Conditional on Sale of Property in Ontario: The SC Escape Clause Explained

Quick Start: Pick your situation

I’m a buyer and I need to sell my current home first (I want a condition on sale of property).

1. Start with “Conditional on sale of property: what it really means” to understand what must happen for your deal to become firm.
2. Then go to “What this means for buyers” (mini-checklist to reduce panic when timelines tighten).
3. Finish with “Step-by-step process: from conditional offer to a firm deal (Buyer 1)” so you don’t miss deadlines or notice steps.

I’m a seller and I received an offer conditional on the buyer selling their home (I’m worried about being tied up).

1. Start with “Why sellers ask for an escape clause” to see what you’re protecting against.
2. Then go to “What this means for sellers” (what must be crystal clear in the wording + why strict notice compliance matters).
3. Finish with “Common mistakes” to avoid the errors that most often lead to disputes.

My listing says SC/SCE and I don’t know what that means.

1. Start with “What is SC escape clause?” for plain-English definitions.
2. Then go to “How the escape clause works” so you understand what “right of first refusal” actually looks like in real life.

I’m the conditional buyer and I just got notice under an escape clause (or my agent says it could happen).

1. Start with “How the escape clause works” (so you understand what the notice is doing).
2. Then go immediately to “Step-by-step process (Buyer 1)” (what to check the same day—deadlines, delivery method, and what “firming up” requires in your APS).
3. After that, review “Common mistakes” (especially waiving too quickly and missing notice details).

Reminder: This is where a quick contract review can be valuable because the timeline and notice method are clause-specific.

I’m a backup buyer, and the property is SC or SCE. Can I still offer?

1. Start with “What is SC escape clause?” to understand what SC/SCE signals.
2. Then go to “Step-by-step process (Buyer 2)” to understand how backup offers usually work (often conditional on release of the first deal).
3. Finish with FAQ: “Can I still make an offer on an SC/SCE property?”

I’m worried about my deposit in a conditional-on-sale deal.

1. Start with “Conditional on sale of property: what it really means” (how conditions typically end).
2. Then go to FAQ: “Do I lose my deposit if my home doesn’t sell?”
3. Also review “Common mistakes” (misunderstanding what triggers release vs. default).

My sale and purchase closing dates don’t line up (I may have a gap).

1. Start with “What this means for buyers” (planning for pressure + timing gaps).
2. Then go to “Common mistakes” (closing coordination is a big one).
3. Finish with FAQ for practical expectations.

I’m buying or selling a condo, and the conditions involve a status certificate (plus a sale-of-property condition).

1. Start with “Conditional vs. firm” under “Conditional on sale of property: what it really means.”
2. Then go to “Step-by-step process (Buyer 1)” and focus on “book due diligence early” (because a short escape-clause notice window can squeeze review time).

This is commercial real estate (or a business deal) and the condition/escape clause feels more complex.

1. Start with FAQ: “How does this work in commercial real estate?”
2. Then go to “Step-by-step process” and treat it like a due diligence timeline you need to manage (financing, leases, environmental, zoning, corporate approvals—depending on the deal).

What is the SC Escape Clause? What’s the Difference Between SC and SCE?

SC (Sold Conditionally) means the property is under a conditional agreement, but no firm commitment has been made yet. The conditions could include things like financing approval or the sale of the buyer’s current home. It does not allow the seller to entertain other offers while conditions are being met.

SCE (Sold Conditionally with Escape Clause) takes this a step further. It includes an escape clause (also known as a right of first refusal), allowing the seller to keep marketing the property and accept a better offer if one comes in during the conditional period. If a competing offer is received, the seller serves notice to the first buyer, giving them a short window (typically 48-72 hours) to firm up the deal or release it, allowing the seller to proceed with Buyer 2.

To summarize, the SC escape clause means there is a conditional deal in place, but the seller has the right to accept another offer if the first buyer cannot fulfill the conditions within a defined notice period.

Important: SC and SCE are market labels and don’t define your rights. Those come from the specific terms in the Agreement of Purchase and Sale (APS) and any schedules. In Ontario, many transactions use standardized forms (such as OREA forms), but the final wording of your signed agreement is what counts.

Conditional on Sale of Property: What it Really Means

A “sale of buyer’s property” condition means the buyer’s obligation to purchase is conditional on the buyer selling their current home within a set time. Ontario’s real estate regulator notes that buyers may consider making an offer conditional on key factors, including the sale of their existing home.

While conditions vary, the core idea is consistent: the deal stays conditional until the buyer either (a) satisfies the condition and gives the required written notice, or (b) the condition expires (or is waived or extended), depending on the agreement.

Most agreements also address what happens if the condition is not met by the deadline. In many cases, the agreement ends and the deposit is dealt with as the contract specifies (often returned if the condition isn’t fulfilled—depending on the clause). A commonly used “sale of buyer’s property” condition is drafted this way in practice (with notice and a defined deadline).

How the Escape Clause Works

An escape clause (also called a “right of first refusal” or “bump clause”) is a negotiated “pressure valve” for the seller when the first deal could remain conditional for a longer period—often because the buyer needs time to sell.

A common structure looks like this:

1. Buyer 1 and the seller sign an accepted offer that is conditional on Buyer 1 selling their home (and sometimes other conditions like financing or inspection).
2. The agreement includes an escape clause allowing the seller to keep marketing the property and to accept a competing offer that meets the seller’s requirements (Buyer 2).
3. If the seller receives a competing offer they want to proceed with, the seller serves Buyer 1 a notice exactly as required by the agreement.
4. Buyer 1 then has the notice window set in the contract to either firm up (by waiving/fulfilling conditions properly) or step aside so the seller can proceed with Buyer 2.

Chart 1: How a Conditional-on-Sale Offer with an Escape Clause Works