More Provisions in the Real Estate Agreement of Purchase and Sale
When selling a matrimonial home like a principal residence or cottage, it is always necessary to have the non-title holding spouse consent to the sale. For the purposes of real property, the term “spouse”, is defined as a married spouse and matrimonial home is as defined in the Ontario Family Law Act (R.S.O. 1990), therefore the term spouse does not contemplate common-law spouses in this situation. The provisions in the Agreement serves as a warranty, the Seller is warranting that the property is being sold in accordance to the Family Law Act by ensuring that both spouses are consenting to the disposition of a matrimonial home.
Urea Formaldehyde Foam Insulation Warranty (“UFFI”)
UFFI is a chemical that was once used as a form of foam insulation because it has a good thermal resistance. The problem with UFFI was that once the compounds begin to breakdown, it releases what was once believed to be very hazardous chemical particles into the air. The jury is still out on how harmful those particles really are however the stigma associated with UFFI still carries over to the acquisition of property.
Having regard to the potentially hazardous nature of this material, the OREA Agreement contains a warranty from the seller that is two-tiered. On the first level there is a warranty by the seller that the seller has not insulated the premises with UFFI during the time that the seller has owned the property. On the second level, the clause continues to warrant that to the best of the seller’s knowledge and belief there is no UFFI material existing anywhere in the structure of the property or building.
UFFI has not been used in Canada since the late Seventies and therefore if the property was built from 1980 and further, there should be limited concern that the property contains the substance, however if a seller is aware that the property does contain UFFI they have a duty to disclose that information to the buyer.
A notification in accordance with the Consumer Reporting Act, this clause states that a consumer report can be obtained or relied upon in the course of the transaction. Such a situation arises or develops, when, for instance, there is a mortgage to be taken back by the seller, and the seller wants to review the creditworthiness of the buyer/mortgagor as a condition of taking back the mortgage.
Agreement in writing
When it comes to a real estate agreement, all provisions, terms and conditions must be in writing. This requirement is even legislated by the Ontario, Statute of Frauds (R.S.O. 1990). Therefore, a buyer or seller should never rely on any verbal promises and should always demand that everything be spelled out in the agreement. If there are terms and conditions that need to be added or deleted, amendments to the agreements should be made in writing. It is further confirmed by the clause in the standard OREA form that if in the course of discussions involving the transaction there are any collateral agreements, representations, warranties or conditions stated which are not in the agreement; they do not constitute part of the agreement. Another quick but important note; any provisions, terms and conditions contained in the schedules take precedence over those contained in the standard OREA form.
Successors and assigns
The purpose of this paragraph is to have an enforceable contract, even though one or more of the parties may become deceased before performance of the agreement. For example, one’s estate will inherit the agreement and will be obligated to perform the agreement it in accordance with its terms.