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.
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