Agreement of Purchase and Sale in Ontario: What It Is and What to Check Before You Sign
What Is an Agreement of Purchase and Sale?
The APS starts as your offer and becomes the contract when the seller accepts it. It is the document your lawyer works from at closing. Many resale agreements in Ontario are written on a standard form published by the Ontario Real Estate Association, with extra terms added in schedules, and the wording differs from one edition of the form to the next, so your lawyer works from your actual document. New homes and commercial deals use different documents. A new home agreement from a builder, for example, includes the Tarion addendum. See our Tarion warranty guide.
The law requires the writing. Section 4 of the Statute of Frauds says no action can be brought on a contract for the sale of land unless the agreement, or a memorandum of it, is in writing and signed by the party to be charged or someone lawfully authorized by that party. See the Statute of Frauds on Ontario.ca.
What the Agreement Contains
The parties and the property
Price and deposit
Irrevocability
Conditions
What is included
Closing and title
The Deposit
A deposit gives the seller security and shows the buyer is serious. The agreement sets the amount and the timing. RECO, the regulator of real estate agents and brokerages, says that failing to deliver a deposit is a breach of the agreement, and the seller may cancel and sue. See the RECO article on deposits.
The brokerage holds the deposit in trust. Under the Trust in Real Estate Services Act, a brokerage must keep trust money in a designated trust account, separate from its own money, and pay it out only in accordance with the terms of the trust (section 27). RECO administers deposit insurance, and Ontario.ca says consumers may be covered up to $200,000 per claim. See the Act on Ontario.ca and Ontario.ca, what to know before buying a home.
Conditions: Your Way Out
- Financing: you receive mortgage approval on terms you can accept. Be specific about what you need.
- Home inspection: the inspection result is satisfactory to you.
- Status certificate review: for a resale condo, your lawyer reviews the certificate.
- Lawyer’s approval: your lawyer approves the agreement within a short period.
- Sale of your current home: you complete a sale first.
Give each condition enough time. A condominium corporation has 10 days to deliver a status certificate after it receives your request and payment, so a condition that expires sooner can run out before you see the document. Order it as soon as your offer is accepted. See our status certificate guide.
New condos work differently. A buyer can cancel within 10 days of receiving the fully signed agreement, the disclosure statement and Ontario’s Residential Condominium Buyers’ Guide, and a developer must hold a deposit in trust. For resale condos, Ontario.ca says no cooling-off rule exists in legislation. See our pre-construction condo service.
Offers, Bidding and What Agents Can Share
Real estate agents and brokerages are regulated by RECO under the Trust in Real Estate Services Act, which replaced the Real Estate and Business Brokers Act as of December 1, 2023. Agents must give prospective clients the RECO Information Guide and explain it. If a seller directs their brokerage in writing, the content of offers, without identifying the parties, must be shared with everyone making an offer. Ask your agent how your offer’s terms could be shared. See the RECO guidance on the Act.
What Happens If the Deal Fails
If a condition is not met, the deal ends on the terms of the agreement. If a buyer defaults after the deal is firm, the seller may keep the deposit and may claim damages. If a seller refuses to close, a buyer may be able to ask a court to order the sale to go ahead or to award damages. The outcome depends on the agreement and the facts. See our articles on a buyer backing out, a collapsed deal and specific performance.
From Agreement to Keys
Your lawyer reviews the agreement
Conditions are met or waived
Title, mortgage and insurance
Your lawyer searches title, reviews your lender’s instructions and arranges title insurance. See our title insurance guide.
Adjustments and closing funds
Your lawyer prepares the statement of adjustments, calculates land transfer tax and collects your closing funds. See our closing costs guide and land transfer tax guide.
Registration and possession
What a Lawyer Checks Before You Sign
- The legal description of the property, and the inclusions and exclusions.
- The deposit amount and when it is due.
- The wording and deadline of each condition.
- The completion and possession dates.
- The title the seller must deliver, and any matters you are asked to accept.
- Extra clauses the seller has added in a schedule.
- How property tax, utilities and rental items are adjusted.
- How you will hold title if you buy with someone else. See our article on joint tenancy vs tenants in common.
- Any rebates you plan to claim. See our first-time buyer guide.
How We Help
We draft and review agreements of purchase and sale for buyers and sellers, from first drafts to the closing. We serve clients in English, Hindi and Punjabi. Call (647) 696-8069 or book a free consultation below. See our agreement of purchase and sale service, our residential purchase service and our residential sale service. We provide our fee during your consultation.
Frequently Asked Questions
What is an agreement of purchase and sale in Ontario?
It is the written contract between a buyer and a seller of property. It sets the price, deposit, conditions, inclusions, closing date and what happens on default.
Does an agreement of purchase and sale have to be in writing?
Yes. Under section 4 of the Statute of Frauds, a contract for the sale of land can be enforced only if the agreement or a memorandum of it is in writing and signed by the party to be charged, or by someone lawfully authorized by that party.
Can I back out after the seller accepts my offer?
Not freely. You can end the deal only through a condition in the agreement, if it is not met. For a new condo you can cancel within 10 days of receiving the signed agreement, the disclosure statement and the Buyers’ Guide, and Ontario.ca says no cooling-off rule exists in legislation for resale condos.
Who holds the deposit?
The brokerage holds it in trust, in a designated trust account kept separate from its own money. RECO administers deposit insurance, and Ontario.ca says consumers may be covered up to $200,000 per claim.
What happens to the deposit if the buyer does not deliver it?
RECO says failing to deliver a deposit is a breach of the agreement, and the seller may cancel and sue.
How long does a condition last?
The agreement sets the deadline. A status certificate can take up to 10 days to arrive after the request and payment, so leave enough time.
Can a seller share my offer with other bidders?
If the seller directs the brokerage in writing, the content of offers must be shared with everyone making an offer, without identifying the parties.
Should a lawyer review the agreement before I sign?
Review before you sign is when changes are possible. After the conditions are waived, the deal is firm. A lawyer’s approval condition can give your lawyer time to review if you cannot before you sign.
Related Guides
Legal Information, Not Legal Advice. This guide summarizes the Statute of Frauds, the Trust in Real Estate Services Act, guidance from the Real Estate Council of Ontario and Ontario.ca, checked on October 27, 2026. Agreements and forms differ, and the terms of your own agreement decide your rights, so speak with a real estate lawyer before you sign.