An agreement of purchase and sale (APS) is a legally binding contract to either buy or sell a specific property.
As the agreement is a legally binding contract it is ruled by contract law. If either party break the contract after all conditions has been fulfilled, they may be sued for breach of contract.
Your realtor or your lawyer draws up these contracts. The form is mostly a standard form contract that your realtor or your lawyer fills in with your assistance. It’s not a good idea to sign an APS without consulting with a realtor or lawyer first.
An APS can vary from one province/territory to another. Some provinces/territories regulate the purchase of homes or condominiums a bit differently and therefore what an APS looks like depends on the province or territory in which it is written.
Some of the similarities include:
- Names of the buyers and sellers;
- Date of contract;
- Contact information;
- Legal description and parcel identifier;
- Chattels and fixtures;
- Actual address of the property;
- Purchase price;
- Amount of deposit;
- Date the offer expires;
- Title searches;
- Date of completion/closing date.
The items that usually vary form one contract to another are the conditions that are included in the agreement.
Every buyer and seller may have his or her own conditional requirements for the contract.
There are some conditions that are included in almost all contracts, for example:
- The clause that the contract is conditional on the buyer getting approved for financing, usually meaning a mortgage, unless the buyer is able to pay for the house without having to get a mortgage;
- That the house has to be left vacant after the sellers depart;
- Right of the buyers inspecting the premises a few times before closing;
- The buyer’s request to the seller of being given any existing surveys;
- Zoning details;
- Any and all due diligence documents in the seller`s possession;
- That the seller complied with all legislation while he or she possessed the property.
More popular clauses that are usually included in a contract are:
- That the premises have to be in reasonably clean condition;
- Building inspection clauses;
- That chattels and fixtures should be in good working order and free from any liens or encumbrances.
There are no ends to clauses or conditions that can be added to an APS. Some conditions are more important than others and you should consult with your lawyer and realtor to determine which clauses and conditions fit your needs the best.
Canada Mortgage and Housing Corporation – The Buying Process
What is a Contract and When is it Legally Binding?
Understanding the Agreement of Purchase and Sale Ontario Real Estate Association