Buying or selling property in Nova Scotia involves several legal steps. One of the most critical documents in the process is the Agreement of Purchase and Sale. Many people encounter this document for the first time when entering a real estate transaction.
Understanding what an Agreement of Purchase and Sale is—and what it includes—can help clarify the steps involved. This article explains the basics of this agreement as it applies to real estate law in Nova Scotia.
- What is an Agreement of Purchase and Sale in Nova Scotia
- Standard Forms Buyers and Sellers Commonly Use
- Essential Clauses Every Nova Scotia APS Contains
- Common Buyer and Seller Conditions
- Step-By-Step Timeline From Offer to Closing
- Title Search and Migration Requirements
- Costs and Taxes to Budget For
- Special Schedules For Different Property Types
- How Private Sales Differ From REALTOR® Transactions
- Why a Lawyer's Review Matters
- Move Forward With Confidence With LM Legal Solutions
- FAQs About Agreements Of Purchase And Sale In Nova Scotia
What is an Agreement of Purchase and Sale in Nova Scotia
An agreement of purchase and sale in Nova Scotia is a legally binding contract between a buyer and a seller. It outlines the terms and conditions for the transfer of ownership of property.
This agreement outlines key details including the purchase price, closing date, and any outstanding conditions that need to be met before the sale is finalized. Under Nova Scotia law, the agreement is required to be in writing to be enforceable. Both parties sign the document to show that they agree to its terms.
The Nova Scotia Real Estate Commission (NSREC) regulates most real estate forms used in our province. These standardized forms help ensure consistency across transactions and protect both buyers and sellers.
Standard Forms Buyers and Sellers Commonly Use
In Nova Scotia, most real estate transactions use standardized forms approved by the NSREC. These Nova Scotia real estate forms create consistency and help ensure all key points are addressed. The form that applies depends on the type of property and the nature of the transaction.
- Form 400 is the most common agreement of purchase and sale form 400 for existing homes. REALTORS® typically use this template when a buyer makes an offer on a house that has already been built and previously owned.
- Form 403 applies to new construction purchases. This form addresses details unique to new builds, such as construction completion dates and warranty provisions.
- Form 402 is a schedule added to Form 400 when buying a resale condominium unit. It includes clauses specific to condominium properties, such as the review of reserve fund studies and condominium bylaws.
- Form 408 is the waiver of conditions. If the realtor fails to provide this form by the time stipulated in the agreement, . If this happens, there is no way for lawyers to revive the previous deal.
Some buyers and sellers choose to have a lawyer draft a private sale agreement in Nova Scotia instead of using NSREC forms. This approach is common in private sales where no REALTOR® is involved.
Essential Clauses Every Nova Scotia APS Contains
Every real estate purchase agreement in Nova Scotia includes certain legal elements that make the contract valid and enforceable. These elements are required whether parties use a standard form or a private agreement.
The property identification section shows the legal description and civic address of the real estate. The purchase price states the total amount being paid and how the deposit is structured. The closing date indicates when ownership of the property transfers to the buyer.
Other legal elements included in a purchase and sale form:
- Property details: Legal description, civic address, and Property Identification Number (PID)
- Financial terms: Total purchase price, deposit amount, and payment methods
- Timeline: Closing date and key deadlines for conditions
- Inclusions: Fixtures and chattels that convey with the property
The agreement also includes representation and warranty clauses where the seller makes promises about the property's condition. An entire agreement clause states that the written contract is the only agreement between the parties, which replaces any previous verbal discussions.
Common Buyer and Seller Conditions
Conditions in an Agreement of Purchase and Sale act as protective clauses that allow a buyer or seller to exit the agreement if specific requirements are not met. These conditions have specified time frames and formal procedures for removal.
A financing condition allows the buyer to cancel if they cannot obtain a mortgage by a certain date. This condition usually ranges from 5 to 10 business days after the offer is accepted.
A home inspection condition gives the buyer time to arrange a professional inspection. The buyer can negotiate repairs, a price reduction, or choose to end the agreement if the inspection reveals significant issues.
The sale of buyer's property (SOP) condition makes the purchase dependent on selling the buyer's current home. If the buyer cannot sell their home within the agreed timeframe, they can exit the agreement.
To officially remove a condition, the buyer waiver of conditions form 408 is used. This form confirms that the condition has been satisfied or is being waived. Missing the deadline for waiving a condition can void the agreement.
Step-By-Step Timeline From Offer to Closing
The real estate closing in Nova Scotia process follows a set order of steps from initial offer through ownership transfer.
First, a realtor or lawyer prepares the Agreement of Purchase and Sale, which sets out the terms the buyer is offering. The offer is then delivered to the seller for review.
The seller can accept, reject, or make a counteroffer. This stage may involve several rounds of negotiation until both parties agree on all terms. Once both parties sign the final version, the agreement becomes legally binding.
Next, buyers and sellers work to satisfy any conditions in the agreement, such as obtaining financing or arranging inspections. Parties use Form 408 to confirm conditions have been met.
A lawyer examines the property's title in the land registry to confirm ownership and check for any liens or restrictions. As the closing date approaches, both parties sign the required transfer documents. On closing day, funds are transferred and keys are handed over.
Title Search and Migration Requirements
A lawyer plays a key role in confirming that the person selling a property is its true owner. Nova Scotia uses a land registration system to keep records of property ownership.
A title search reviews public records to confirm who technically owns the property and checks for any legal claims, such as unpaid taxes or liens. After the title search, the lawyer certifies that the seller is the legal owner.
Some properties were registered under an older deed system and require title migration to the current land registration system when sold. The responsibility for paying migration costs is usually decided in the Agreement of Purchase and Sale.
Property taxes and utility charges are divided between buyer and seller based on the closing date. An adjustment statement shows who pays what portion of each cost. Once the transaction completes, a new deed showing the buyer as owner is registered with the land registry office.
Costs and Taxes to Budget For
The purchase price is only one of several costs in a Nova Scotia real estate transaction. Both buyers and sellers have additional expenses beyond the property's price.
Buyers typically pay for the legal fees associated with title searches and mortgage paperwork, while sellers pay for deed preparation through their lawyer. The deed transfer tax applies when property ownership changes, with buyers paying this tax based on the purchase price.
Properties require migration fees if moving from the old deed system to the current land registration system. Registration fees also apply when transferring the deed to the new owner. The seller is responsible for covering the cost of a migration if it is required.
- Buyer costs: Home inspection fees, appraisal costs, legal fees, deed transfer tax
- Seller costs: Legal fees for deed preparation, migration (if applicable), real estate commissions (if applicable)
- Shared costs: Property tax adjustments, utility adjustments
Special Schedules For Different Property Types
Some real estate transactions require extra forms or special clauses depending on the property type.
For instance, condominium purchases use Form 402 as a required schedule. This schedule includes information about the condominium corporation's reserve fund and requires review of the building's bylaws and financial statements.
New construction purchases use Form 403, which includes warranty protection and construction completion timelines. The agreement outlines the procedures for handling delays and change orders, as well as upgrades.
Vacant land purchases involve Form 404, which addresses environmental assessments, the availability of municipal services, and legal access to roads. The schedule covers building permits and zoning approvals required for future development.
How Private Sales Differ From REALTOR® Transactions
A private purchase and sale agreement in Nova Scotia happens when a buyer purchases directly from the seller without using a REALTOR® or MLS listing. This process shifts responsibilities from real estate professionals to the parties involved.
In private sales, lawyers usually prepare the Agreement of Purchase and Sale rather than using standard NSREC forms. These agreements can be tailored to specific needs but may lack standardized protections.
The deposit is typically held in trust by a lawyer rather than a brokerage's trust account. Buyers and sellers negotiate directly without an agent as an intermediary, which makes each party responsible for communicating their terms and concerns.
Property disclosure becomes the seller's responsibility, although completing a Property Disclosure Statement is not mandatory unless agreed upon in the contract.
Why a Lawyer's Review Matters
Agreements of purchase and sale are legal contracts that contain technical language and have long-term consequences. Each clause affects the rights and obligations of both parties.
Lawyers can identify clauses that may favour one party more than typical, such as unusual payment terms or repair requirements. They can also spot hidden obligations, such as the buyer being asked to assume existing contracts or settle liens.
Standard forms cover most situations, but unique circumstances may require modifications. Lawyers can add protective clauses or customize terms for delayed closings or specific improvements the property needs.
The purchase process involves coordinating with banks and the Nova Scotia Land Registry. Lawyers assist with this process as well, and will confirm the agreement's terms align with the lender's requirements, as well as ensure the ownership transfer is properly recorded.
Move Forward With Confidence With LM Legal Solutions
LM Legal Solutions provides legal services for all aspects of real estate transactions throughout Nova Scotia. We have experience with residential homes, condominiums, new builds, and vacant land purchases.
Our team focuses on clear communication and considers each client's unique circumstances. Located in downtown Dartmouth, we serve clients throughout the Halifax Regional Municipality and the province of Nova Scotia.
A legal consultation can address your questions about agreements of purchase and sale or the closing process. Book a consultation with one of our lawyers.
FAQs About Agreements Of Purchase And Sale In Nova Scotia
Does an agreement of purchase and sale need to be notarized in Nova Scotia?
No, notarization is not required for an agreement of purchase and sale to be legally binding in Nova Scotia. The contract only requires both parties to sign it in writing to be enforceable under provincial law.
Who drafts the agreement of purchase and sale in a private sale without realtors?
In private sales, a lawyer for either the buyer or seller typically drafts the agreement. Engaging a lawyer during this process helps ensure the contract contains necessary legal terms to protect both parties' interests.
Are electronic signatures valid on Nova Scotia real estate purchase agreements?
Electronic signatures are generally accepted on real estate agreements so long as both parties agree to sign electronically. However, lenders or registry offices may still require original handwritten signatures for certain documents.
