The Agreement of Purchase and Sale (the “APS”) is the most important document in any real estate transaction in Ontario. It is a legally binding contract that outlines the terms and conditions of the sale of a property between a buyer and a seller. The APS is typically prepared by the seller’s real estate agent or lawyer and is presented to the buyer for review and signature. Once it is signed by both parties, it is considered a binding contract and any authorized changes or failure to abide by it can lead to serious ramifications.
The APS contains several key elements, including:
- Identification of the Parties: The APS identifies the buyer and seller by their legal names. This ensures that both parties are legally bound by the terms of the agreement.
- Description of the Property: The APS includes a detailed description of the property being sold, including its municipal address, legal description, and any special features such as a parking and/or locker unit.
- Purchase Price and Payment Terms: The APS specifies the purchase price of the property and outlines how and when the buyer is required to make payments. This may include a deposit to be paid upon signing the APS and the balance to be paid on closing.
- Conditions of the Sale: The APS may include conditions that must be met before the sale can be finalized. Common conditions include a satisfactory home inspection, financing approval, or the sale of the buyer’s current home.
- Closing and Title Search Date: The APS specifies the date on which the transaction is expected to be completed, known as the closing date. This is typically 30-90 days from the date of the agreement, but can vary depending on the needs of the buyer and seller. It also specifies the date on which the buyer’s lawyer must complete the title search of the property and provide the seller’s lawyer with a “requisition letter” outlining the required changes with respect to the PIN page of the property.
- Other Terms and Conditions: The APS may include other terms and conditions that are important to the buyer and seller, such as the inclusion of certain appliances or fixtures, or the seller’s obligation to make repairs or improvements before closing.
Once the APS is signed by both parties, it becomes a legally binding contract. If either party fails to fulfill their obligations under the agreement, they may be subject to legal consequences, including financial penalties or the loss of the deposit.
The Agreement of Purchase and Sale is a critical document in any real estate transaction in Ontario and the parties must do their best to abide by its terms. It is important for both buyers and sellers to carefully review and understand the APS before signing, preferably with their legal counsel.
More information? We’re here to help – [email protected] This WARDS LAWYERS PC publication is for general information only. It is not legal advice, nor is it intended to be. Specific or more information may be necessary before advice could be provided for your particular circumstances.
