Understanding the Property Acquisition Process in Ontario

A residential purchase in Ontario follows a well-established sequence. Understanding it helps buyers and sellers avoid the misunderstandings that most often cause delay or dispute.

The agreement of purchase and sale

Most residential transactions are documented in a written Agreement of Purchase and Sale. It sets out the price, deposit, closing date, included chattels and fixtures, and any conditions. Once signed by both parties and any conditions are satisfied or waived, the agreement is binding. Both parties should obtain legal advice before signing, not after.

Conditions and due diligence

Common conditions include financing, a satisfactory home inspection, review of a condominium status certificate, and a lawyer's review of title. Conditions protect the buyer, but they also create uncertainty for the seller, so their number and duration are usually a matter of negotiation.

• A home inspection identifies visible condition issues; it is not a guarantee.
• For condominiums, the status certificate discloses the corporation's finances, reserve fund and any special assessments.
• Where a property is tenanted, the tenancies continue after closing and should be reviewed carefully.

Deposits

The buyer usually pays a deposit shortly after acceptance. Where a brokerage is involved, deposits are typically held in its trust account. The deposit is credited to the buyer on closing.

Closing

On closing, each party's lawyer completes the transfer: title is searched, adjustments for property tax and utilities are calculated, land transfer tax is paid, and the transfer is registered electronically. Keys are released once registration is complete.

Where care is needed

Most problems in a purchase come from assumptions: that an additional unit is legal, that measurements are exact, or that a tenant will leave. Each should be verified rather than assumed.