If you are about to sign an offer to purchase without having had prior legal review by an attorney or consultant, wait! Don't sign it yet. You may have overlooked the protection clauses for yourself. These clauses are the guarantee that your investment is secure and determine the fair and equitable development of the contract. 

In this blog, we will discuss the danger of signing legally binding documents in Canada without protective clauses included. Want to know how to sign an offer safely? Read with me to the end and find out what is required by law. Let's get started!

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The unprotected offer to purchase

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While it is an achievement to get to the offer on a property, it is also necessary to control your excitement! At this stage, your real estate agent will draw up a document called an Offer to Purchase, which you should read carefully, but not sign immediately because, if you both do, it will become a legally binding contract. 

Many people, out of ignorance or haste, sign purchase offers without giving importance to the protection clauses, thus remaining unprotected by the laws.

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What are the most important protection clauses for buying a home in Canada?

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When signing a purchase offer, it is key to include these protection clauses:

• Financing clause: The purchase is contingent on getting approved for your mortgage. This is important because, if the bank does not approve the loan in time, you can cancel the purchase without losing your deposit.
• Inspection clause: This clause allows an inspector to check the property. If there are serious problems, you can back out of the deal or negotiate repairs or a lower price.
• Sales clause on your current property (if you have one): the purchase of the new home is contingent on selling the current one. This will prevent you from ending up with two houses and unmanageable debt.

Before you sign an offer to purchase, think about what happens if your mortgage loan is denied after you sign, or if an inspection reveals serious structural problems that were not visible to the naked eye? 

Without the proper covenants, you could be forced to proceed with a purchase that you can't afford or that will result in huge future expenses. The most painful consequence is that you could lose your deposit (often thousands of dollars) because you are unable to complete the transaction. 

A real estate agent does not have the legal training to protect you in these scenarios; only a lawyer can. Be strategic in conducting this transaction.

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The lawyer: your legal defense in the purchase of a home

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Although the real estate agent accompanies you in your search for your home, the lawyer protects your rights. These are the key functions that only a lawyer can perform:

• Contract review: here you verify that the offer includes conditions that protect you, such as property inspection, mortgage approval and other security clauses.
• Legal investigation of the property: ensures that there are no debts, liens or hidden problems that may affect you after the purchase.
• Closing of the transaction: coordinates the handling of funds and the legal transfer of the title to your name, complying with all legal requirements.

Hiring a lawyer is not an additional expense: it is an essential investment to avoid complications and secure your future in Canada.

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At Immiland Law, we are ready to be your legal guide in this process. If you would like real estate law advice or are seeking legal representation as an immigrant, do not hesitate to write to us and book your appointment.

I hope this topic will be useful for your real estate transaction. Thanks for reading, see you in the next blog!

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With love,

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Immiland Law Professional Corporation