Purchase and Sale of Real Estate



The purchase and sale of real estate in Ontario involves various legal aspects that both buyers and sellers should be aware of. Here is an overview of these aspects based on the Ontario law:


  1. Rights and Obligations in Multiple Offers/Bidding Wars. The Trust In Real Estate Services Act (TRESA)
  •  Overview of New Rules: As of December 1, 2023, the Trust In Real Estate Services Act, (TRESA) establishes new rules in Ontario governing the purchase and sale of real property, providing more transparency in the offer process during bidding wars. These amendments to the Real Estate and Business Brokers Act (REBBA) include the obligation for the seller’s representative to disclose the number of written offers received, any connections between buyers’ and sellers’ brokerages, and whether there’s an agreement to reduce commission for certain buyers​.
  • Bidding Process: If the seller instructs in writing, the amount of the purchase price offered by each prospective buyer, or other content of written offers may be shared with each prospective buyer who submits an offer to purchase in writing. Personal information, or any information that would identify the person making an offer must not be shared.
  • Verifying Number of Offers: Buyers can request confirmation from the Real Estate Council of Ontario (RECO) on the number of offers received by the seller to ensure fairness. RECO can ask for documentation from the seller’s brokerage, but only the total number of offers is disclosed, not their details​.
  1. Right to Refuse to Close
  • Misconceptions and Realities: There’s a common misconception that if a buyer fails to close a transaction, they only forfeit the deposit. However, the actual consequences can be more severe, including the potential for significant damages​.
  • Deposit Forfeiture: If a buyer fails to close, the deposit is generally forfeited without the need for the seller to prove any damages​.
  • Damages Beyond Deposit: The measure of damages often includes the difference between the initial contract price and the resale price, along with costs incurred by the vendor related to reselling the property. The goal is to put the seller in the position they would have been if the transaction had closed as planned​.
  • Mitigation of Damages: Sellers are expected to mitigate their damages but aren’t held to a standard of perfection. It is generally difficult for buyers to prove that sellers failed to mitigate damages adequately​.
  1. Buyer Representation Agreements: Pitfalls and Obligations
  • Purpose and Obligations: A Buyer Representation Agreement (BRA) grants a real estate company exclusive rights to act on the buyer’s behalf. It usually stipulates a commission for the agent and terms of exclusivity. The terms, especially the duration, are negotiable and should be in writing to avoid misunderstandings.
  • Legal Disputes and Precedents: Disputes may occur if buyers engage with different agents or if there is confusion about the Buyer Representation Agreement’s (BRA) terms. In such instances, the court can declare the BRA invalid. This outcome often happens when there is evidence of misrepresentation or when the buyer demonstrates diligence and care in comprehending the contract’s terms.
  1. Rights and Liabilities Concerning Misrepresentation or Non-Disclosure
  • Types of Defects: Ontario law differentiates between patent defects (visible problems) and latent defects (not easily detectable issues). Sellers aren’t usually required to disclose patent defects, but they must disclose latent defects of which they have knowledge, especially those making the property unfit for occupancy​.
  • Responsibility of Buyers and Sellers: Buyers are encouraged to thoroughly inspect the property and ask specific questions about potential defects. Sellers must disclose known latent defects, and failure to do so can lead to legal consequences.


Real estate transactions in Ontario are governed by specific laws and regulations that address the rights and responsibilities of both buyers and sellers. Understanding these laws, especially in areas like bidding wars, contract closures, representation agreements, and disclosure of defects, is crucial for anyone involved in real estate transactions in Ontario. Consulting with a real estate lawyer is often advisable to navigate these complex legal landscapes.

Please note these materials have been prepared for general information purposes only and do not constitute legal advice. Readers are advised to seek legal advice by contacting Frank Feldman* regarding any specific legal issues.

Call the Real Estate Law Experts at Frank Feldman Law Today!


One thought on “Purchase and Sale of Real Estate

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