Real Estate Paperwork Explained: For Ontario Buyers

— We take our content seriously. This article was written by a real person at BREL.

I wonder if he’s wearing pants?

There’s a LOT of important paperwork that is part of buying or selling a property in Ontario. While real estate forms can vary, the Ontario Real Estate Association (OREA) has produced a set of standard forms that are commonly used for resale residential and commercial leases and sales; the standard forms are then customized to the individual situation. Today, I’ll be looking at each form and explaining what they mean.

Note: This post had originally included links to the relevant forms as well as Plain English versions of the standard forms. OREA has asked us to remove these links; all the forms discussed can be obtained from your REALTOR.

Related: Understanding Ontario Home Seller Paperwork

But before we begin, some overall info you should know:

• In Ontario, all REALTORS work for a brokerage and represent the brokerage
• All agreements are legally between you (the Buyer) and your REALTOR’s brokerage (not the individual you are working with)
• In this blog, the word “agent’ refers to “REALTOR”. While “agent” isn’t a legal term, it’s the word we commonly use instead of REALTOR and refers to the person who represents the Buyer or Seller.
• All real estate forms and documents can be signed electronically with an acceptable electronic signature program (eg. Docusign), including the Agreement of Purchase and Sale
• Your agent should take the time to explain what the documents mean to you – don’t be afraid to ask questions and don’t sign anything without reading it.
• You have a legal right to receive a copy of all the forms you sign

Working with a REALTOR (WWR) – OREA Form 810

The Working With a REALTOR (WWR) form from OREA summarizes the different ways that a person can work with a real estate agent. It explains, in plain English, what it means to be a ‘client’ and what it means to be a ‘customer’. Those are two important distinctions in Ontario, as they dictate the services you’ll receive and your agent’s obligations. It also explains what happens if the same agent is representing both the Buyer and the Seller on the same transaction or sale (multiple representation).

• The Working with a REALTOR form is an agreement between you (the buyer or seller) and the Brokerage – not the individual agent you are working with. The agent works on behalf of the brokerage.
• Simply signing this form doesn’t commit you to working with a particular agent and it isn’t for a specific time period. It’s simply a way to get Buyers and Sellers to acknowledge that they’ve discussed the different ways they can be represented.

In addition to the WWR form, you’ll be asked to sign one of 2 documents further defining your relationship:

1. The Buyer’s Representation Agreement (BRA); or
2. The Customer Service Agreement (CSA)

Buyer Representation Agreement (BRA)  – OREA Form 300

Ontario’s Buyer Representation Agreement is the agreement between you (the Buyer) and your agent’s Brokerage. It confirms the terms of your relationship, the commission that will be paid if you buy a property during the period of the agreement, the role of the agent and what happens if they are also representing the Seller. When you sign a BRA, it means that the agent will:

• Promote and protect your best interests
• Negotiate favourable terms for you, the Buyer
• Maintain confidentiality
• Take reasonable steps to determine and disclose material facts about the property

What does that really mean? It means your agent will give you sold data or other dirt they find that may not be in the Seller’s best interests. It means they will negotiate price and terms that are favourable to you. It means they have to take extra steps to discover material facts about the property and neighbourhood. It means they will always keep your information confidential (eg. your motivations for buying, your budget, your timeline, etc.)

In the overwhelming majority of cases, when people talk about “working with an agent,” this is the the kind of relationship they are referring to.

The Customer Service Agreement – OREA Form 310

Ontario’s Customer Service Agreement for real estate is what gets signed if a Buyer decides they don’t want to be a Client or sign the Buyer’s Representation Agreement, and yet still need the assistance of an agent nonetheless (often for drafting paperwork). It’s a non-exclusive agreement, meaning that the Buyer is not committed to the agent for anything beyond what is outlined in the form (for example, one specific property for a specific time period). The Customer Service Agreement confirms that the Buyer acknowledges that the agent is not representing the interests of the Buyer. Like the BRA, it has a timeframe and includes the commission that the agent will be paid.

If the brokerage is representing the Seller in the transaction, the OREA Customer Service Agreement confirms that the Buyer understands that the brokerage is protecting and promoting the interests of the Seller and not the Buyer. It confirms that the agent is playing a restricted role and that their obligations are:

• Fairness, honesty and integrity (ethical duty)
• Exercise due car when answering questions and providing information (legal duty)
• Avoid misrepresentation (legal duty)

Examples of what can and cannot happen under a Customer Service relationship:

• If the brokerage is representing the Seller, they must disclose anything pertinent about you (the Buyer) to the Seller (eg motivations and budget)
• The agent is not obligated to show you all properties that you are interested in
• They will not generally provide you with comparable sold data or price recommendations
• They are not required to perform additional due diligence about the property – they only need to disclose the material facts that are already known or ought to be known
• The agent may not disclose the terms of your offer to any other buyer
• The agent can’t lie to you

FINTRAC

This is a mandatory identification document required by the federal government, and stands for the Financial Transactions and Reports Analysis Centre of Canada.

Agreement of Purchase and Sale – OREA Forms 100 & 101 

This is the biggie! The Agreement of Purchase & Sale is the actual agreement for you to purchase a home! In Ontario, a real estate transaction has to be in writing to be legal, so this is the main legal document that defines the terms and conditions of your offer to purchase.  There’s a version of the form for house purchases (Form 100) and one for condo purchases (Form 101). The most important non pre-printed parts of the Agreement of Purchase and Sale are as follows:

• Legal names of the Buyers and Sellers
• Legal description of the property (including the lot details for houses, or the condo corporation for condos)
• Purchase price
• Amount and terms of the deposit [Related: All About Deposits]
• Irrevocable time (in other words, the time the offer expires if not accepted by the other side)
• Completion date (the date you take possession)
• Inclusions and exclusions (eg. appliances, light fixtures, etc.)
• Identification and terms of any rental items (eg hot water tank)
• For condos: description of the condo fees and what they cover; description of parking and locker
• Whether or not HST is applicable (usually not for resale residential sales)
• Directions for the lawyers, including important dates for title searches, closing arrangements, etc.

The schedules attached to the Agreement of Purchase and Sale form part of the agreement and are customized by the agents. Generally speaking:

• Schedule A is created by the brokerage representing the Buyer and includes the unique terms and conditions for the sale, favourable to the Buyer. Schedule A is where any conditions would be outlined (eg.  financing, home inspection, status certificate review, etc.) as well as any other terms.
• Schedule B is often included and is created by the brokerage that represents the Seller. Schedule B’s differ significantly, so make sure to read it thoroughly! Typically there will be details regarding the handling of interest on the deposit held by the selling brokerage, as well as clauses limiting the selling brokerage’s liability.

Important info about the Agreement of Purchase & Sale:

• Time limits matter on the Agreement of Purchase and Sale – if an agreement expires at 11:59 PM, it’s too late to accept it at 12:01.
• It’s not enough to just sign something within the time frame, the now accepted document also needs to be delivered to the other side before the expiry time (these days usually by email).
• The time zone that is relevant is the one that the property is located in – it doesn’t matter if the Buyer is in Europe and the Seller is in Asia. If the property is in Toronto, Toronto time dictates the time.
• All negotiations must be in writing to be legal
• Anything changed or written in must be initialled by all parties
• The brokerages and their agents are not parties to this agreement – it’s a legal contract between the Buyer and the Seller and is merely created by the agents/brokerage.

Confirmation of Cooperation – OREA Form 320

The Confirmation of Cooperation details the type of relationship the Buyer and Seller have with their agent/brokerage (eg. Client or Customer) and the commission agreement between the Seller’s brokerage and the Buyer’s brokerage. It also details what happens if the brokerage represents both the Buyer and the Seller (multiple representation). Both brokerages are party to this agreement so both agents will sign it. 

Real estate forms and paperwork aren’t nearly as complicated as they appear – but make sure your agent takes you through what they mean and don’t be afraid to ask them for clarification.