Can a deposit become non-refundable only after the conditions are removed?

Nothing in the question is automatic. A deposit in a business purchase is whatever the agreement says it is, and an agreement can say the deposit is refundable while certain conditions are open and not refundable once they are removed. Whether yours does depends on its wording, so the useful step is to find the clause and read it alongside the conditions section.

Read the conditions section

Read the conditions section for what each condition requires, who it benefits, and what the agreement says happens when it is removed or waived. If the deposit clause makes the deposit refundable only where a condition fails, ask what the clause says once the condition has been removed.

What to look for in the wording

• Whether the deposit turns non-refundable on removal, on a stated date, or only on default.
• Whether removing one condition affects the deposit when others remain open.
• Whether removal must be in writing, and who must sign it.

Can a court step in?

In some provinces a court has power to relieve against forfeiture. Ontario’s Courts of Justice Act, section 98, says a court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just. British Columbia’s Law and Equity Act, section 24, says the court may relieve against all penalties and forfeitures, and Alberta’s Judicature Act, section 10, says that, subject to appeal as in other cases, the Court has power to relieve against all penalties and forfeitures. These are discretionary powers, not a promise that a clear clause will be set aside, and other provinces may treat it differently.

Before you remove a condition

Confirm in writing what happens to the deposit at that moment, and ask your lawyer to check it against the agreement. The page on whether a seller can keep a deposit if you back out shows how the same clause is read once a deal ends.