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Purchasing or Selling a Property

De Krupe Law > Real Estate  > Purchasing or Selling a Property

Purchasing or Selling a Property

The Agreement of Purchase and Sale

The Agreement of Purchase and Sale is the document on which the entire real estate transaction is based and is probably one the most important documents in the whole transaction.

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The Agreement will usually contain the following:

  • Names of the parties, seller and buyer;
  • Description of the property;
  • Purchase price;
  • Deposit;
  • Special terms, such conditions, mortgages to be assumed, rights of inspection and so on;
  • Standard terms such as the completion date, length of time the offer is valid, notices, chattels included, fixtures excluded, list of rental items and so on.

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Purchase of New Home

The agreement of purchase and sale for a new home is typically drafted by the builder and therefore tends to be one-sided in the builder’s favour. That is why it is important to have it reviewed by a competent lawyer.

Ontario New Home Warranties Plan Act

 

The Ontario New Home Warranties Plan Act is the governing legislation dealing with new home purchases.

The Act applies to all new homes and is administered by Tarion Warranty Corporation.

Under the Act every builder or seller of new home must register with Tarion.

Under Tarion every seller provides warranties for the following:

  • Deposit protection – maximum of $40,000 per home;
  • Defects in work and materials;
    • The builder warrants that for the year immediately following possession the home:
      • Is property constructed, in accordance with the Ontario Building Code, Act.
      • Is free from unauthorized substitutions.
      • Is free from defects in materials, and
      • Is fit for habitation.
    • The builder warrants that for the two years immediately following possession, the home is free from
      • Water penetration through basement or foundation walls;
      • Water penetration into the building envelope that is caused by defects in materials or work such as caulking, windows and doors;
      • Defects in materials or work related to the electrical, plumbing and heating systems.
      • Defects in materials or work that cause exterior cladding to detach, displace, or deteriorate, and
      • Violation of the Ontario Building Code Act’s health and safety provisions.
  • Major structural defects – builder warrants that for seven years immediately following possession, the home is free from any major structural defects. Definitions and exclusions to major structural defects can be found in Ontario New Home Warranties Plan Act;
  • Substitution of materials; and
  • Delays in completion.

Warranty coverage begins as soon as the buyer is in possession of the new home and remains until the warranty period expires even if the property is sold.