An Agreement of Purchase and Sale is the legally binding written contract between a buyer and a seller that sets out all the terms and conditions of a real estate transaction in Ontario. Once signed by both parties, it governs everything from the purchase price and deposit to the closing date and any conditions that must be fulfilled before the deal is final.
In Ontario, nearly all residential transactions use a standardized template created by the Ontario Real Estate Association. OREA Form 100 is used for freehold properties such as detached and semi-detached houses and freehold townhomes, while OREA Form 101 is designed specifically for condominium resales and includes additional sections covering maintenance fees, parking and lockers, and the status certificate. Licensed real estate agents prepare these forms on behalf of their clients, though there is no legal requirement to use the OREA template. A buyer and seller are free to have a lawyer draft a custom agreement, provided it complies with Ontario contract law.
The agreement covers several key components. The offer price states what the buyer is willing to pay for the property. The deposit, typically between two and five percent of the purchase price, is held in trust by the listing brokerage. An irrevocable date establishes how long the offer remains open for acceptance. If the seller does not accept before this deadline, the offer expires. The closing date, sometimes called the completion date, is when ownership formally transfers and the buyer takes possession.
Most agreements also include conditions. A financing condition gives the buyer time to secure mortgage approval. A home inspection condition allows for a professional assessment of the property. In condo transactions, a condition for review of the status certificate is standard. If a condition is not satisfied by its deadline, the agreement typically becomes void and the deposit is returned to the buyer. To learn more about how conditions work, see What Is a Conditional Offer in Ontario Real Estate?
Because all agreements for the purchase and sale of land in Ontario must be in writing to be enforceable, this document carries significant legal weight. Backing out without a valid contractual reason can result in the forfeiture of the deposit or a lawsuit for damages. Having a real estate lawyer review the agreement before you sign is strongly recommended.
