Alberta Standard Residential Purchase Contract: What It Covers

Signing a residential purchase contract is one of the biggest commitments most people make. The paperwork can feel routine because a standard form is used, but each section creates real obligations for both buyer and seller.

This article walks through what the standard contract generally covers, how the deposit is handled, and what to check before you sign. The exact wording of any clause is in your own contract, so read it closely and ask questions.

This article covers the law of Alberta.

Why a standard form is used

A standard contract is used for residential purchases in Alberta. It sets out the buyer, the seller, the property details and the financing terms, including the deposit amount.

A standard form does not mean every deal is the same. Prices, dates, conditions and any extra terms are filled in or added for your transaction, and those are the parts that decide what you are committing to.

The main parts of the contract

Read every blank and every added clause. If something you were told verbally is not written in the contract, it may not be part of your deal.

The deposit and how it is held

A licensee must keep trust money separate from the licensee's own money. The money must go into an interest-bearing trust account designated as a trust account. Money received in trust must be deposited within 3 business days of receipt, and for money received with an offer to purchase, the 3 business days run from acceptance of the offer.

A brokerage cannot simply release your deposit to one side. Trust money may be paid out only in accordance with the Rules and the terms of the trust, and those terms must be in writing and agreed to by the licensee and all other parties. Interest earned on a deposit in a brokerage's trust account is paid to the Alberta Real Estate Foundation, so the buyer and seller do not receive it.

If an expected deposit is not received or a deposit cheque is not honoured, the brokerage must notify all parties in writing.

Conditions and special situations

Conditions are where many disputes start, because they have dates and wording that must be followed. How long your conditions run depends on your signed contract, so it is worth reading the dates and wording in it closely and confirming them with a lawyer.

• Condominium purchases: on written request, the condominium corporation must within 10 days provide an estoppel certificate covering contributions payable, payment frequency, arrears and interest owing. The certificate is conclusive proof of what it certifies, as of its date, in favour of the person who requested it. Time your condition so the 10 days fit inside it.
• Condo insurance: ask for the current insurance certificate, because owners must be given written notice and a copy within 30 days of the corporation receiving a certificate when certain insurance matters change.
• New homes from a builder: a buyer who paid a deposit to the builder may register a caveat on the land title to protect it.
• New condominium units from a developer: the developer must hold your money in trust until title is issued.

What to do before you sign

• Read the whole contract, including any added clauses and dates.
• Confirm the deposit amount and who holds it.
• Check each condition: what it covers, its deadline and how it ends.
• For a condo, request the estoppel certificate and condo documents early.
• Have a lawyer review the agreement before signing.

If a dispute does arise, the Limitations Act generally requires a claim such as breach of a purchase contract or return of a deposit to be brought within 2 years after the claimant first knew, or ought to have known, of it, or 10 years after the claim arose, whichever expires first. A lawyer can confirm how that applies to your facts.

Frequently asked questions