Key Clauses in an Ontario Agreement of Purchase and Sale Explained

Signing an Agreement of Purchase and Sale (APS) is one of the biggest commitments most people will ever make. Yet most buyers receive a multi-page document, are given a few minutes to review it, and sign under pressure. The agreement of purchase and sale Ontario clauses that trip buyers up most are not buried in legalese — they are often right on the standard form, written plainly but meaning something different than you expect.

This guide walks through the clauses that generate the most confusion, explains what they actually commit you to, and flags why getting a lawyer to review the agreement before you go firm matters more than most buyers realize.

What Is an Agreement of Purchase and Sale?

The APS is the binding contract between buyer and seller for a residential property transaction in Ontario. Most transactions use the Ontario Real Estate Association (OREA) standard form as a starting point, with custom terms added in Schedule A. Once all conditions are met and the agreement goes "firm," both parties are legally bound to complete the transaction.

Chattels vs. Fixtures: What Comes With the House?

Chattels are moveable items — a freestanding fridge, a washer and dryer, patio furniture. Fixtures are items attached to the property — built-in shelving, light fixtures, the furnace. The general rule in Ontario law is that fixtures are included in the sale unless specifically excluded; chattels are excluded unless specifically included.

This distinction causes real disputes. A seller takes the dining room chandelier because they say it was their grandmother's — but it was bolted to the ceiling, making it a fixture. Or a buyer assumes the garage shelving unit is included because it felt built-in, while the seller considers it moveable.

What to do: Read the inclusions and exclusions lists in the APS carefully. If something matters to you — a smart home hub, a garage lift, window coverings, a hot tub — make sure it is written into the agreement by name. Do not rely on verbal assurances.

Completion Date vs. Closing Date

In Ontario, these two terms mean the same thing: the date legal title transfers from seller to buyer and you receive your keys. The APS will state a specific date. Both parties' lawyers work toward funding and registering the transfer on that day.

Where buyers get confused is the assumption that the completion date is flexible. It is not, absent a written amendment both parties sign. Missing closing — even by one day — can expose you to damages, including the seller's carrying costs and the right to terminate the agreement. Build in a realistic timeline when you negotiate the date, and talk to your lawyer early if you foresee any challenge meeting it.

The Adjustments Clause

The adjustments clause (sometimes called the statement of adjustments) provides that costs like property taxes and utility charges are split between buyer and seller as of the completion date. The seller pays for the period they owned the property; the buyer takes on costs from the closing day forward.

Because Ontario property taxes are often billed in arrears, this commonly results in a credit to the buyer at closing — the seller owes you for the portion of the year they occupied the home. The exact numbers are calculated by the lawyers and appear on the statement of adjustments you review before closing. Surprises here are rare if your lawyer prepares you, but understanding that these credits and debits exist prevents confusion on closing day.

The Title Search Period and Requisition Deadline

After the agreement is signed, your lawyer is given a window — the title search period — to search the title to the property. This search confirms that the seller actually owns what they are selling and that no unexpected claims (liens, encumbrances, easements, or old mortgages) are registered against the property.

The requisition deadline is the date by which your lawyer must raise any title objections in writing. If your lawyer misses this deadline, the right to object to certain title defects can be lost. This is one of the most important reasons to hire a lawyer immediately after signing — not the week before closing. Your lawyer needs time to order title insurance, review survey documents, and raise issues with the seller's lawyer before the deadline passes.

The HST Clause

For resale homes in Ontario, the sale is generally exempt from HST. For new construction — including newly built condos and houses purchased from a builder — HST applies to the purchase price. Builders typically structure their pricing to include a rebate for owner-occupiers, but if you are buying as an investor and do not intend to use the property as your primary residence, you may not qualify for that rebate and could owe HST on closing.

The APS should clearly state whether HST is included in or in addition to the purchase price, and who bears the HST obligation. Read this clause carefully on any new build purchase. As of writing, this area of tax law has several nuances — verify the current treatment with your lawyer and accountant before signing.

The "As Is" Clause

An "as is" clause means you are accepting the property in its current condition, with no representations from the seller about its state of repair. While sellers on a standard OREA form make certain warranties, a prominent "as is" clause — often inserted for estate sales, power of sale transactions, or properties with known issues — can narrow or eliminate those warranties.

If you see "as is" language, a home inspection condition becomes especially important. Do not waive your inspection on an as-is purchase without understanding what you are taking on.

Schedule A: Custom Conditions

Schedule A is where agents and lawyers add conditions that are not on the standard form. Common Schedule A conditions include:

• Financing condition: the agreement is conditional on you securing mortgage financing within a set number of days. If you cannot, you can walk away and recover your deposit.
• Home inspection condition: allows you to have the property inspected and to void the agreement if results are unsatisfactory.
• Status certificate condition: on condo purchases, gives you time to review the corporation's financials, minutes, and reserve fund.
• Sale of existing property: makes your purchase conditional on selling your current home.

Conditions have hard deadlines. If you do not waive or satisfy a condition by its specified date, the agreement may be void or the other side may treat it as void. Track every condition deadline from the moment you sign.

Representations, Warranties, and Conditions

A representation is a statement of fact that induced you to enter the contract — for example, "the basement has never flooded." A warranty is a promise that something is true both now and at closing. A condition is a clause that suspends the agreement until a specified event occurs or is waived.

These three concepts are legally distinct. If a representation turns out to be false, you may have a remedy even after closing. If a condition is not met and neither party does anything about it, the agreement may die automatically. Understanding which category a clause falls into tells you what your options are if something goes wrong.

Read Before You Sign — Every Page

The OREA standard form is several pages long, and Schedule A can add several more. Buyers sometimes sign in a hurry at the offer stage and assume their lawyer will fix anything problematic later. Your lawyer cannot rewrite a firm agreement after signing — they can advise you on your rights and obligations, but the contract you signed is the contract you have.

Take the time to read the full document before you submit an offer. If anything is unclear, ask your agent or — better — call a lawyer before you sign, not after.

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