Agreement of Purchase and Sale (APS) Mechanics in Ontario

What the APS is

The Agreement of Purchase and Sale (APS) is the contract that sets out the terms on which a buyer will buy and a seller will sell real property in Ontario. In residential resale deals, most brokerages use the OREA standard Form 100, supplemented by schedules (Schedule A for additional terms) and clause forms. The APS covers the parties, the property, the price and deposit, chattels/fixtures, conditions, key dates (irrevocability, requisition, completion), title, and the signatures/acceptance.

Offer, counter-offer, and irrevocability

An offer is a signed APS submitted by one party. The other party can accept, reject, or make a counter-offer (a sign-back that changes terms). A counter-offer is legally a new offer; the original is no longer open once countered. Agreement is reached only when one party accepts the other's terms without change and communicates that acceptance within the deadline.

Irrevocability

The irrevocability clause sets a specific time and date by which the offer (or counter) must be accepted. Until that deadline, the party who made the offer is bound to keep it open; if the other side does not accept in time, the offer becomes null and void and the offering party is released. Practically, each sign-back typically resets a fresh irrevocable period (e.g., "irrevocable until 11:59 p.m. on [date]").

Acceptance must be communicated back before irrevocability expires for a binding agreement to form.

The deposit

The APS states the deposit amount and when it is delivered. On Form 100 the buyer chooses one of:

• "Herewith" — the deposit accompanies the offer; the clock for depositing it to trust starts when the receiving brokerage gets the cheque.
• "Upon Acceptance" — the deposit is delivered after the offer is accepted (the form provides for delivery within 24 hours of acceptance unless otherwise stated).
• "As otherwise described in this Agreement" — a custom timing set out in the agreement/schedule.

The deposit is delivered to the Deposit Holder (normally the listing brokerage) and held in trust pending completion or other termination of the agreement, then credited toward the purchase price on closing. Under the standard form the trust account is non-interest bearing unless the parties specifically agree otherwise. (Deposit handling and trust-account rules are covered in detail in the companion note deposits-and-trust-accounts.md.)

Conditions

Conditions are terms that must be met (or removed) for the deal to become binding, inserted for the benefit of one party. Common buyer conditions:

• Financing — the buyer is satisfied they can arrange a mortgage. If the condition is not satisfied and is not waived, the agreement ends and the deposit is normally returned.
• Home inspection — the buyer obtains and is satisfied with an inspection.
• Status certificate review (condominiums) — the buyer's lawyer reviews the condo status certificate and governing documents.
• Sale of the buyer's existing property (SPP) — the deal is conditional on the buyer selling their current home, often with an escape clause (see below).

Each condition has a deadline. If it is not fulfilled or waived by that time, the standard wording makes the agreement null and void and the deposit is returned to the buyer (subject to the exact clause language).

Sale-of-property (SPP) and the escape clause

An SPP condition ties the purchase to the buyer selling their own home. Because this can tie up the seller's property, SPP deals typically include an escape clause ("time clause"): the seller may continue to market the property, and if the seller receives another acceptable offer, they can give the first buyer notice (commonly 24, 48, or 72 hours — verify the exact period in the clause) to either waive the SPP condition and firm up, or let the agreement end so the seller can proceed with the new offer.

Waivers vs. Notices of Fulfilment (Confirmation)

Removing a condition is done two ways, and the distinction matters:

• Waiver — the party gives up the protection of the condition and proceeds even though it may not be fully satisfied (e.g., proceeding despite minor inspection deficiencies, or before final financing approval). A waiver removes the condition and moves the deal toward firm.
• Notice of Fulfilment / Confirmation — the party confirms the condition has actually been met as written (e.g., financing was approved). This is a factual confirmation and preserves a cleaner evidentiary record.

Both a valid waiver and a valid notice of fulfilment turn a conditional deal into a firm one. OREA provides dedicated forms for these (for example, a Notice of Fulfilment of Condition(s) form and Waiver form — confirm current form numbers on OREA). The safer choice depends on the situation: use fulfilment when the condition is genuinely satisfied, waiver when the party chooses to proceed despite unresolved uncertainty. Because a waiver strips away protection, buyers should get advice before signing one.

The waiver/notice must be delivered before the condition's deadline — failing to remove a condition in time can nullify the agreement.

Requisition date and title search

The requisition date (title search date) is the deadline by which the buyer's lawyer examines title and raises any requisitions (objections) about the property. Under the standard Form 100 wording, the buyer is allowed until 6:00 p.m. on the Requisition Date to examine title at the buyer's expense, and a related window (tied to the requisition date or condition-removal date) to satisfy themselves about outstanding work orders/deficiency notices, that the property may lawfully be used as intended, and that buildings are insurable. If the buyer raises a valid requisition the seller cannot or will not resolve, the standard clause allows the agreement to be terminated with the deposit returned.

Completion / closing date

The completion date (closing) is when the transaction is finalized — title transfers, funds change hands, and the buyer takes possession. The standard form requires completion by no later than 6:00 p.m. on the specified day. The date is agreed at signing; in practice it is set to a business day (closings are not done on weekends or statutory holidays because land registration and lawyers' trust transfers require business banking days). On closing, the deposit held in trust is credited to the purchase price and the balance is paid.

"Time is of the essence"

The APS states that "time shall be in all respects of the essence." This means the deadlines are strict: irrevocability, condition, requisition, and completion dates must be met exactly. Missing a date is not a trivial slip — it can put a party in breach and, in the case of the buyer, can put the deposit and the deal at risk. Extending any date requires the written agreement of both parties (an amendment). Realtors should diary every date and push for timely, written waivers/notices/amendments.

Firm vs. conditional offers

• A firm offer has no conditions — once accepted (and irrevocability met), the parties are immediately bound to complete on the terms, subject only to standard title/requisition provisions. Firm offers are common in competitive markets but riskier for buyers because there is no financing or inspection out.
• A conditional offer contains one or more conditions. It is a binding agreement to proceed if the conditions are met/waived, but it can end (usually with the deposit returned) if a condition is not satisfied or waived by its deadline. Once all conditions are removed, the deal becomes firm.

Quick reference for realtors

• Offer → counter → acceptance; each is bound by an irrevocability deadline.
• Deposit: "Herewith" / "Upon Acceptance" (within 24 hrs) / "As otherwise described"; held in trust, non-interest bearing on the standard form, credited on closing.
• Conditions (financing, inspection, status certificate, SPP) end the deal if not met/waived by deadline; SPP usually carries an escape clause.
• Waiver = proceed despite unmet condition; Notice of Fulfilment = condition actually met. Both firm up the deal; deliver before the deadline.
• Requisition date = buyer's lawyer examines title (until 6 p.m.); completion date = closing (by 6 p.m., a business day).
• Time is of the essence — deadlines are strict; extend only by written amendment.

Clause wording, form numbers, and standard timeframes on OREA forms are updated from time to time — verify against the current OREA Form 100 and related forms, and refer transaction-specific questions to a real estate lawyer.