent on selling their existing home first. It is less common in seller's markets because most sellers will not accept it. When sellers do accept, the contract usually includes a 72-hour clause: if another firm offer comes in, the original buyer has 72 hours to either remove the sale-of-property subject or step aside.

This subject works best in balanced or buyer's markets, or when the buyer has already accepted a firm offer on their current home.

How to Remove a Subject

Subject removal in BC must be in writing. A verbal commitment does not count. The buyer's agent prepares a removal addendum signed by the buyer that lists each subject being removed and is delivered to the seller's agent before the deadline.

Buyers have three options at the deadline:

• Remove all subjects: The contract becomes firm and binding. The deposit is no longer refundable for any reason connected to the subjects.
• Request an extension: Done by mutual agreement in writing. Common when financing is delayed or strata documents arrive late.
• Walk away: Let the subject period expire, or formally notify the seller of non-removal. The deposit is returned to the buyer.

Partial removal is allowed but should be done only with legal advice. Removing some subjects while leaving others creates messy contract language that can cause problems at closing.

What Happens If Subjects Are Not Removed

If the buyer cannot satisfy a subject in good faith, the contract collapses automatically at the deadline. The buyer recovers the deposit in full, and both sides go their separate ways. There is no penalty as long as the buyer made a reasonable effort.

Bad faith is a different story. A buyer who uses subjects as a stalling tactic, never intending to satisfy them, can be sued for breach. Courts in BC have ruled against buyers who applied for financing they knew would be declined, or who skipped inspections they had agreed to perform. The standard is whether the buyer made an honest attempt.

Subject-Free Offers in Hot Markets

In strong seller's markets, particularly in Metro Vancouver during the 2016 to 2017 and 2021 surges, buyers competing in multiple-offer situations regularly wrote subject-free offers. The seller's risk drops to zero because the deal is firm on signing.

The buyer's risk goes up dramatically. To write a subject-free offer safely, a buyer needs to:

• Get a pre-inspection done before the offer is written, with a written report in hand
• Have a formal mortgage commitment, not just a pre-approval, with the specific property already reviewed by the lender
• Review all strata documents, title, and the PDS before submitting
• Be prepared to absorb any cost overruns or surprises after closing

Subject-free is not the same as careless. Every check that would happen during a subject period is done before the offer is written. Buyers who skip steps to compete on speed are taking on real financial risk. The Home Buyer Rescission Period is the only remaining backstop, and it costs 0.25 percent of the purchase price to use.

Bottom Line for BC Buyers

Subjects exist to protect the buyer's due diligence window. Use them. Read every document, ask every question, and never let a tight market push you into removing subjects before you are ready. The deposit at risk on a $1 million BC home is typically $50,000. That money is on the line the moment subjects come off.

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