Things to Know About the Agreement of Purchase and Sale

Typically, there are three stages in real estate transactions involving real property purchases and sales. First stage involves negotiating, drafting, and signing the agreement of purchase and sales. During the second stage due diligence is conducted which typically involves a title search and finally the closing.

Agreement of purchase and sale is essentially a contract between parties to which contract law applies and parties to the agreement have the obligations and responsibilities under the law. In the province of Ontario every real estate board has implemented the Ontario Real Estate Association (OREA) form of agreement.

This form is used for residential real estate transactions, and it addresses the issues that arise in most real estate transactions. However, if there are additional issues that need to be addressed, more clauses can be added to this form to accommodate such need. This can be accomplished with the assistance of a real estate lawyer in Mississauga.

Natural persons entering into an agreement of purchase and sale contract must be at least 18 years of age, not be undischarged bankrupt and not be incapable. There is need for extra caution if one of the parties decides to use a power of attorney to sign the agreement as there is possibility of fraud.

Furthermore, there are several issues that are unique to the seller and the buyer. Where there are two buyers purchasing the property together, they will have to decide whether they want to register the ownership as joint tenants or tenants in common.

In a joint tenancy if one of the buyers should die, the survivor becomes the sole owner by right of survivorship. In a tenancy in common each party owns a percentage of the registered title. If a party who owns a share in property as a tenant in common dies that parties share of property goes to his or her estate.

Married couples often use joint tenancy whereas business partners buying investment property are most likely to use tenancy in common. Contact a real estate lawyer in Mississauga to determine what is the right choice of ownership registration for you.

Agreement of purchase and sale accurately identifies and describes the property. Complete legal description of property is contained in almost every well drafted agreement. Legal description at least includes lot and plan, or plan or concession numbers.

The dimensions of the property must also be determined and included in the agreement by the drafter. Other things included in the agreement of purchase and sale are the price, the deposit amount and all the important dates. Contact a real estate lawyer in Mississauga if you need assistance with reviewing your agreement of purchase and sale.