The New Home Agreement of Purchase and Sale
Revised March 5, 2003

The "Agreement of Purchase and Sale" is the document that a buyer is going to sign to purchase a new home. It is a contract. Once signed, it is the blueprint for the entire transaction that follows. It should be read and fully understood before the purchaser signs on the dotted line.

Generally speaking, the layman is not going to fully understand the implications of the Agreement on his or her own. Advice from a lawyer is going to be required in order to appreciate a lot of the legal subtleties in the document.

The Agreement will set out all the basic terms of the deal including the model of home you are purchasing, a legal description of the land it will be located on, the purchase price, the amount of the deposit or deposits, the date or dates on which they must be paid, the date of closing, the time limits and process for colour and other selections, and so on. Most of these terms will be readily understood by the purchaser. However, the Agreement will also deal with legal niceties that may require explanations from legal counsel. These will include: the search of title and related time limits, delays in closing dates, the GST rebate, covenants, easements, zoning matters, rights of way, access, and warranties. If the unit being purchased shares anything in common with other units, such as party walls or access roads, there may also be a joint use agreement included in the Agreement of Purchase and Sale. This will usually require an explanation as to its meaning and its practical impact on your ability to enjoy your property on a day to day basis.

One key caution that purchasers should keep in mind is that, once the Agreement is signed, you can basically forget most of the discussions and representations made beforehand. You will be unable to rely on them or enforce them if they have not become part of the written agreement between you and your builder. All new Home Agreements of Purchase and Sale contain a provision which basically boils down to saying "This, the written agreement, is all that counts from the moment that it is signed". So, if you are being promised things by the sales staff, make sure that they are included in the contract before you sign it.

Many Agreements contain a provision that allows you to have the Agreement reviewed by a lawyer after you have signed it. A lot of people are left with the impression that, if your lawyer does not approve of the Agreement, you can get out of the deal. Generally speaking, this is not the case. It is far better for you to see your lawyer before you sign than to try to rely on one of these clauses after you have put your signature on the document.

Most new home sales staff are very knowledgeable about the Agreement of Purchase and Sale. They will go through it with you and explain its provisions. However, this is no substitute for carefully reading the contract on your own and then having it reviewed by your lawyer.

And remember, see the lawyer first! After you have signed, it may be too late for the lawyer to do anything effective to extricate you from a contract that you would not have signed had you fully understood it.