A purchase agreement, also known as the Agreement of Purchase and Sale, is a legal contract between the condominium developer and condo unit purchaser.
Most local real estate boards will have an established standardized form outlining and addressing the main issues that should be present on any Agreement in Ontario. Though there are certain standardized features in the legal document, items can be changed or edited if both the buyer and seller agree to the changes.
Have a lawyer on your side
If you’re thinking about entering into an Agreement with a condo developer, you should always consult with an experienced lawyer prior to signing the document. They'll go over terms and conditions and help you understand any legal jargon.
Some basic information will always be included
Most of the Agreements that you come across will include some basic outlining information about the seller of the property, the buyer, and the condominium available for purchase.
There will be details about the proposed purchase price for the unit, offered by the buyer. Next, there will be information about the deposit being paid to the seller’s real estate agent, to be held in trust on the seller’s behalf.
The irrevocable offer period will also be explicit, ranging from a few hours to a few days. If the offer isn’t accepted by that deadline, the document will become void.
Note included/excluded fixtures and chattels
Your Agreement will also go over fixtures and chattels which are defined as items of property other than real estate.
Fixtures may be improvements made to a property that cannot easily be removed without causing some major property damage. For resale condos, these fixtures could be built-in cabinets or bookshelves, new flooring or hot water heaters. The outlined fixtures are usually included in the sale of the property, but can be excluded in writing.
If there are chattels included in the sale of the property, which are personal and movable items, they must be outlined in the Agreement. If the seller wants to include appliances, property maintenance equipment or related items in the sale it will be specified in this section of the document.
Review building specifics
Any interested buyer will need to know about the building their buying into. Details about shared spaces, condo fees, amenities, management, landscaping, parking, reserve funds and structural property will be disclosed to the prospective buyer.
Title, closing details and completion date
The purchaser’s lawyer will usually go over the finalizing requirements pertaining to the impending sale, including searching the property for faults or damages, seeing who actually owns the unit with the land registry, checking zoning bylaws and any existing debts.
When all the relevant information is reviewed and searches are complete, the sale will be finalized by the closing date written on the document. At this time, the parties’ lawyers will exchange documents and the unit will be vacated.
Most Agreements will also provide a range of conditions that must be met for the sale to close. For example, a home inspection prior to a deadline or an assumption of an existing mortgage.
Though most Agreements of Purchase and Sale are standardized, every buyer and seller can have items amended or removed if a consensus is reached between parties.