Understanding Conditions in Agreements of Purchase and Sale of Real Estate in Ontario, Canada

Agreements of Purchase and Sale of Real Estate in Ontario, Canada

In the world of real estate, the Agreement of Purchase and Sale (APS) serves as the cornerstone document that outlines the terms and conditions under which a property will be bought and sold. For those navigating the property market, understanding the conditions in Ontario real estate agreements is crucial for anyone navigating the property market. These conditions play a vital role in protecting the interests of both buyers and sellers, ensuring that all parties have the necessary safeguards in place before a transaction is finalized. In this blog, we’ll explore the various conditions commonly found in Ontario’s real estate agreements, their significance, and how they impact the purchase or sale of a property.

  1. Financing Condition

One of the most common conditions in an APS is the financing condition. This condition is included to ensure that the buyer can secure the necessary financing or mortgage to purchase the property. The typically drafted Financing Condition stipulates a specific timeframe within which the buyer must obtain approval for financing. If the buyer cannot secure financing within this period, they have the right to back out of the deal without penalty. This condition is crucial for buyers, as it protects them from being locked into a purchase they cannot afford.

  1. Home Inspection Condition

The home inspection condition is another vital clause, particularly for buyers. This condition normally allows the buyer to have the property inspected by a professional to assess its condition. The inspection can uncover potential issues with the property, such as structural problems, electrical faults, or plumbing issues. Based on the inspection results, the buyer maybe  able to renegotiate the purchase price, request repairs, or even withdraw their offer without facing penalties if significant problems are found.

  1. Sale of Buyer’s Property Condition

For buyers who need to sell their current home before purchasing a new one, the sale of the buyer’s property condition is essential. This condition typically makes the purchase contingent upon the sale of the buyer’s existing property by a certain date. It ensures that the buyer will not be financially overextended by owning two properties simultaneously. If the buyer’s property does not sell within the stipulated timeframe, they may be able to cancel the APS without repercussions.

  1. Title Search Condition

The title search condition is crucial for uncovering any legal issues associated with the property’s title. This condition normally allows the buyer’s lawyer to conduct a thorough search to ensure the title is clear of liens, encumbrances, or outstanding mortgages that could affect the buyer’s ownership. If issues are discovered during the title search, the buyer has the option to request that the seller resolves these issues before closing or to terminate the agreement.


  1. Zoning and Compliance Conditions

This condition is particularly important for buyers intending to use the property for specific purposes, such as commercial activities or renovations. The zoning and compliance condition ensures that the property’s use complies with local zoning laws and building codes. It allows the buyer to verify that their intended use of the property is legally permissible and that any existing structures on the property comply with local regulations.


Conditions in Agreements of Purchase and Sale play a critical role in the real estate transaction process in Ontario. They provide a framework for addressing potential issues and ensuring that both buyers and sellers are protected. Whether you’re a first-time homebuyer or an experienced real estate investor, understanding these conditions and their implications is crucial for a successful real estate transaction. By carefully negotiating and drafting these conditions, parties can achieve a fair and equitable agreement that meets their needs and protects their interests.

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!


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