Purchasing a home in Ontario comes with many critical considerations and decisions. When prospective purchasers or sellers decide to proceed with a real estate transaction, they must sign an agreement. However, it is vital for parties to understand what the real estate contract states regarding the terms of the agreement and what the consequences are if a party does not follow through on their responsibilities under the contract. With proper preparation and help from a skilled realtor and real estate lawyer early on in the process, you can ensure that the transaction goes as smoothly as possible.

This blog post will focus on explaining the core elements of a real estate contract in Ontario to help buyers and sellers understand what a standard real estate contract looks like and how the terms of these agreements impact their rights.

What is a Standard Contract in Ontario Real Estate?

Realtors will use Ontario Real Estate Association (OREA) Form 100 (Agreement of Purchase and Sale) for most real estate purchases in Ontario. This is a standard contract that is prepared by the buyer and presented to the seller as an offer to purchase the property in question.

The terms of the Agreement of Purchase and Sale may change through negotiation. However, the topics covered in the contract rarely vary.

Standard Clauses in Ontario Real Estate Contracts

The information below outlines some of the relevant clauses in an Ontario real estate contract and provides context for the key clauses that may interest an average buyer. Real estate contracts can vary based on the unique circumstances of the transaction and may differ from the terms set out below. If you have questions regarding an Agreement of Purchase and Sale or how a standard clause applies to your unique circumstances, it is important to obtain the advice of an experienced real estate lawyer.

Introductory Information

On every Ontario real estate contract, there are several pieces of essential information, including:

  • the date the offer was made;
  • the name (or names) of the buyer(s) and seller(s); and
  • the address and legal description of the property that is the subject of the offer.

The Deposit

Typically, when a seller accepts an offer to purchase their property, the buyer provides the seller with a non-refundable deposit as a sign of commitment and good faith. While many buyers provide 5% of the property’s purchase price for the deposit, this number can vary based on buyer or seller preferences.

The Agreement of Purchase and Sale will include a clause outlining the deposit amount, the method of payment, and who will receive it. In many cases, the seller’s lawyer receives the deposit, which is held in trust until the transaction closes. The Agreement of Purchase and Sale will also outline how soon the buyer will pay the deposit once the seller accepts their offer. Generally, the buyer must transfer the deposit within 24 hours.


Irrevocability refers to the circumstances under which the buyer can revoke their offer.

The Agreement of Purchase and Sale will include a clause outlining how long the seller has to consider and accept the buyer’s offer. During that time, the buyer cannot withdraw their offer. However, if the clause states that the offer is irrevocable until a specified date and the seller does not accept the offer by that date, the deposit will be returned to the buyer, and the offer will be null and void.

The Completion Date

The “completion date” is the date that the property will be legally transferred from the seller to the buyer.

The Agreement of Purchase and Sale will include a clause stating the date that the transaction will be completed and the buyer can take ownership of the property.

Fixtures and Chattels

At their most basic nature, “fixtures” and “chattels” are immovable and movable items relating to the property. For example, fixtures are items that are “fixed” to the property, like fences, while chattels are items that can be moved, like a fridge or a washing machine.

The Agreement of Purchase and Sale will include clauses addressing how specific fixtures and chattels will be dealt with. In other words, it will specify whether any items will stay with the property when the buyer takes ownership or whether the seller will remove them from the property. This section includes a clause for “Chattels Included” and “Fixtures Excluded.”

Dealing with fixtures and chattels can become complicated, especially when the parties are not clear about what will stay on the property after the sale closes. When in doubt, it is best to outline how these items will be treated in the contract to ensure there are no unpleasant surprises or disputes relating to them after the property is transferred.

Rental Items

“Rental items” refers to items on the property that are rented and not included in the purchase price. For example, a seller may lease a hot water heater at the property.

If applicable, the Agreement of Purchase and Sale will identify items or equipment that are not included in the purchase price and how they will be dealt with. For instance, the buyer may agree to assume the rental contract for the hot water heater, or it may be returned to the rental company.

Harmonized Sales Tax (HST)

In some cases, such as when a buyer purchases a new build home, a property purchase may be subject to HST.

The Agreement of Purchase and Sale will typically outline whether HST is payable, along with the amount of tax payable. If HST is payable, the amount of tax owing will be added to the Purchase Price, and if HST is not payable, the seller will typically certify that it is not payable on or before the completion date.

Contact Campbells LLP for Comprehensive Guidance on Buying and Selling Residential and Commercial Real Estate

Buying a new home can feel overwhelming, but with the right legal representation, it doesn’t have to be. At Campbells LLP, we guide buyers and sellers through every step of their residential real estate transaction. Our team will help you understand your options, walk you through relevant real estate contracts and documentation, negotiate terms on your behalf, and protect your interests if a dispute arises between the parties. To learn more about how we can help you with your next sale or purchase, contact us online or call (905) 828-2247.