Below is an example of terms you may find in the contract of purchase and sale.
If you have any further questions after reading this please let me know.
Information About The Contract Page
The first page is not part of the contract of purchase and sale but merely an important information page for the buyers and sellers. Reading and understanding this page will help you have a smooth conveyance with no surprises. Please make note of the customary cost potentially borne to either buyer or seller.
This is where you the buyer or seller would put down the price you want to buy or sell for.Deposit
This is the total amount of the deposit that will be taken under the terms outlined below (the deposit of $ amount is too placed in trust to RLP upon subject removal).Terms and conditions
This section of the contract is where we fill in the subject clauses, statements, warranties required by the parties. If there is more room needed there can be an addendum page added for further subject clauses.Completion
This simply describes the date on which registration will occur: the date that the money and title will change hands. This will always be a weekday, and usually 2 days before possession to allow the sellers to receive payment before handing over the keys.
(Leased land and mobile homes require 2 weeks between completion and possession).
This date is always AFTER completion and it identifies the time and date of possession.
Possession may be physical (actually moving in) or legal (as taking possession subject to an existing tenancy). Most often the buyers will obtain both legal and physical possession at the same time, but this is NOT a necessity. Know that physical possession won’t occur until the sellers have been paid. If in fact the home is tenanted adequate time must be given for the proper legally required notices to be served in sequence, in order to allow the sellers to provide vacant possession.
This is usually, but not required to be, the same day as the possession date. This is the date the buyers start paying for items such as maintenance fees, hydro, property tax etc…Included items
Thisdescribes all chattels and fixtures the buyer or seller would like to be included or excluded in the purchase or sale of the home.Viewed
This explains the date the buyers viewed the property and indicates that the property will be in substantially the same condition as viewed when title is transferred.Title
This explains that the buyers or sellers are purchasing the property with the expectation that all title of the home and property are free and clear of all or any encumbrances and that the buyers or sellers and or buyers’ agent will check with the land title office and alert the buyer of any restrictions or zoning issues. I would recommend the buyers or sellers seek legal advice from a notary or lawyer. I am knowledgeable, but having said that, I am not a lawyer.Tender
This just means you have to pay in good Canadian monies.Documents
This indicates the registration process to be followed.Time
This particular paragraph says that all dates on this contract must be adhered to and if the buyers have not made arrangements to complete by the completion date, then the sellers have the option to terminate the agreement and the buyers’ deposit will be forfeited to the sellers on account of damages, without prejudice to the sellers’ other remedies. It does not say that the seller must terminate the contract. It is important that the sellers never make a snap decision on this. I would always recommend that the sellers obtain legal advice if they are uncertain of anything at all.Buyer financing
This clause clarifies what happens when buyers require a new mortgage, which can only be registered once the title has passed to the buyers. The buyers must have provided their own funds to the sellers and have made the required arrangements for a mortgage with the lenders and the conveyancer acting for the buyers.Clearing title
This clause addresses the situation where the sellers require the buyer’s funds to provide a clear title to the buyers.Costs
The buyer agrees to pay the costs involved in arranging the financing and transferring the title. The sellers must pay the costs of providing clear title. (On the back of the contract there is a more complete statement of the costs that may be encountered.Risk
The buyers must arrange for the property to be insured effective on the day that the title and money changes hands (completion date).
Note that it becomes effective at 12:01 am on this date, which coincides with most home insurance policies. Buyers will insure the property the day before completion to be on the safe side.
This paragraph reiterates basic contract law: you really cannot escape this agreement by dying! Any reference to the sellers or the buyers in this contract includes their heirs, executors and other listed here. The contract does not terminate upon the death of one of the parties.Representation and warranties
This contract and all of its promises will survive completion. This basically means that it is enforceable in the future after the completion date. For instance, if the buyer moved in and later discovered that the property was insulated with asbestos for instance, and the sellers warranted that is was not, the buyers would have the right to seek legal action.
This does not include any verbal agreement.
Know that with the privacy act there are very few people that have access to your private information but due to the nature of this business I will be asking you for some personal information. The buyers and sellers upon signing this contract of purchase and sale give written consent to the use of their information by the parties named for the purpose outlined within this section.Agency disclousre A&B
This first example represents the situation where there are 2 separate real estate brokerages involved in the transaction. (one agency for the buyers and one agency for the sellers)Agency disclosure with a limited dual agent.
This is where the same real estate brokerage is representing both the buyer and the seller (where the same brokerage including a branch office of the same brokerage is representing both buyer and seller). Before anything really happens all parties will agree and sign what is called a limited dual agency agreement.Acceptance irrevocable
The buyer and the seller acknowledge that the solemn promise made in the contract are executed under seal. The sellers understand and agree that they may not revoke any accepted conditional offer until the time for the buyers to remove their terms and conditions or any options contained in the contract has expired.This is a legal document
This basically enlightens the parties of the nature of what they are signing.The offer
This is where the expiration of the offer is detailed: date and time. If there is a counter-offer, be sure that the expiry date and time are adjusted to the counter offer. All the buyers must sign and have their signature witnessed where possible.Acceptance
The sellers acknowledge and approve the offer subject to the conditions set forth. The signature must be witnessed and an indication of authority must be shown in case of power of attorney, estate sales etc.