The Agreement of Purchase and Sale (APS) is the legal contract that controls every residential real estate transaction in Ontario. It sets the price, the deposit, the closing date, the conditions, what is included with the property, and what happens if either side fails to perform. Once both parties sign and the offer is accepted within the irrevocable period, the APS becomes legally binding.
In Ontario, most APS documents use the Ontario Real Estate Association (OREA) Form 100 for freehold resale homes, Form 101 for condominium resale, and Form 500 for commercial property. Section 4 of the Statute of Frauds requires every real estate agreement to be in writing and signed by the parties.
This guide walks you through what an APS contains, how each clause works under Ontario law, which conditions to negotiate, and the closing costs that catch buyers off guard.
What Is an Agreement of Purchase and Sale
An Agreement of Purchase and Sale is the written contract between a buyer and a seller for the transfer of land. It contains every term that governs the deal, including the purchase price, the deposit, the closing date, included items, excluded items, conditions, the requisition date for title, and the remedies if either side defaults.
The APS becomes legally binding the moment both parties sign and the offer is accepted (delivered) within the irrevocable time. After that, backing out without a valid contractual right (a failed condition, for example) can cost the defaulting party their deposit plus damages for any shortfall on resale.
As Demet Altunbulakli, founding lawyer at Insight Law Professional Corporation, puts it, “Real estate transactions can turn stressful fast. A client signs an APS without understanding every clause, and by the time they figure it out, the deal is already firm.”
The Legal Framework in Ontario
Three pieces of legislation control how an APS works in Ontario.
Statute of Frauds. Section 4 of the Statute of Frauds requires any contract for the sale of land to be in writing and signed by the party to be charged. Verbal agreements are not enforceable, though courts will occasionally enforce them through the doctrine of part performance.
Trust in Real Estate Services Act, 2002. TRESA governs how real estate brokerages and salespeople operate in Ontario. It fully replaced the Real Estate and Business Brokers Act (REBBA) in December 2023 and introduced new disclosure rules, the concept of self represented parties, and updated representation agreement requirements.
Vendors and Purchasers Act. Section 4 of this Act sets a default 30 day requisition period (the buyer’s lawyer’s time to examine title) where the APS is silent on the issue.
For condominium purchases, the Condominium Act, 1998 adds two important rules. Section 76 governs the status certificate (the corporation must deliver it within 10 days, and the fee is capped at $100 including HST). Section 73 gives buyers of new (pre construction) condos a 10 day statutory rescission period after they receive the disclosure statement and the fully executed APS.
For new freehold homes, the Homeowner Protection Act, 2024 introduced a 10 day cooling off period, but those provisions are not yet in force and await proclamation. Resale homes have no statutory cooling off period.
Standard Clauses in an OREA APS
The OREA Form 100 contains 26 standard clauses. Here are the ones that matter most.
Identification of Parties
The full legal names of every buyer and seller on title. Mistakes here, such as missing a spouse’s name, can cause real problems when title is registered. Corporations must use their exact legal name as registered.
Property Description
The municipal address plus the legal description from the parcel register. The legal description is what actually transfers, so a wrong address or missing legal description can void the deal.
Purchase Price and Deposit
The purchase price is what the buyer pays. The deposit is the buyer’s good faith money, typically 2 to 5 percent of the purchase price, held in trust by the listing brokerage. The deposit applies against the purchase price on closing and is returned if a condition fails. If the buyer defaults on a firm deal, the deposit is usually forfeited.
Irrevocability
The period during which the offer remains open for acceptance. Once the irrevocable time passes without acceptance, the offer is dead and cannot be accepted. The irrevocable time is often shortened in competitive markets to put pressure on the seller, but a short irrevocable time also limits how long the buyer is locked in.
Completion Date (Closing Date)
The date when title transfers, money changes hands, and the buyer gets possession. Avoid month end and year end dates. The Land Registry Office closes at 5:00 p.m. and Friday closings leave no buffer if anything goes sideways.
Chattels Included
Chattels are movable items (the fridge, stove, washer, dryer, window coverings, electric garage door opener). They are not part of the land. The APS must list every chattel that comes with the property. If the seller wants to keep the chandelier in the dining room, the APS must say so.
Fixtures Excluded
Fixtures are items attached to the property (chandeliers, built in shelving, mounted TVs, hot water tank). By default, fixtures are included in the sale. If the seller wants to keep a fixture, it must be listed in the Fixtures Excluded clause. The line between a chattel and a fixture is what causes most closing day arguments.
Rental Items
Items that look like they belong to the property but are rented (hot water tank, furnace, water softener, solar panels). The APS must identify all rental items so the buyer knows what contracts to assume.
Requisition Date
The deadline by which the buyer’s lawyer must examine title and raise any objections. A typical requisition date is 15 to 30 days before closing. If a defect cannot be resolved by the seller in time, the buyer can terminate.
Adjustments
Pro rated allocations at closing for property taxes, utilities, condo fees, fuel, and rents. The statement of adjustments sums up what each party owes the other on closing day.
HST
For resale residential homes, HST is generally not charged on the purchase price (because the seller is not in the business of selling housing). For new construction, HST applies, but a rebate of up to $24,000 may be available through the Ontario new housing rebate. Always confirm HST treatment before signing.
Conditions
Conditions are requirements that must be satisfied or waived before the deal becomes firm. They go in Schedule A. The most common ones are financing, home inspection, status certificate review (for condos), and sale of the buyer’s existing property. See our full guide to condition clauses in Ontario real estate for details.
Time Is of the Essence
This clause makes every deadline strictly enforceable. Miss the financing deadline, the requisition date, or the closing date by even a few hours, and you may have lost your rights.
Title and Future Use
The seller must deliver good and marketable title. The clause also entitles the buyer’s lawyer to check that the property can lawfully continue to be used for its current use and can be insured against fire.
Common Conditions in an APS
Conditions protect the buyer (and sometimes the seller) from being locked into a deal before key facts are confirmed.
Financing condition. Lets the buyer terminate if they cannot get an acceptable mortgage. Typically runs 5 to 10 business days. Insist on a Notice of Fulfillment (OREA Form 124) rather than a waiver, so you stay protected if financing collapses.
Home inspection condition. Lets the buyer hire a qualified home inspector and walk away if serious defects are found. Usually 5 to 7 business days.
Status certificate review condition. Required reading for any condo purchase. Lets the lawyer review the corporation’s financial and legal position before the deal firms up.
Sale of buyer’s property condition. Makes the new purchase conditional on selling the buyer’s current home within a set time. Sellers usually negotiate an escape clause so they can keep marketing.
Title and off title search condition. Lets the buyer’s lawyer complete a full title search and examination, confirm there are no liens, verify zoning permits the intended use, and check for outstanding work orders.
Insurance condition. Lets the buyer back out if property insurance cannot be obtained at a reasonable cost. Important for older homes, rural properties, and homes with oil tanks or unconventional heating systems.
If a condition is not fulfilled or waived by its deadline, the OREA standard wording renders the agreement null and void, and the deposit returns to the buyer in full without deduction.
Closing Costs and Land Transfer Tax
The purchase price is only part of what a buyer needs to bring to closing.
Ontario Land Transfer Tax (LTT). Payable to the Province at registration under the Land Transfer Tax Act.
Toronto Municipal Land Transfer Tax (MLTT). Only applies inside the City of Toronto.
Non Resident Speculation Tax (NRST). Currently 25 percent of the purchase price, payable by foreign nationals, foreign corporations, and taxable trustees on residential property purchases anywhere in Ontario. The NRST was raised from 20 percent to 25 percent in October 2022 and expanded province wide at the same time.
HST on new construction. New homes attract 13 percent HST. The Ontario new housing rebate can return up to $24,000 of the provincial portion. The federal First Time Home Buyer GST/HST Rebate, introduced in 2025, can eliminate the federal portion of HST on new homes up to $1 million for eligible first time buyers.
Legal fees and disbursements. Typical legal fees for a residential closing run between $1,500 and $2,500 plus disbursements (title insurance, software, registration fees, courier, and so on).
Property tax and utility adjustments. What you reimburse the seller for prepaid taxes and utilities, or what the seller credits you for arrears.
For more on what your real estate lawyer pulls together on closing day, see the statement of adjustments guide.
OREA Forms vs Custom Agreements
The OREA standard forms cover roughly 95 percent of Ontario residential transactions. They are battle tested, court interpreted, and familiar to every lawyer and lender in the province. The forms are licensed to OREA member real estate agents and brokerages, which is why most deals are written on them.
Custom agreements come into play for private sales (no agent), complex commercial transactions, bulk purchases, sales between corporations or trusts, transactions involving non standard terms, and deals where the OREA form does not fit. A custom agreement is drafted from scratch by a real estate lawyer and tailored to the specific deal.
Custom agreements take longer to negotiate and cost more in legal fees, but they avoid the trap of modifying a standard form in ways that contradict the pre printed wording.
Comparison of OREA APS Forms
| Form | Used For | Key Features |
| Form 100 | Freehold residential resale | Standard 26 clauses, used for detached, semi detached, townhouses, and most rural homes |
| Form 101 | Condominium resale | Includes condominium specific clauses, status certificate references, and common element rules |
| Form 500 | Commercial property | Different schedule structure, addresses HST, environmental, and assignment issues common in commercial deals |
| Form 502 | Commercial assignment of APS | Used when an existing APS is assigned to a new buyer before closing |
| Form 800 | New construction / builder | Often heavily modified by builder, requires careful lawyer review |
Mistakes That Cost Buyers and Sellers Money
Signing under pressure. Bidding war pressure tactics (“you have 30 minutes to decide”) cause buyers to skip conditions they should have insisted on. Once the deal is firm, going back is expensive.
Missing deadlines. “Time is of the essence” means deadlines are absolute. A financing deadline missed by one hour can void a condition or, worse, leave you firm on a deal you cannot fund.
Vague condition wording. “Satisfactory to the buyer” without objective criteria can be challenged as a free option to cancel and may not protect the buyer in court.
Forgetting to list inclusions. If you assumed the fridge comes with the house, but the seller did not list it as included, the seller can take it on closing. Disputes over chattels and fixtures are the most common closing day fights.
Skipping the status certificate condition on a condo. Hidden special assessments, underfunded reserve funds, and pending lawsuits can add tens of thousands to your costs after closing. The status certificate is your only window into the corporation’s true financial health.
Ignoring HST on new construction. Buyers sometimes assume the listed price includes HST when it does not. The result is a closing day surprise that adds tens of thousands to the actual cost.
Wrong closing date. A Friday closing or month end closing leaves no buffer if anything goes wrong with the Land Registry, the lender, or the seller’s discharge. Mid week and mid month closings are safer.
Frequently Asked Questions
Is an Agreement of Purchase and Sale legally binding in Ontario?
Yes. Once both parties sign and the offer is accepted within the irrevocable period, the APS is a legally binding contract. The Statute of Frauds requires it to be in writing and signed. Backing out after the deal is firm, without a valid contractual right, can cost the defaulting party the deposit plus damages for any shortfall on resale.
Can I cancel an Agreement of Purchase and Sale after signing?
For most resale homes in Ontario, there is no cooling off period. Once both parties have signed and the deal is firm (all conditions met or waived), the contract is binding. New condominium purchases have a 10 day statutory rescission period under section 73 of the Condominium Act, 1998. New freehold homes will have a 10 day cooling off period under the Homeowner Protection Act, 2024, but those provisions are not yet in force.
How much is the typical deposit on an Ontario home purchase?
The deposit usually runs 2 to 5 percent of the purchase price, though in competitive markets it can run higher. The deposit is held in trust by the listing brokerage and applied against the purchase price on closing. If a condition fails, the deposit returns to the buyer. If the buyer defaults on a firm deal, the deposit is typically forfeited to the seller.
What is the requisition date in an Ontario APS?
The requisition date is the deadline by which the buyer’s lawyer must complete the title search and raise any objections to title in writing. It is typically 15 to 30 days before closing. If the APS is silent, section 4 of the Vendors and Purchasers Act sets a default 30 day period from the date of the contract.
Who pays the land transfer tax in Ontario?
The buyer pays the land transfer tax in Ontario.
Do I need a real estate lawyer to close on a property in Ontario?
Yes. Only a licensed Ontario lawyer can register the transfer of land electronically through Teraview. Your lawyer reviews the APS, conducts the title search, prepares closing documents, requisitions title defects, handles the deposit and mortgage funds, and registers the transfer. Trying to close a real estate transaction without a lawyer is not legally possible in Ontario.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
