Mary Davidson Real Estate, Wasaga Beach
- Real Estate Info > Working With A Realtor

Contract in Plain English

Offer Clauses in Plain English - OREA Agreement of Purchase and Sale:

Clauses 1,2,3

Listing Chattels to be included, Fixtures to be excluded, Rental Items.

Clause 4 - Irrevocability

This identifies how long the Purchaser is willing to keep the offer open for consideration by the Vendor.

Clause 5 - Completion Date

Also known as Closing Date; this is when you get your keys; it is usually also moving day.

Clause 6 - Notices

This clause is primarily to indicate who may receive written notices (counter offers, waivers, etc.) for the Vendor and for the Purchaser. If a FAX number is filled in here, the Vendor and Purchaser are giving permission for notices coming to that fax number to be deemed received by them personally.

Clause 7 - GST

This clause says that IF the sale is subject to GST, whether the Vendor will pay it (included in the Purchase Price), or whether the Purchaser would be responsible (in addition to the Purchase Price).

Clause 8 - Title Search

This tells how long the Purchaser's lawyer has to complete the title search of the property. The clause allows the lawyer 30 days beyond the requisition date to receive replies from municipalities and to determine that insurance is available for the property. (However, if this additional 30 days would extend beyond closing, he only has until 5 days before closing at the latest for this extended period.) In this clause, the Vendor gives permission for details of work orders to be given to the lawyer.

Clause 9 - Future Use

The Vendor and Purchaser here agree that they are not expecting any different use for the property than what is currently used for unless it is specifically spelled out in the white space clauses.

Clause 10 - Title

This clause makes the offer conditional upon the Vendor's title being valid and clear with certain exceptions: municipal agreements, restrictive covenants that run with the land, public utility/telephone/cable easements, easements for drainage or sewers. If a title problem is discovered within the time limits in Clause, the Purshaser's lawyer may object and the Vendor may remedy the problem. If the Vendor cannot or will not correct the problem, the Purchaser can either go ahead and accept the problem or he can end the agreement.

Clause 11 - Closing Arrangements

If the lawyers representing the parties close by electronic registration instead of the usual manual method at the registry office, the delivery of documents may be delayed and hence monies may not be transferred immediately but held in trust and real released later as per written agreement between the lawyers.

Clause 12 - Documents and Discharge

The Purchaser may request a copy of a survey, deed, or abstract from the Vendor and the Vendor must give it to him. But the Vendor is NOT obligated to produce a new survey or other document for the Purchaser. If the Vendor has an institutional mortgage which is to be paid off out of closing funds, that mortgage would still be on title at closing. This clause allows the Vendor's lawyer to provide a statement to the Purchaser that he will use the closing funds to pay off the mortgage and then register a discharge.

Clause 13 - Inspection

The Purchaser acknowledges here that he had the opportunity to inspect the property (whether he took the opportunity of not is up to him!) and understands that if the Vendor accepts this offer, he has a contract to buy the property.

Clause 14 - Insurance

The condition of the property is the Vendor's responsibility until closing. If substantial damage occurs, it is the Purchaser's choice whether to accept the proceeds of the insurance and close on the damaged property or to end the contract. No insurance will be transferred on closing. If there is a VTB, the Purchaser must provide evidence of insurance to the Vendor.

Clause 15 - Planning Act

The whole agreement can be void if the Planning Act was not complied with when the property was severed.

Clause 16 - Document Preparation

The Vendor will pay for the preparation of Deed/Transfer. The Purchaser will pay for the land transfer tax affidavit and the registration of a VTB mortgage.

Clause 17 - Residency

The Purchaser's lawyer will enquire to find out if any capital gains tax will be payable on the property. If so, this clause makes provision for him to withhold a sufficient amount to cover that tax.

Clause 18 - Adjustments

This clause tells which on-going expenses will be pro-rated on a daily basis and adjusted between Vendor and Purchaser to the closing date. These expenses normally include: rents, mortgage interest, taxes and local improvements, unmetered utility, fuel and water charges. The lawyer will calculate credits and debits on the Statement of Adjustment.

Clause 19 - Time Limits

The Vendor and Purchaser or their lawyers may mutually agree to alter any date in an accepted offer. Unless there is mutual agreement, however, the dates must be adhered to as set out in the offer.

Clause 20 - Tender

When the Vendor's lawyer produces keys, executed deeds to be registered and any other documents in order to provide good title and the Purchaser's lawyer produces cash/bank draft/certified cheque along with documentation, they are showing that they are ready to fulfill the contract. If one party tenders and the other does not, that latter party is in breach of the contract.

Clause 21 - Family Law Act

Here the Vendor warrants that non-owner spousal consent is not needed. It would be impossible to complete the contract if a spousal consent signature were required and not obtained.

Clause 22 - UFFI (Urea Formaldehyde Foam Insulation)

Here the Vendor warrants that he has not installed UFFI, and that,to the best of his knowledge there is none and never has been any. If the offer is on a multiple unit building, only the part being purchased is covered by this warranty. This warranty will still be in effect and will continue even after closing.

Clause 23 - Consumer Reports

This is to notify the Purchaser that a consumer credit and/or personal report may be conducted in reference to this transaction.

Clause 24 - Agency

This clause draws attention to the CONFIRMATION OF REPRESENTATION section of the offer where it is spelled out which broker is working for which party.

Clause 25 - Agreement in Writing

Typed portions in the offer supersede the fine print. Furthermore, the whole agreement is in writing and included on this contract. There are no additional or side agreements or promises which will affect this transaction. Finally, he/she/they shall all be used interchangeably in the contract and shall apply in context to the agreement.

Clause 26 - Successors and Assigns

Heirs, executors, administrators, successors and assigns of the parties would be bound by the provisions of this contract.

Dated, Signed, Sealed

The date should always be the true date that party placed his signature to the contract. Sealed means that a mark was placed on a document as assurance of the party's intent to carry out promises contained in the document. A party must be aware of the significance of signing under seal or it may have no legal significance.