Root of Contract and Root of Title

(Ontario)

Question:

1) What is a good root title? I am referring to Clause 10 in the Agreement of Purchase and Sale?

2) What is root of contract?

Answer: 

The same term is used several times over with different meanings for each.

When you are talking about something going to the “root of title” that means a fundamental issue. That essentially means the Seller has no title at all. He should not be signing an agreement to sell the property because he doesn’t own it.

This matter may be requisitioned at any time right up to the closing. It’s not caught by the title search date.

A good root of title traditionally referred to an ordinary conveyance for full consideration between two arms-length parties which took place more than 40 years ago, and that such conveyance would contain the usual covenants and a release. That really only applies to properties registered in the Registry system.

When reference is made to the root of a contract, we are simply looking at its basic fundamental terms.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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