Owner Financed Sales Contract for Canada

Owner Financed Sales Contract Template for Canada

An Owner Financed Sales Contract is a legally binding agreement used in Canadian jurisdictions where the property seller provides financing to the buyer instead of a traditional financial institution. This document combines elements of both a purchase agreement and a financing agreement, outlining the terms of sale, payment schedule, interest rates, and security arrangements. It must comply with both federal regulations regarding interest and financing, as well as provincial property laws. The agreement includes provisions for property transfer, payment terms, default remedies, and security interests, while ensuring compliance with provincial registration requirements and federal interest rate regulations.

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What is a Owner Financed Sales Contract?

The Owner Financed Sales Contract serves as an alternative financing solution in Canadian real estate transactions where traditional bank financing may not be available or desired. This comprehensive document is particularly useful in situations where sellers are willing to act as lenders, offering more flexible terms than conventional financial institutions. The agreement must comply with provincial property laws and federal financing regulations, including the Interest Act and criminal interest rate provisions. It includes detailed terms for both the sale and financing aspects, such as purchase price, down payment, interest rate, amortization schedule, and security arrangements. The document is commonly used in both residential and commercial property transactions, particularly in situations involving unique properties, quick closings, or buyers who may not qualify for traditional mortgage financing.

What sections should be included in a Owner Financed Sales Contract?

1. Parties: Identification of the seller (vendor) and buyer (purchaser), including full legal names and addresses

2. Background: Context of the transaction, including brief property description and parties' intention to enter into owner-financing arrangement

3. Definitions: Key terms used throughout the agreement, including Property, Purchase Price, Principal Amount, Interest Rate, and Payment Terms

4. Purchase and Sale: Core agreement to purchase and sell the property, including the total purchase price and deposit details

5. Financing Terms: Detailed terms of the owner financing, including principal amount, interest rate, payment schedule, and amortization period

6. Security Arrangements: Description of security interests, including mortgage or charge on the property

7. Title and Property Transfer: Provisions regarding property title, transfer process, and registration requirements

8. Representations and Warranties: Standard representations by both parties regarding authority, title, and property condition

9. Payment Terms and Conditions: Detailed payment obligations, including method of payment, due dates, and prepayment provisions

10. Default and Remedies: Consequences of default and available remedies for both parties

11. Insurance and Property Maintenance: Requirements for property insurance and maintenance during the financing period

12. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution

What sections are optional to include in a Owner Financed Sales Contract?

1. Property Management: Required when the property includes rental units or requires specific management arrangements during the financing period

2. Environmental Matters: Necessary for properties with potential environmental concerns or specific environmental requirements

3. Assignment and Transfer: Include when parties want to specifically address the ability to assign or transfer rights under the agreement

4. Tax Matters: Required when there are specific tax considerations or arrangements between the parties

5. Property Development: Necessary when the buyer plans to develop or significantly modify the property during the financing period

6. Co-owner Provisions: Required when multiple buyers are involved in the purchase

7. Guarantees: Include when additional parties are providing guarantees for the buyer's obligations

What schedules should be included in a Owner Financed Sales Contract?

1. Schedule A - Property Description: Detailed legal description of the property and included fixtures/chattels

2. Schedule B - Payment Schedule: Detailed amortization schedule showing payment dates, amounts, and principal/interest breakdown

3. Schedule C - Property Condition Report: Detailed description of property condition at time of sale

4. Schedule D - Title Encumbrances: List of existing encumbrances, easements, or restrictions on title

5. Schedule E - Insurance Requirements: Detailed insurance requirements and minimum coverage amounts

6. Appendix 1 - Property Documents: List of all property-related documents provided to the buyer

7. Appendix 2 - Form of Security Documents: Templates or copies of mortgage/charge documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Property Development

Construction

Financial Services

Legal Services

Property Management

Commercial Property

Residential Property

Agriculture (for farm properties)

Retail (for commercial properties)

Relevant Teams

Legal

Real Estate

Finance

Risk Management

Property Management

Business Development

Commercial Operations

Investment

Compliance

Asset Management

Relevant Roles

Real Estate Lawyer

Property Manager

Real Estate Agent

Commercial Property Director

Finance Manager

Legal Counsel

Contract Administrator

Property Developer

Risk Manager

Mortgage Specialist

Real Estate Investment Manager

Chief Financial Officer

Business Development Manager

Asset Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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