Key clauses, conditions, deposit rules, title insurance, and closing mechanics in Ontario residential real estate transactions.
The Agreement of Purchase and Sale (APS) is the binding contract governing Ontario real estate transactions. Most residential transactions use the OREA standard form, but the form is only the starting point — conditions, schedules, and amendments drive the real legal risk. This guide covers what Ontario real estate lawyers review and negotiate in every file.
Sets the agreed price. Deposit (typically 5% of purchase price) is paid on acceptance and held in trust by seller's brokerage.
Lawyer's note: Confirm deposit amount, trustee, and whether any portion is due on removal of conditions vs on acceptance.
The date title transfers and funds are exchanged — the "closing date."
Lawyer's note: Build in realistic time for title search, mortgage registration, and requisition period (usually at least 5 business days before closing).
Time by which the offer must be accepted, refused, or countered.
Lawyer's note: Sellers receiving multiple offers may let all irrevocability periods expire simultaneously and counter selectively.
Seller warrants the property is free of encumbrances except those listed, and buyer must accept title subject to existing easements, restrictive covenants, and utility rights-of-way.
Lawyer's note: Title search must be done before closing. Identify all registered encumbrances early — some are non-insurable.
Buyer has X days to obtain satisfactory mortgage financing; if unsuccessful, deal is void and deposit returned.
Lawyer's note: Buyers should not waive a financing condition unless fully pre-approved. Condition should specify amount, rate, and term to avoid disputes over what is 'satisfactory.'
Buyer may have the property inspected; if not satisfied, deal is void.
Lawyer's note: Sellers in a hot market often resist or limit inspection conditions. Buyers who waive assume all physical risk.
10-day period for buyer's lawyer to review the status certificate and related condo documents.
Lawyer's note: Review reserve fund adequacy, pending special assessments, litigation exposure, and any rules affecting the buyer's intended use.
Specifies included chattels (personal property: appliances, window coverings) and excluded fixtures (attached items seller is taking).
Lawyer's note: This clause causes many post-closing disputes. Be specific. 'Light fixtures' alone is insufficient — list every item.
Declares whether the purchase price includes or excludes HST (most residential resales are HST-exempt; new builds and some assignments are taxable).
Lawyer's note: New construction agreements often state 'plus applicable HST.' Buyer must confirm new home rebate eligibility and structure.
Property taxes, utilities, and fuel costs are adjusted as of the closing date so each party pays for their period of ownership.
Lawyer's note: Prepare an adjustment statement early. Interim tax bills and estimated final bills must be reconciled. Condo fees are also adjusted.
Party that wants to close must be ready, willing, and able to close (tender) at the agreed time and place.
Lawyer's note: Failure to tender may constitute repudiation. In Ontario, electronic closing means most tender is by lawyer undertaking and Teraview registration.
Seller confirms no urea formaldehyde foam insulation and no designated substances (if applicable).
Lawyer's note: Environmental due diligence may also require Phase I ESA for commercial properties or former industrial sites.
Conditions make an offer conditional — the deal only becomes firm when all conditions are waived or satisfied. Buyers and sellers negotiate both whether conditions are included and the time period allowed.
| Condition | Typical Period | Risk if Waived Without Satisfaction |
|---|---|---|
| Financing | 5 business days | Buyer assumes mortgage risk if waived without firm commitment |
| Home Inspection | 5-7 business days | Hidden defects become buyer's problem if waived |
| Status Certificate (Condo) | 10 calendar days (statutory) | Special assessments, litigation, or reserve fund shortfalls may be fatal |
| Sale of Buyer's Property | Negotiated — often 30-60 days | Seller may accept a better offer if escape clause triggered |
| Insurance | 3-5 business days | Some properties are uninsurable (knob-and-tube, oil tanks, flat roofs) |
| Solicitor Review | 2-5 business days | Rarely used in residential; more common in commercial or complex deals |
Ontario residential real estate closes electronically through Teraview (the Land Registry Office system). Lawyers exchange undertakings and register documents the morning of closing.
Ontario land transfer tax and, for Toronto properties, the Toronto municipal land transfer tax are both payable on closing. First-time buyers may qualify for an Ontario rebate (up to $4,000) and Toronto rebate (up to $4,475). Calculate both taxes for clients before closing so there are no surprises on the statement of adjustments.
If a condition (e.g., financing or inspection) is not waived or fulfilled by the deadline, the deal is void and the deposit is returned to the buyer. If the buyer breaches a firm agreement (no conditions), the seller can sue for damages and may retain the deposit as partial compensation. Deposit disputes often end up before the Real Estate Council of Ontario or in Small Claims Court.
A status certificate (s. 76 Condominium Act) is a document package provided by the condo corporation disclosing the unit owner's common expense arrears, the corporation's financial statements, reserve fund study, budget, management agreement, current rules, and any pending special assessments or litigation. Buyers typically have 10 days to review the status certificate, and their lawyer's review is critical to identifying financial or governance issues.
Title insurance is not legally mandatory in Ontario but is standard practice and required by virtually all mortgage lenders. A lender policy protects the lender's mortgage; an owner policy protects the buyer's ownership interest. Title insurance covers risks such as survey discrepancies, zoning non-compliance, work orders, and fraud — and often replaces the need for a new survey.
On closing day, the buyer's lawyer receives mortgage funds from the lender, collects the balance of purchase price from the client, pays the seller's lawyer by wire transfer, registers the transfer and charge on title electronically (Teraview), and reports to the client. The seller's lawyer receives funds, pays out the existing mortgage and other encumbrances, and releases the balance to the seller. Most closings are paperless and handled through lawyer-to-lawyer undertakings.
Track closing dates, title search deadlines, and trust accounting — built for Ontario real estate lawyers.
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