Thinking of buying a home or investing in real estate in Ontario? Before you sign an Agreement of Purchase and Sale (APS), make sure you’re not walking into a legal trap. At Philer.ai, we help buyers and sellers spot costly mistakes in real estate contracts, before they become expensive problems.
In this article, we’ll walk you through five common red flags in an APS and how to protect yourself, especially if you’re navigating Ontario’s complex real estate laws.
What Is an Agreement of Purchase and Sale?
An Agreement of Purchase and Sale (APS) is a legally binding contract between a buyer and seller in a real estate transaction. It outlines the terms, conditions, and obligations for both parties. If there’s something wrong in your APS, it could cost you thousands, or even jeopardize the entire deal.
In simpler terms: Think of the APS as the rulebook for your home purchase. It says what you’re buying, how much you’re paying, what’s included (like appliances), and what needs to happen before the deal is official. If anything in that rulebook is unclear, missing, or unfair, it could lead to unexpected costs, delays, or legal issues after you’ve already committed. That’s why reviewing it carefully is so important.
1. Vague or Missing Conditions
Red Flag: Your APS doesn’t include clear conditions for financing, home inspection, or selling your current home.
For example, ‘This Agreement is firm and binding upon execution and is not conditional upon financing or inspection.’
Why It’s Risky: Without conditions, you could be forced to close the deal even if you can’t get a mortgage or find serious issues during inspection.
How to Protect Yourself: Include specific clauses like:
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“Subject to financing approval”
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“Subject to satisfactory home inspection”
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“Conditional on the sale of the buyer’s property”
At Philer.ai, our real estate lawyers review your APS to ensure every condition is in your favour, not just the seller’s.
2. Unreasonably Short Closing Dates
Red Flag: You’re pressured to close within days or a very short window.
For example: ‘The transaction shall close on the 5th day following acceptance of this Agreement.’
Why It’s Risky: Rushed closings can leave no time for proper legal review, due diligence, or financing.
How to Protect Yourself: Negotiate a 30-90 day closing period depending on your situation. Need help reviewing the timeline? Philer.ai can flag unrealistic clauses in seconds.
3. Unclear or Missing Inclusions
Red Flag: The contract doesn’t specify whether appliances, fixtures, or upgrades are included.
For example, ‘Buyer acknowledges that inclusions and exclusions shall be determined at the discretion of the Seller.’
Why It’s Risky: You might assume items are included (like that stainless steel fridge), only to move in and find them gone.
How to Protect Yourself: Make sure your APS clearly lists what is included in the sale, especially in Schedule A. We, at Philer, help you double-check everything.
4. Seller’s Right to Cancel or Extend
Red Flag: The seller has the right to cancel or delay closing with minimal notice.
For example, ‘The Seller may, at their sole discretion, extend the closing date by up to 30 days without penalty.’
Why It’s Risky: You could lose your deposit or end up stuck without a place to live.
How to Protect Yourself: Avoid agreements where the seller has one-sided control over closing. Philer.ai identifies risky clauses and helps you negotiate better terms, fast.
5. “As-Is” Clauses Without Disclosure
Red Flag: The property is being sold “as-is, where-is” with no warranties.
For Example, ‘The Buyer agrees to accept the property in ‘as-is, where-is’ condition, with no representations or warranties from the Seller.’
Why It’s Risky: You may be stuck with hidden issues like structural damage, pests, or code violations.
How to Protect Yourself: Never waive your right to a home inspection. And before accepting an “as-is” clause, use Philer.ai to scan the contract and get instant legal insights from Ontario real estate experts.
Final Thoughts
The real estate market moves fast, but you shouldn’t have to compromise on legal safety. Before you commit to any Agreement of Purchase and Sale in Ontario, make sure everything checks out with a proper legal review.
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