Encyclopedia
Subject removal
Confirming conditions are satisfied or waived, making the contract firm.
For example: A buyer removes subjects after inspection. (Illustration only, not a real deal.)
This is a general industry term with no single official definition. Your lease or contract wording controls.
Example only, not a real client. Say you have ten business days to complete due diligence on a warehouse. Your reports come back clean and your financing is approved, so you sign the subject removal and your deal becomes firm.
What I’d tell a friend
Do not remove subjects until your checks are truly done. After removal, walking away can cost you your deposit and more.
Why it matters to you
Once subjects are removed, the deal is usually firm and your deposit is at risk. Problems you find after are mostly yours, so finish your checks before you remove them.
How to use it in your deal
Buyers should only remove subjects once each condition is truly satisfied: written loan approval with acceptable conditions, inspection and environmental reports read, documents reviewed, and title checked. Watch the deadline closely and ask for an extension in writing before it passes if you need more time. Sellers should press for clear deadlines and decide whether to accept extensions.
Agents and lawyers should keep records. Tenants signing an offer to lease face similar conditions. Once subjects are removed, backing out usually means losing the deposit and possibly more. Put each subject removal in writing and keep a copy with the dates.
Mistakes I see
Removing subjects to win a deal without finishing checks. Missing the deadline. Assuming a verbal extension counts. Not reading lender conditions.
In BC and Vancouver
Subject clauses are a matter of contract; BC courts have addressed vague subjects and good faith. BC Financial Services Authority (BCFSA) publishes guidance on subjects for licensees.
Official sources: BC Financial Services Authority · CanLII (court decisions)
What it means
Subject removal is when a buyer or seller confirms in writing that a condition in the contract has been met or waived. Once the subjects are removed, the contract is firm.
Common subjects include financing, inspection, review of documents and approvals.
Before you remove
Confirm that financing is approved in writing, reports are back and documents have been reviewed.
If you need more time, ask for an extension in writing before the deadline. Check with a BC lawyer on your options.
Questions to ask before you sign
- What subjects are in my contract?
- When do they expire?
- Is each one satisfied?
- Do I need an extension?
- What happens if I walk away after removal?
Keep reading
Related terms: Subject clause, Deposit
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.