Condition vs. Warranty Clauses In Real Estate – What’s The Difference?

As a prospective buyer or seller of real estate, you may have encountered the terms “condition” and “warranty” – or alternatively, the longer form “representation and warranty”. If not, it is only a matter of time until you do. These terms are distinct and refer to different types of contractual obligations. Prior to signing your Agreement of Purchase and Sale, it is important that you understand the difference.

What is a Condition?

In an APS, a conditional clause legally operates as a “condition precedent”. A condition precedent is a legal term for some sort of event or action that must occur before the transaction can be completed.

In real estate transactions, buyers will often insist or request that certain conditions be included in the APS. These conditions help protect the buyer against common pitfalls and give the buyer a chance to investigate and decide whether to proceed. However, these aren’t necessary clauses, and some buyers will purposefully make unconditional offers