OREA Form 101: A Complete Explanation of Clauses

What is OREA Form 101?

OREA Form 101, also called Agreement of Purchase and Sale, is popularly used for condo buying. It documents the contract details in real estate transactions in Ontario. It is provided by OREA (Ontario Real Estate Association) for its member use. 

Offer vs Agreement

When the buyer makes an offer on a condo, the Agreement of Purchase and Sale is referred to as an offer during the negotiation. After the contract is signed by both parties, it is then called an agreement.

OREA Form 101 vs OREA Form 100

OREA Form 101 is specifically used for condo buying, while OREA Form 100 is for the rest types of houses in the residential resale market.

This guide only highlights the difference between these two forms. For those terms not explained in Form 101, please refer to the Agreement of  Sale and Purchase in Ontario (OREA Form 100)

Main Clauses Explanations

REAL PROPERTY

There are more information that needs to be provided, compared to the freehold property resales. Those information include the condominium property type, legal name of the condominium corporation, condominium plan number, unit number, level number, building number, the number and level of parking space, and locker either by the ownership or exclusive use. 

COMMON EXPENSES

• Common expenses are called monthly maintenance fees, or condo fees in short. Condo corporation charges the buyer a monthly fee to keep the maintainence of common areas such as the lobby, gym, etc.
• The details of the common expense need to be listed out, such as insurance, hot water, heat, etc for the common elements.
• Compared to the land value of the freehold house, common expenses are one of the factors to estimate a home value in a condo purchase.

PARKING AND LOCKERS

The parking and lockers can be sold separately if they are privately owned. If they are in exclusive use, it goes with the unit and will be transferred on the closing day.

TITLE AND TITLE SEARCH

The main difference from Form 100 is that It includes registered restrictions on title placed by Condo corporation. The buyer has to agree with those restrictions.

STATUS CERTIFICATE AND MANAGEMENT OF CONDOMINIUM

• Status Certificate is a very important document to a condo buyer. It contains crucial information which may impact the buyer’s decision.
• It is normally included in the condition terms of the contract and it needs to be reviewed by a lawyer.
• What the seller acknowledges and warrants in this clause may have a large financial impact if those situations happen.

MEETINGS

• The seller acknowledges and warrants that he or she has not got the meeting notice, which may cause a large impact on the buyer's decision.
• It further clarifies the situation during the period between the offer acceptance date and the completion date. If it happens, the buyer has the right to terminate the agreement.

APPROVAL OF THE AGREEMENT

The condo corporation withholds the right to disapprove of the transaction. In a rare case, if it happens, the agreement is null and void.

ADJUSTMENTS

• The main difference from Form 100 is that there is no adjustment for the seller’s share of any assets or liabilities of the Condominium Corporation.
• These include any reserve or contingency fund to which the seller may have contributed prior to the date of completion.
• All the rest is prorated by the completion day.

In sum

It is worthwhile to learn those terms and clauses in advance, it helps you relieve the stress during the intensive negotiation.

This guide is not drafted by a lawyer. It is only based on an agent’s interpretation and perspective. Please check and verify with your real estate lawyer for completeness and accuracy..