Real Estate Purchase Agreement With Seller Financing for Canada

Real Estate Purchase Agreement With Seller Financing Template for Canada

A comprehensive legal document governed by Canadian federal and provincial laws that facilitates a real estate transaction where the seller provides financing to the buyer instead of a traditional mortgage lender. The agreement combines elements of both a standard purchase agreement and a mortgage document, detailing the property transfer terms and the financing arrangement. It includes specific provisions for payment schedules, interest rates, security interests, and default remedies, while ensuring compliance with Canadian real estate and financing regulations.

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What is a Real Estate Purchase Agreement With Seller Financing?

The Real Estate Purchase Agreement With Seller Financing is utilized in situations where traditional mortgage financing through financial institutions is either not preferred or not available. This document, governed by Canadian federal and provincial legislation, serves a dual purpose by combining both the property sale agreement and the financing arrangement in one comprehensive contract. It's particularly relevant in scenarios where sellers are willing to accept periodic payments instead of a lump sum, offering buyers an alternative financing option. The agreement must comply with provincial real estate laws, federal interest rate regulations, and security registration requirements. It includes detailed terms about the property transfer, payment schedule, interest rates, security measures, default provisions, and both parties' rights and obligations throughout the financing period. This type of agreement requires careful consideration of both real estate and financing aspects to ensure proper protection for all parties involved.

What sections should be included in a Real Estate Purchase Agreement With Seller Financing?

1. Parties: Identification of the Seller and Buyer, including full legal names, addresses, and any other relevant contact information

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

3. Definitions: Key terms used throughout the agreement, including technical and financial terms specific to seller financing

4. Property Description: Detailed legal description of the property, including address, legal boundaries, and property identification numbers

5. Purchase Price and Deposit: Total purchase price, deposit amount, and payment schedule including initial down payment

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

7. Security and Registration: Details of mortgage registration, liens, and other security interests to protect the seller's financial interest

8. Conditions Precedent: Conditions that must be satisfied before closing, including property inspection, title search, and financing approval

9. Representations and Warranties: Statements of fact by both parties regarding the property, their authority to enter the agreement, and financial capacity

10. Closing Procedures: Steps to be taken at closing, including document delivery, payments, and registration requirements

11. Default and Remedies: Consequences of default by either party and available remedies

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

13. Transfer of Title: Process and timing of title transfer, including any conditions or restrictions

14. General Provisions: Standard legal clauses including governing law, notices, amendment procedures, and severability

What sections are optional to include in a Real Estate Purchase Agreement With Seller Financing?

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

2. Early Payment Provisions: Include when parties want to specify terms for early payoff or prepayment penalties

3. Environmental Matters: Required for properties with potential environmental concerns or when environmental assessments are needed

4. Assignment Rights: Include when either party may need to transfer their rights under the agreement

5. Co-Borrower Provisions: Required when multiple buyers are involved in the financing arrangement

6. Property Development Rights: Include when the buyer plans to develop or significantly modify the property during the financing period

7. Seller's Right of First Refusal: Include when the seller wants the right to repurchase the property if the buyer decides to sell

8. Cross-Collateralization: Required when additional properties or assets are used as security for the financing

What schedules should be included in a Real Estate Purchase Agreement With Seller Financing?

1. Schedule A - Property Details: Comprehensive property description, including fixtures, chattels, and excluded items

2. Schedule B - Payment Schedule: Detailed amortization schedule showing all payments, interest, and principal balance

3. Schedule C - Property Inspection Report: Results of property inspection and any identified issues requiring attention

4. Schedule D - Title Search Results: Summary of title search showing existing liens, easements, or encumbrances

5. Schedule E - Insurance Requirements: Detailed specifications for required insurance coverage

6. Schedule F - Property Maintenance Standards: Specific requirements for property maintenance during the financing period

7. Appendix 1 - Required Disclosures: Mandatory disclosures required by provincial real estate laws

8. Appendix 2 - Property Tax Assessment: Current property tax assessment and payment status

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

Financial Services

Legal Services

Property Development

Construction

Property Management

Insurance

Banking

Investment

Professional Services

Relevant Teams

Legal

Real Estate Operations

Property Management

Contract Administration

Risk Management

Investment

Finance

Compliance

Business Development

Document Management

Relevant Roles

Real Estate Agent

Real Estate Broker

Property Manager

Real Estate Lawyer

Real Estate Developer

Investment Manager

Property Appraiser

Title Officer

Mortgage Specialist

Real Estate Investment Advisor

Contract Manager

Legal Counsel

Property Administrator

Financial Advisor

Real Estate Portfolio Manager

Industries
Real Estate and Business Brokers Act (REBBA): Provincial legislation that governs real estate transactions and the conduct of real estate professionals, ensuring proper documentation and disclosure requirements are met
Interest Act: Federal legislation that regulates how interest rates are calculated and disclosed in real estate transactions, particularly relevant for seller financing arrangements
Land Registration Reform Act: Provincial legislation governing the registration and transfer of real property interests, including mortgages and financing arrangements
Personal Property Security Act (PPSA): Provincial legislation that may apply to secure the seller's interest in the property until full payment is received
Mortgages Act: Provincial legislation governing mortgage terms, conditions, and enforcement rights, which is relevant for structuring the seller financing arrangement
Statute of Frauds: Provincial legislation requiring certain contracts, including those involving real estate, to be in writing and properly executed
Planning Act: Provincial legislation governing land use and subdivision, which may affect the transaction depending on the property type
Criminal Code of Canada - Section 347: Federal criminal law provisions regarding criminal interest rates, which must be considered in setting interest rates for seller financing
Consumer Protection Act: Provincial legislation protecting consumer rights in financial transactions, which may apply if the buyer is purchasing for personal use
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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