Posted on
July 2, 2025
by
Michael Jakobczak
Escape clauses—sometimes called kick‑out, release, or 72‑hour clauses—are contractual provisions used in Ontario’s real estate market to give both buyers and sellers flexibility during home transactions.
🏡 What Is an Escape Clause?
An escape clause allows one party to walk away from a home purchase if a certain condition isn’t met, without penalty. These conditions typically include:
Buying a home contingent on selling your current property
Financing approval (mortgage contingency)
Satisfactory inspection or appraisal results
Resolving title issues
A buyer having a fixed time period to waive their conditions once notified of another offer (common 48–72 hour rule) (johnson-team.com, ldlaw.ca, apnews.ca, apnews.ca)
A classic example: a buyer’s offer is conditional on selling their home. The seller accepts but adds an escape clause, letting them continue marketing. If a better offer comes in, the seller notifies the first buyer, who then has a limited window (commonly 48–72 hours) to remove their condition or return the deposit and walk away (ldlaw.ca).
Why Use Them?
🔹 Sellers
Reduce risk of being tied up indefinitely by a conditional offer
Keep property active on market and attract other buyers
Pressure buyers to act fast or step aside (apnews.ca)
🔹 Buyers
Make an offer while securing financing or selling another property
Protect deposit if conditions can’t be met
Retain first-right refusal if another offer arrives (johnson-team.com)
How It Works
Clause written into an Agreement of Purchase & Sale (APS), specifying the event—e.g. buyer’s home sale.
Seller receives another offer above a set threshold.
Seller issues a notice—"you’ve got 48 hours to firm up conditions or we’ll move to the new offer."
If the buyer doesn't act in time, contract ends, deposit returns, and seller accepts higher offer (reddit.com).
Real-World Insight
Reddit users in Ontario’s real estate groups frequently encounter "Sold Conditional Escape Clause (SCE)" listings:
“It means buyers has to sell their property first… but some escape clauses …mean the seller is still open to other potential buyers.” (reddit.com)
“If the seller received a firm offer from a second buyer, the first buyer would have some amount of time (24‑48 hours?) to firm up their offer or walk away.” (reddit.com)
These reflect how both sides benefit: sellers gain flexibility; buyers get protection—provided the clause is clearly worded.
🧭 Potential Pitfalls
Sellers may end up back on market if no better offers appear or buyer can't meet conditions.
Buyers feel pressure or lose the property if conditions drag on too long.
Poorly drafted clauses can lead to legal disputes (ownright.com, bigcityrealty.ca, apnews.ca).
Pro Tips from Experts
Be crystal clear about triggers, deadlines, and notice methods.
Choose a reasonable notice period—48–72 hours is standard in Ontario.
Consult with a real estate agent or lawyer to avoid ambiguity or unenforceable terms (apnews.ca, johnson-team.com).
🤔 Why Use Them Now in Ontario?
With fluctuating real estate conditions, escape clauses strike a balance:
In cooling markets, conditional offers become common—escape clauses let sellers stay agile.
Buyers in tight financial or home‑sale situations can still submit competitive offers by including an escape clause (ldlaw.ca).
✅ Bottom Line
Escape clauses (SCEs) are valuable tools in Ontario’s real estate negotiation landscape. They:
Enable buyers to protect their interests,
Offer sellers a way to stay market‑ready,
Depend on clear contract drafting and reasonable timelines.
If you're considering an escape clause—whether buying or selling—talk with your agent or lawyer to ensure it's structured properly and protects your goals.
Let me know if you'd like help crafting one or spotting it in a listing!
