Alberta Real Estate Association Residential Purchase Contract Explained

If you are buying or selling a home in Alberta, you will likely be handed a standard purchase contract and asked to sign it, often quickly. It is a long form with many boxes and clauses, and it is easy to nod along without knowing what you are agreeing to.

This article walks through what the standard contract covers, how the deposit is handled, what is open to negotiation and why your signature matters. It explains how things generally work. The exact wording of your own contract controls your deal.

This article covers the law of Alberta.

What the standard contract does

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

Think of it as the written record of the whole deal. Anything you and the other side have agreed to, such as price, possession date or a home inspection, should be in the document. A verbal promise that never makes it into the contract is hard to rely on later.

It is not unusual for a residential purchase contract to include a home inspection as a condition. Conditions are the parts that let a deal fall away, or change, if something is not satisfied by a set date.

The main parts to read closely

• The parties and the property: check that names and the legal description of the property are correct.
• The price and the deposit: the deposit amount is set out with the financing terms.
• Conditions: what must happen, by what date, and who can end or waive each one.
• Dates: acceptance, condition deadlines, possession and closing.
• What is included or excluded: appliances, fixtures and anything else you were told comes with the home.
• Schedules or added clauses: extra terms the parties have typed in or attached.

Read the dates twice. Many disputes come from a missed deadline rather than from a clause nobody understood.

How the deposit is handled

A deposit is usually held by the brokerage in 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, those 3 business days run from acceptance of the offer. Trust money must be kept separate from the licensee's own money and kept on deposit in Alberta.

The brokerage cannot simply release your deposit to one side on its own say-so. Trust money can 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. In practice that means the purchase contract or a written direction.

If an expected deposit is not received or a deposit cheque is not honoured, the brokerage must notify all parties in writing. Interest earned on a deposit in a brokerage trust account is paid to the Alberta Real Estate Foundation, so the buyer and seller do not receive it.

What is negotiable and what binds you

The form is standard, but the deal is not. Price, deposit amount, conditions, dates and included items are all terms that the buyer and seller agree on, and either side can propose changes before a contract is accepted. Which changes the other side will accept depends on the market and the people involved.

Once both sides sign, the contract is a legal agreement. A buyer who is unhappy after an inspection may withdraw the offer, adjust the price to cover repairs needed, or move forward, but only to the extent the contract's conditions allow it. Whether a deposit is returned or kept if a deal collapses depends on the signed wording and on court decisions, so ask a lawyer before assuming either result.

A claim over a purchase contract, such as for a breach or the return of a deposit, generally must be brought within 2 years after the claimant first knew, or ought to have known, of it, or within 10 years after the claim arose, whichever expires first. Other provisions may also affect a particular claim.

Be careful about waiving protections. Any waiver or release of the trust-account duties by the person a licensee acts for is void.

What to do before you sign

• Ask for the contract and every schedule ahead of time, not at the signing table.
• Have a lawyer review the agreement before you sign; buyers are allowed to do this.
• Confirm that you have signed a service agreement with your brokerage, which must acknowledge the trust arrangement and set out how money will be received, held and disbursed.
• Mark every date on a calendar and note who must act on each one.
• If you are buying a new home from a builder and pay a deposit to the builder, ask about registering a caveat on the land title to protect it.
• Keep copies of everything you sign and every written change.

Frequently asked questions