What is an Agreement of Purchase and Sale and what are the most important clauses?

The Agreement of Purchase and Sale (APS) is the legally binding contract that governs an Ontario real estate transaction. Once signed by both parties and all conditions are satisfied or waived, it is the document that controls closing, the state of the property to be delivered, and what happens if either party fails to perform.

Key clauses to understand include: the purchase price and deposit amount, the closing date, the list of included and excluded items (fixtures and chattels), conditions (financing, inspection, status certificate for condos), representations and warranties about the property's condition, the irrevocability period, and any schedules addressing specific matters like repairs, rent-back arrangements, or chattels.

The APS used in Ontario residential transactions is most commonly based on OREA (Ontario Real Estate Association) standard forms, but these are templates that agents and lawyers can and should modify for your specific situation using schedules. Never sign an APS without reading every clause and asking your real estate agent or lawyer to explain anything unclear. Once the deal firms up, the APS binds you completely, and changes require the other party's written consent.