OREA Agreement of Purchase and Sale: Investor's Clause-by-Clause Guide

The Ontario Real Estate Association (OREA) Agreement of Purchase and Sale is the standardized contract that governs almost every residential real estate transaction in the province. Realtors use it, lawyers review it, and buyers sign it — often without fully understanding which clauses carry the most risk when you're buying as an investor rather than a homeowner.

Several provisions in the standard OREA forms behave very differently in an investment context. A clause that is routine for a primary residence purchase can create significant legal and financial exposure when you're acquiring a tenanted property or planning to occupy a unit purchased from a landlord.

Two Forms, One System

OREA produces distinct forms for different property types:

Form 100: Used for freehold residential properties — detached houses, semis, townhouses, and row homes. This is the standard form for non-condo purchases.

Form 101: Used specifically for condominium resale purchases. It includes provisions specific to condo ownership, including the right to review the Status Certificate and the Schedule of Tenancies for tenanted units.

Both forms are standardized, meaning the core clauses are identical across transactions. Specific deal terms are inserted into the blank fields, and additional conditions are added as schedules appended to the standard form.

The Conditions Clauses: Where the Deal Lives or Dies

Every investment purchase should include two standard conditions that give you a structured exit if the deal falls apart on diligence.

Financing Condition: The buyer has a specified number of business days (typically 5 to 7) to secure a written mortgage commitment satisfying stated terms. If financing falls through within this window, you can rescind the agreement without penalty and recover your deposit. For investment properties under the 2026 OSFI framework — where rental income must independently support the mortgage debt service — securing a confirmed commitment before removing this condition is critical. Do not waive financing on investment property purchases.

Inspection Condition: Gives you the right to conduct a professional property inspection and rescind if the findings are unsatisfactory. For freehold properties, this is straightforward. For condominium purchases under Form 101, the equivalent condition is the Status Certificate Review.

Status Certificate Condition (Form 101): The buyer has a window — typically 10 calendar days after the certificate is received — for legal counsel to review the Status Certificate and advise whether to proceed. The Status Certificate costs the seller $100 to obtain and the condo corporation has up to 10 days to produce it.

For condo investment buyers, the Status Certificate review is arguably the most important due diligence step in the transaction. Your lawyer is reviewing four specific risk vectors: the reserve fund trajectory (is it adequately funded?), active or pending litigation against the corporation, restrictions on renting the unit, and the common element fee history. A reserve fund falling below 25% of projected major repair costs is a serious warning sign — it signals potential special assessments of $5,000 to $50,000 per unit, levied suddenly against owners.

The Requisition Date

A clause that's easy to overlook and genuinely consequential: the Requisition Date is the deadline by which the buyer's lawyer must submit title requisitions — formal letters demanding the seller remedy any defects discovered in the title search.

If the contract specifies a requisition date and the buyer's lawyer misses it, certain title objection rights can be waived. If the contract doesn't specify one, the Vendors and Purchasers Act defaults to 30 days from contract execution.

In practice, your lawyer handles this. The reason it matters to you as a buyer is this: if the title search reveals a problem (an undischarged mortgage, an execution against the seller, a utility easement that wasn't disclosed), the requisition date determines whether you have leverage to demand a remedy before closing or whether you've inadvertently accepted the defect.

The Closing Date and Standard Timeline

Ontario residential transactions typically close in 30 to 60 days. The closing (completion) date is specified in the OREA APS and is a hard deadline for both parties. Extensions require mutual written consent.

For investment property acquisitions, the standard 30 to 60 day window is often tight, particularly when:

• The property is tenanted and the seller is obtaining an N12 notice for vacant possession
• A condo purchase requires Status Certificate review and the corporation takes the full 10 days to produce it
• Financing under the 2026 OSFI rules requires more extensive documentation of the property's rental income independently supporting debt service

When negotiating an investment purchase involving a sitting tenant and required vacant possession, push for a 90-day closing or longer. The N12 notice itself requires 60 days' minimum notice to the tenant, and the tenant has the right to remain in the unit and request an LTB hearing — which can easily push past a 60-day closing date.

The Schedule of Tenancies: Critical for Tenanted Properties

If you're acquiring a property with an existing tenant, Form 101 (and a supplemental schedule to Form 100 for freehold properties) requires the seller to complete a Schedule of Tenancies. This document compels disclosure of:

• The current monthly rent
• The exact amount of the Last Month's Rent (LMR) deposit held
• Whether the deposit is interest-bearing and whether interest is current
• The presence of any rent arrears
• Utility responsibility allocations
• Any pending applications at the Landlord and Tenant Board

On closing, your lawyer's Statement of Adjustments will transfer the LMR deposit from the seller to you. This is your inherited obligation — the tenant's last month's rent deposit must be maintained and returned with interest at the end of the tenancy, regardless of which owner collected it. Verify the exact deposit amount and confirm the interest has been tracked and credited.

Also confirm through the Schedule of Tenancies whether the unit is subject to rent control. Any unit first occupied before November 15, 2018 is rent-controlled, limiting you to the annual provincial guideline increase (2.1% for 2026). Units first occupied after that date are exempt and can be increased by any amount with 90 days' notice and once every 12 months.

The Irrevocability Period

Once signed by the buyer and presented to the seller, the offer is irrevocable for a specified period — typically 24 to 48 hours on competitive offers, longer for less competitive markets or when the seller requires time for review. During the irrevocability period, the seller must either accept, reject outright, or counter. If the seller counters, the original offer dies and the counter-offer becomes the new offer with its own irrevocability window.

The deposit — typically 5% of the purchase price for Ontario investment properties — is held in trust by the listing brokerage or lawyer and released to the seller on closing. If the buyer breaches the contract (fails to close without a valid condition allowing rescission), the seller is entitled to the deposit and may sue for additional damages.

Common Investor Additions to the Standard Form

Most investment purchases involve additional clauses appended to the standard form as schedules:

HST adjustment clause: Clarifies who is responsible for the HST on a new construction property if the buyer is an investor (not eligible for the primary residence rebate) and whether the purchase price is HST-inclusive or exclusive.

Assignment clause: For pre-construction purchases, specifies whether the buyer has the right to assign the contract to a third party before closing and whether the builder's consent is required.

Tenant representation warranty: The seller warrants that all tenancy information in the Schedule of Tenancies is accurate and complete as of the closing date.

Income and expense disclosure: For multi-unit residential properties, the buyer may request a schedule disclosing actual rental income, property taxes, insurance costs, and operating expenses for the trailing 12 months.

Understanding these clauses before you sign — not after — is what separates a structured investment acquisition from one that creates unexpected liabilities at closing. The Ontario Investment Property Guide walks through the complete transaction framework, from OSFI pre-approval to final registration.

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