Toronto Real Estate Lawyers (Part 11): Agreement Of Purchase And Sale Canada

As a follow up to my previous article about Agreements of Purchase and Sale (for residential properties - also see http://dynamiclawyers.com/DL_blog/toronto-real-estate-lawyers-part-10-agreement-of-purchase-and-sale/14/) – which dealt with the Information Section, Price, Deposit, Irrevocability Clause, and Completion Clause – I will continue with discussion highlighting certain parts of OREA’s standard form. In this article, I’ll be talking about chattels and fixtures, rental items, and title search.

Chattels (included) and Fixtures (excluded):
Whether a household item (e.g. stove, furnace, kitchen appliances, light fixtures, furniture, cabinets, etc.) is a chattel or a fixture will depend on their degree of attachment to the real property. Those items that are less attached and more easily movable are chattels (e.g. refrigerator, stove, gardening equipment, etc.), while those that are more permanently attached are fixtures (e.g. hot water heaters, cabinets, lighting, air conditioning unit, etc.). In the Agreement of Purchase and Sale, the parties will generally list all of the chattels to be included in the purchase and exclude the fixtures (because these may not be so obvious). For example, if a chandelier in the dining room or a mirror in the hallway are to be excluded as fixtures, then the Agreement of Purchase and Sale should say so!

Rental Items:
This clause specifies what items are being rented by the owners in respect of the property. The buyer may agree to assume the rental contracts (if assignable). Classic examples of rental items include: hot water tanks and furnaces. If the owner was renting a security/monitoring system, that could be included as well. The price for the rental items is not included in the purchase price.

Title Search:
The point of the title search is to allow the purchaser’s real estate lawyer to have time to examine the title (at the Buyer’s expense). They are looking for liens, municipal work orders, encumbrances, mortgages, present use of the property (e.g. multi-residential property), and that the property can be insured against fire, etc. They’re also checking to make sure who are the parties registered on title (i.e. the purported owners of the property). Finally, they’re checking to see the history of the property. It’s typical to see that the title search is conducted a number of days prior to closing so that, if an issue arises concerning title, there will be time to address that issue and/or extend the closing date (through mutual agreement).

Disclaimer:
Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to drafting, reviewing, interpreting or resolving disputes concerning partnership and limited partnership agreements, you should seek professional assistance (e.g. make a post on Dynamic Lawyers - http://www.DynamicLawyers.com). We have Toronto, Ottawa, Hamilton, Mississauga, Brampton, and other Ontario business lawyers registered on the website who can answer your questions or help you with your partnership and limited partnership agreements. I should know – I’m one of them and you can contact me directly.

ABOUT THE AUTHOR: Michael Carabash, B.A., LL.B., M.B.A.
Dynamic Lawyers Ltd. was founded by Michael Carabash, a Toronto business lawyer with Carabash Law. Virtually everyone has a wide range of legal issues they need help with - such as writing a will, fighting a traffic ticket, buying or selling real estate, writing a contract for services, reviewing a lease agreement, having documents notarized or commissioned, dealing with a motor vehicle accident, etc. Michael wanted ordinary people in need of common legal services to be able to conveniently and cost-effectively get answers and quotes from local lawyers. At the same time, he also wanted lawyers to be able to market their services directly and effectively to the public.


Name: Michael Carabash
Email: peter@dynamiclawyers.com