Agreement of Purchase and Sale in Ontario Explained

An Agreement of Purchase and Sale, usually just called an APS, is the contract that governs a real estate transaction in Ontario. It is the document a buyer signs to make an offer, and that a seller signs to accept it — and once both sides have signed matching terms, it sets out exactly what each party is agreeing to do. For the buyer, that is paying the agreed price and completing the purchase. For the seller, that is transferring the property on the terms described.

Most residential APSs in Ontario use a standard pre-printed form published by local real estate boards, with schedules attached to add or modify specific clauses. The standard form is useful because it already addresses many of the issues that commonly come up in a sale, but it is still a negotiable contract — either side can propose changes, and nothing is final until both sides sign off on identical terms.

It is worth remembering that an APS is a distinct document from a mortgage commitment, a listing agreement, or the final closing paperwork. It sits in the middle of the process: it is signed well before closing, and its terms determine what has to happen between signing and the closing date for the deal to actually complete.

While every deal has its own details, a complete APS generally needs clear, unambiguous agreement on a handful of core elements. Leaving any of these vague is one of the more common sources of disputes later in the transaction.

The parties. The full legal names of the buyer and seller need to be correct, since this is who the contract binds and who ultimately takes title to or transfers the property.

The property. The agreement should identify the property clearly, typically by municipal address and legal description, so there is no ambiguity about what is being bought and sold.

The purchase price. The total price, how it will be paid (cash, balance due on closing, assumption of an existing mortgage, and so on), and the currency, if relevant, should all be clearly stated.

The deposit. The amount of the deposit, when it is due, and who holds it in trust are all generally addressed in the agreement. Deposits are a detailed topic on their own — see our guide to real estate deposits in Ontario.

The closing date. This is the date on which the transaction is scheduled to complete — when the balance of funds changes hands and the property transfers. A firm closing date is one of the most important terms in the entire agreement.

Conditions. Many APSs include one or more conditions that must be satisfied before the deal becomes binding, such as financing or a home inspection. These are discussed in more detail below and in our dedicated guide to conditions in an Ontario APS.

An APS does not become binding the moment a buyer signs it. It becomes binding once the seller accepts the exact terms offered — or once the buyer accepts the seller’s counter-offer — and both sides have signed off on an identical set of terms. Any time one side changes a term, such as the price or closing date, that becomes a counter-offer that the other side must separately accept before a contract exists.

This distinction matters because the practical and legal consequences of changing your mind are very different depending on where the deal stands. A buyer who has not yet satisfied a financing condition generally has a defined, contractual way to exit the deal if financing genuinely cannot be arranged. A buyer who has already waived that condition, or who never had one, is in a very different position — the agreement is firm, and backing out at that stage is treated as a breach of contract rather than an exercise of a contractual right.

Conditions are clauses that make the obligation to complete the purchase dependent on something being confirmed — typically within a specific number of days after acceptance. Common examples include a financing condition (confirming mortgage approval), an inspection condition (confirming the property’s condition is acceptable), and, for condominiums, a condition allowing the buyer’s lawyer to review the status certificate.

A condition is generally satisfied either by the event happening (financing is approved) or by the buyer choosing to waive it — that is, giving up the benefit of the condition even if it has not technically been met. Waivers are normally done in writing and within the time frame the agreement sets out. Missing that deadline without acting can have serious consequences, including the deal automatically ending or automatically becoming firm, depending on how the clause is worded.

Because the stakes are high, it is worth reading the exact wording of each condition closely rather than relying on a general sense of what it is supposed to do. Some conditions are drafted to be “in the buyer’s sole and absolute discretion,” giving the buyer broad latitude to simply decide not to proceed, while others require a genuine, good-faith effort to satisfy the condition before walking away.

A frequent source of post-closing disputes is disagreement over what, exactly, was supposed to stay with the property. Ontario law generally distinguishes between “fixtures” (items attached to the property, which are presumed to be included unless the agreement says otherwise) and “chattels” (movable items, which are presumed to be excluded unless the agreement says they are included).

Because this default presumption can be easy to get wrong in practice — a mounted television, a shed, or a particular light fixture can go either way depending on how attached it is and what the parties intended — a well-drafted APS lists out specific included and excluded items explicitly, rather than leaving it to the general fixture-versus-chattel rule. Appliances, window coverings, and anything the seller plans to take with them are common items worth spelling out clearly.

Once an APS is firm, both the buyer and seller are generally expected to take the steps needed to close on the agreed date — arranging financing, completing a final walkthrough, and having a lawyer prepare the closing documents. Problems that surface after this point, such as a buyer’s financing falling through or a seller being unable to deliver clear title, raise different issues depending on which side caused the problem and when it arose.

Our guide to what happens when a buyer or seller fails to close covers the remedies available to the other side, including damages and, in some cases, an order forcing the sale to proceed. For a broader look at exit options earlier in the process, see our guide to backing out of a real estate deal.

This article provides general information about how Agreements of Purchase and Sale generally work in Ontario. It is not legal advice about your specific transaction. Our tools can help you organize questions before speaking with a professional, and you can reach out through our contact page with general questions about the site.