When purchasing a property of any kind, whether a residential house, condo, or pre-construction condo or townhouse, it’s best to have a real estate lawyer review the terms of the Agreement of Purchase and Sale.
What is an Agreement of Purchase and Sale (“APS”)?
The APS is a legal contract between a property’s purchaser and vendor/seller. The APS is required for all real estate transactions, including private sales, in Ontario. The APS provides essential information about the transaction. The APS provides the following information:
- the legal name of the purchaser and vendor;
- the legal description of the property and the property address;
- the closing date;
- the offer price and the deposit required;
- the title search and requisition date;
- the information and clarification about the Harmonized Sales Tax;
- the chattels and fixtures in the property;
- the rental items at the property;
- whether there are any new home warranties;
- and any other conditions associated with the transaction, such as:
- the buyer’s financing;
- the property inspection;
- any survey requirements;
- the property disclosure statement; and
- fire/property insurance, etc.
An experienced real estate lawyer is familiar with all these terms, and their review of the APS will ensure that a purchaser is made aware of the necessary information associated with the transaction.
Include a Real Estate Lawyer Early in the Purchase Process
Since a real estate transaction cannot be completed without a real estate lawyer, it’s best to include the lawyer earlier by having them review the APS and its terms and conditions so that they can accurately advise you, the client, and protect your interest from the onset.
Consequences for Not Having a Real Estate Lawyer Review an APS
There are consequences for not having a real estate lawyer review an APS. If a purchaser makes an offer to purchase a property and a vendor/seller accepts the offer, the parties must execute/sign the contract. Once the APS is executed, the APS becomes a legally binding contract that governs real estate transactions. Subsequently, if the purchaser changes their mind and seeks to back out of the transaction, the seller can seek legal recourse and sue the purchaser for breach of contract.
A real estate lawyer’s review of the APS can assist the purchaser by identifying all the conditions required for closing and confirming that the purchaser can meet all the requirements.
Review APS for Pre-construction Condos, Townhomes, and House Purchases
It’s highly recommended that a purchaser has a lawyer review the APS for pre-construction condos, townhomes, and houses. There are taxes, deposits, levies, assignment conditions, and consequences of a breach that must be identified and negotiated with the builder on a purchaser’s behalf, which is critical.
With newly built houses, the builders often offload development charges and levies to the purchasers. Therefore, a real estate lawyer can help a newly built purchaser understand the development charges, taxes, levies, and additional funds required to close and help the purchaser plan accordingly. If a purchaser of a newly built house is an investor, a real estate lawyer can help review the APS assignment condition and ensure that the property can be sold on assignment. A real estate lawyer will protect a purchaser’s rights before the APS is executed.
Real Estate Services at Addo Law P.C. If you are purchasing a property, please do not hesitate to contact Addo Law P.C. to assist you with your real estate transaction. Addo Law P.C. provides the following real estate transaction services:
- Residential Homes Purchases and Sales
- Condominium Purchases and Sales
- Pre-Construction Purchases and Sales
- Mortgage Financing & Re-Financing
If you have any further questions about real estate, please email Mark Addo at markaddo@addolawpc.ca or call Addo Law P.C. at 647-325-6947.
