Toronto Real Estate Lawyers (Part 12): Agreement of Purchase and Sale

As a follow up to my previous article about Agreements of Purchase and Sale (for residential properties - see http://dynamiclawyers.com/DL_blog/page/toronto-real-estate-lawyers-part-10-agreement-of-purchase-and-sale/14/) - which dealt with the Information Section, Price, Deposit, Irrevocability Clause, and Completion Clause - and my other article (http://dynamiclawyers.com/DL_blog/toronto-real-estate-lawyers-part-11-agreement-of-purchase-and-sale/14/) about Fixtures and Chattels, Rental Items and Title Search, I will continue with discussion highlighting certain parts of OREA's standard form. In this article, I'll be talking about inspection rights, price adjustments, and the Ontario Family Law Act.

Inspection Rights
The standard clause (section 13) of OREA's Agreement of Purchase and Sale says that the Buyer has had the opportunity to inspect the property and understands that they will "not be obtaining a property inspection" unless otherwise specified in the agreement. This is where a good Realtor will include a provision in the additional terms and conditions requiring a home inspection be done and a report provided to the satisfaction of the buyer. Here's a typical clause that I've come across:

"This offer is conditional upon the inspection of the subject property by a home inspector at the Buyer's own expense and the obtaining of a report satisfactory to the Buyer in the Buyer's sole and absolute discretion. Unless the Buyer gives notice in writing delivered to the Seller within 5 (five) banking days after acceptance that this condition is fulfilled, this offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to cooperate in providing access to the property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller within the time period stated herein."

Price Adjustments
At the day of completion, there will be additional charges or refunds that need to be applied to the purchase price. These charges and refunds include: realty taxes, private and public utility charges, rents, mortgage interests, local improvement rates, unmetered cost of fuel, etc. The buyer is only supposed to assume responsibility for these types of things after closing (i.e. completion of the sale). If the seller, for example, paid realty taxes in advance, then they would be entitled to a credit in the purchase price.

Ontario Family Law Act
Situations may arise when the vendor has a spouse (e.g. common law or married) that has an interest in the property. To be clear, a provision was included in OREA's standard form Agreement of Purchase and Sale to warrant that no spouse - other than spouses who execute the Agreement of Purchase - have an interest or claim to the property.

Disclaimer:
Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to drafting, reviewing, interpreting or resolving disputes concerning partnership and limited partnership agreements, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Mississauga, Brampton, and other Ontario business lawyers registered on the website who can answer your questions or help you with your partnership and limited partnership agreements. I should know - I'm one of them and you can contact me directly.

ABOUT THE AUTHOR: Michael Carabash, B.A., LL.B., M.B.A.
Dynamic Lawyers Ltd. was founded by Michael Carabash, a Toronto business lawyer with Carabash Law. Virtually everyone has a wide range of legal issues they need help with - such as writing a will, fighting a traffic ticket, buying or selling real estate, writing a contract for services, reviewing a lease agreement, having documents notarized or commissioned, dealing with a motor vehicle accident, etc. Michael wanted ordinary people in need of common legal services to be able to conveniently and cost-effectively get answers and quotes from local lawyers. At the same time, he also wanted lawyers to be able to market their services directly and effectively to the public.