Who Prepares the Agreement of Purchase and Sale in Ontario?

The purchase or sale of a property is a major financial decision, and the associated legal process is highly intricate and complex. In Ontario, like other provinces in Canada, the Agreement of Purchase and Sale is a vital document that plays a central role in the entire process, and is usually prepared by a real estate lawyer. This agreement encapsulates all the conditions, terms, and financial aspects of the deal, ensuring that both the buyer and seller are on the same page about what is being transacted. It helps prevent disputes and misunderstandings that could come up in the future. But who prepares this agreement?

How it Works

In Ontario, the Agreement of Purchase and Sale is typically prepared by the real estate agent or the lawyer representing the party making the offer - in most cases, the buyer. They will use a standardized form known as the OREA Form 100, created by the Ontario Real Estate Association. The form is comprehensive, covering numerous elements to consider when buying or selling a property. Once filled, it becomes a legally binding contract when both the buyer and seller sign it.

You should note that while the real estate agent can fill out the standardized form, they cannot provide legal advice. A professional real estate lawyer is necessary to review the agreement, provide legal guidance, and make sure the terms are favorable and fair to their client.

Documents Needed for the Agreement of Purchase and Sale (OREA Form 100)

The Ontario Real Estate Association (OREA) Form 100 is the primary document used to create an Agreement of Purchase and Sale. It encompasses crucial aspects like the property's legal description, the purchase price, the deposit amount, completion date, and specific terms and conditions.

While filling out this form, the following documents and information are necessary:

Property Details

This includes the legal description of the property, including its municipal address, the lot number, and the plan number.

Purchase Price

The agreed-upon price that the buyer will pay for the property.

Deposit Information

Details of the deposit the buyer provides upon signing the agreement.

Chattels Included and Fixtures Excluded

Information on what is included and what is excluded in the sale, such as appliances, light fixtures, etc.

Closing Date

The date on which the buyer will take legal possession of the property.

Most Common Issues When Buying Real Estate

Purchasing real estate is not always a smooth process. Here are some of the most common issues buyers face:

• Property Disclosure Issues: Sometimes, sellers may fail to disclose certain issues with the property, such as structural problems, mould, or pest infestations.
• Title Issues: These can include liens, easements, or disputes over property boundaries.
• Financing Issues: Buyers may face challenges securing the necessary financing or mortgage approval.
• Inspection Issues: Home inspections may uncover significant issues that need to be addressed, which can cause disputes over who is responsible for fixing them.
• Legal Issues: This can range from complex local zoning laws to potential legal disputes with neighbors.

What's Included in the Agreement of Purchase and Sale

Identifying Details: This includes the names of the buyer and seller and the property address.

Purchase Price: The price agreed upon by both parties.

Deposit: The amount the buyer will place in trust as a demonstration of good faith.

Chattels and Fixtures: The agreement specifies which fixtures and chattels (personal property) are included in the sale.

Closing Date: The date when the ownership of the property will be transferred from the seller to the buyer.

Conditions: These are specific conditions that must be met before the sale can be finalized, such as a successful home inspection or the buyer securing financing.

Conditions You Should Include in Your Agreement of Purchase and Sale

When crafting your Agreement of Purchase and Sale, you might want to consider including the following conditions to protect your interests:

Financing Condition

This condition ensures that the deal is subject to the buyer securing appropriate financing.

Inspection Condition

This allows the buyer to have a professional inspection of the property to uncover any potential issues.

Insurance Condition

This ensures that the buyer can obtain adequate property insurance.

Sale of Current Home Condition

If the buyer needs to sell their current home to purchase the new one, this condition allows for that scenario.

Title Search Condition

This ensures the buyer's lawyer can conduct a title search to verify there are no issues with the property's ownership.

Contact TDJ Law for Help with Your Agreement of Purchase and Sale in Ottawa

The process of buying or selling a property involves numerous legalities that can be overwhelming for individuals without a background in real estate law. That’s why it’s so important to engage professionals like TDJ Law. Our team is well-versed in the intricacies of real estate law in Ottawa, and we're ready to guide you through the process of preparing and reviewing your Agreement of Purchase and Sale. Our aim is to ensure a smooth transaction, giving you peace of mind knowing that your interests are well-protected. Contact us for all your real estate legal needs and help with OREA Form 100.