Deposit in the Agreement of Purchase and Sale

When Due?

The standard Form OREA Agreement of Purchase and Sale makes the following reference to the Deposit:

“DEPOSIT: Buyer submits …………………………………………………………………………………………………………………….(Herewith/Upon Acceptance/as otherwise described in this Agreement) ……………………………………………………………………….Dollars (CDN$) …………………..”

There are three choices when it comes to the timing of payment of the deposit:

Herewith

That means now. The cheque is attached to the Offer. Or, the deposit may already have been submitted to the Seller’s Brokerage in trust before the Offer.

What it means is that the deposit is “cashable now”. This is not a coming soon indication.

A photocopy of a cheque, a scan or a picture of the cheque is not sufficient. It needs to be “delivered”.

Upon Acceptance

There is some additional wording:

“For the purposes of this Agreement, “Upon Acceptance” shall mean that the Buyer is required to deliver the deposit to the Deposit Holder within 24 hours of the acceptance of this Agreement.”

Notice that it says “within”. That means, of course, that 24 hours is actually too late. The specific deadline would be 23:59:59 hours.

You would also need to know precisely when the Offer was accepted in order to start the clock running.

As Otherwise Described in this Agreement

This is the third option on the pulldown menu on WebForms. It is the one that should be selected all the time. This way, you will know precisely when it is due. This will allow you to take into consideration, holidays, weekends, days which are bank holidays and so on.

Brian Madigan LL. B., Broker

www.OntarioRealEstateSource.com