Humber/Ontario Real Estate Course 3 Exam Practice

For what reason might a waiver provision not be included in a buyer's agreement to assume an existing mortgage?

1. The mortgagee's approval is required, making waiver by buyer inapplicable.

2. The waiver does not protect the buyer’s interest properly.

3. The condition can be legally ignored by the buyer.

4. The waiver can be included but is non-binding.

5. Only the lender can authorize such a waiver.

6. The seller must also agree to the waiver for it to be valid.

The correct answer is: The mortgagee's approval is required, making waiver by buyer inapplicable.

The reason the inclusion of a waiver provision might not be appropriate in a buyer's agreement to assume an existing mortgage is primarily due to the requirement for the mortgagee's approval. When a buyer assumes a mortgage, it is important to note that the lender (mortgagee) has a vested interest in the agreement. The lender typically requires certain conditions to be met for the assumption to be valid, which may include approving the buyer’s qualifications and the terms of the assumption. In such cases, the buyer's waiver—allowing them to bypass certain requirements—would be inapplicable, as the lender's consent remains paramount in this process. The lender’s approval is not just a formality but a necessary step in ensuring that the buyer can responsibly take on the existing mortgage obligations. This requirement forms the basis of why a waiver provision would not be included in the agreement, as it does not grant the buyer the autonomy to negate lender requirements.