Humber/Ontario Real Estate Course 3 Exam Practice

Why is a clause related to the Planning Act included in a purchase agreement?

1. This clause authorizes the buyer to search the title of the property.

2. This clause ensures that the seller provides a survey to the buyer.

3. This clause protects the buyer if a severance is required in order to transfer title.

4. This clause benefits the seller if the current use is not lawful.

The correct answer is: This clause protects the buyer if a severance is required in order to transfer title.

The inclusion of a clause related to the Planning Act in a purchase agreement primarily serves to protect the buyer regarding issues related to land use and zoning. When a severance is required, it generally means that the property is being divided into separate parcels or lots. The clause ensures that the buyer is aware of and safeguarded against any legal implications or conditions that may arise from this division, which is governed by the Planning Act. This protection is essential because it addresses the potential for complications in transferring title if the severance is not properly addressed or if the uses of the land do not comply with the local planning regulations. By including this clause, the purchase agreement acknowledges the regulatory framework surrounding land use and confirms that the necessary approvals are in place or that the buyer is aware of what may be required post-purchase. In summary, the relevance of the Planning Act clause is tightly tied to ensuring that the buyer has legal recourse concerning the severance process, which is vital for confirming the lawful transfer of title and subsequent use of the property.