How is a commercial agreement of purchase and sale different from a residential one in Ontario?

A residential agreement of purchase and sale is usually a short, standardized form with a handful of negotiated conditions, such as financing, a home inspection, and sometimes the sale of the buyer's current home. A commercial APS is typically longer and custom-drafted for the specific deal, because commercial properties carry more variables: existing tenant leases that need to be reviewed and often assumed, environmental conditions and site history, zoning and permitted use, and how HST applies to the transaction.

Commercial agreements also tend to include more extensive representations and warranties from the seller, about title, the accuracy of the rent roll and leases, environmental compliance, and the absence of undisclosed litigation or work orders, along with conditions letting the buyer review tenant estoppel certificates, service contracts, and financial statements before being firmly bound. Price allocation between land, building, and, where relevant, goodwill is another feature specific to commercial deals, tied to tax treatment.

Because there's no standard commercial form the way there is for residential resale, a lawyer typically drafts or heavily customizes the agreement, and buyers should expect a longer, more heavily negotiated document than a residential purchase.