Information Every buyer Should Know

      The Agreement of Purchase And Sale

In the majority of cases your lawyer, (the lawyers), does not see the actual Agreement of Purchase and Sale until it has been executed. If you have already signed the Agreement, your lawyer would like to see it as soon as possible.

These contracts are supplied by your Realtor and are contained in standard form. However, if you prefer, you should make an appointment with your lawyer to discuss the clauses in the Agreement of Purchase and Sale. Further, your lawyer would be happy to explain the role of the Realtor with regard to disclosure, authority, payment of commission, and the potential, if any, of a conflict of interest. The best way for you, the buyer, to avoid problems is to understand your agreement.

If your agreement is subject to and conditional upon you successfully arranging a mortgage by a specific date, then it is imperative that you obtain in writing by that date an unconditional approval from the financial institution. It is your responsibility to monitor the financing dates contained in your agreement. If you do not obtain in writing an unconditional approval by the specified date, then the seller or the listing real estate agent must be notified in writing that financing has not been arranged, and an agreement in writing may be signed to extend the financing deadline, or the agreement may be terminated. If you do not notify the seller of your inability to obtain mortgage financing by the specified date, you may lose your deposit and be subject to an action for damages by the seller, if you are unable to complete the transaction.

Your lawyer would recommend to all buyers, even those buying new homes, that they have the house they are buying inspected by a qualified building inspector and that they have the particulars of the inspection stipulated in the agreement. The inspector will help to confirm that your house was built pursuant to federal, provincial, and municipal regulations and building codes, and that all the mechanisms in the house are in good working order. Further, your lawyer would recommend that this inspection cover the potential existence of any hazardous materials such as UFFI, asbestos, or radon. It is always wise to have these inspections completed in addition to any warranties that may be provided by the seller.

Your lawyer would recommend to all buyers who are buying a property that is not connected to municipal services that they stipulate in the Agreement that the quality of the water, the well, and the disposal field are to be inspected and tested prior to closing. These tests and inspections should completed be in addition to any warranties that may be provided by the seller.

Your lawyer would recommend to all buyers that they confirm with the municipality that the property they are buying is not in violation of any municipal by-law or regulation. This confirmation should be obtained in addition to any warranties that may be provided by the seller.

It is very important that your agreement address the HST. Your agreement should expressly state whether the HST is included in the purchase price or not, and if not applicable, the seller shall provide the buyer with a written certificate in a form satisfactory to the buyer's lawyer, confirming that the transaction is exempt from the HST. Most used residential property transactions are exempt from HST but the property you are buying may not be, and that's why it is important to have the HST addressed in your agreement.

If the time of the closing and the time of vacant possession are important to you, then you should make sure that these times are stipulated in your agreement. Please advise your lawyer of your logistical plans for the closing at your earliest convenience so that they can make the necessary arrangements on your behalf with the seller's lawyer. Remember, "time is of the essence" and your agreement may contain other conditional clauses with specific deadlines which may permit the seller to terminate the Agreement if not met.

It is your responsibility to monitor the dates contained in the Agreement. You may be liable for damages if any of the conditions of the contract are not carried out within the proper time periods or the transaction is not closed at the proper time or place.

It is in your best interest to inspect the property before the closing to ensure it is in the same condition that it was when you signed the Agreement of Purchase and Sale. The Property should be vacant when you inspect it and it is wise to do the inspection as close to the time that the money changes hands as possible.

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