OREA Form 500 – Agreement of Purchase and Sale (Commercial)

Jurisdiction: Canada | Province or State: Ontario

What is a OREA Form 500 – Agreement of Purchase and Sale (Commercial)?

OREA Form 500 is the standard contract for buying or selling commercial real estate in Ontario. It records the deal between a buyer and a seller. It sets out the price, deposit, timelines, conditions, and closing details. It also allocates risk and obligations before closing. When both sides sign, it becomes the binding agreement for the transaction.

You use this form when the deal includes commercial real property. That can include land, buildings, mixed-use properties, industrial units, or retail plazas. The focus is the real estate itself. If you want to buy a business without the land, this is not the right form. If you are buying shares in a company, this form does not apply.

Who typically uses this form?

Buyers and sellers of commercial property. Real estate brokerages use it to prepare and negotiate offers. Lawyers use it to review terms, handle title issues, and close. Lenders often request a signed copy for credit approval. Asset managers and corporate signatories use it to approve transactions.

Why would you need this form?

You need a clear, enforceable contract. Form 500 gives you a tested structure that covers key issues. It includes standard protections and industry terms. It helps you manage due diligence while keeping the deal on track. It also integrates with common schedules and conditions used in commercial deals.

Typical usage scenarios include:

• You are buying a small retail plaza with tenants. You need rent rolls, estoppels, and lease assignments. You set a due diligence period to review leases and income.
• You are purchasing industrial land for development. You include environmental and zoning conditions. You set a long requisition date to run searches and studies.
• You are moving your business into an owner-occupied building. You add a financing condition and an appraisal condition. You ask for early access for measurements and planning.
• You are selling a mixed-use property with residential units above retail. You attach a schedule with income statements and warranties. You request “as is, where is” terms with limited seller reps.
• You are acquiring a condominium commercial unit. You include a status certificate review. You ask for confirmation of reserve fund and special assessments.

The form is modular. You tailor it through schedules. You can expand or limit warranties. You can add or remove conditions. You can set deposits in stages. You can address complex items like HST, environmental matters, and tenant rights.

When Would You Use a OREA Form 500 – Agreement of Purchase and Sale (Commercial)?

Use this form whenever you agree to buy or sell commercial real property in Ontario. It fits deals for office, retail, industrial, hotel, institutional, and development lands. It also fits mixed-use properties where the real estate is the core asset.

You might be a business owner buying a building for operations. The form lets you include a financing condition and inspections. You may need a short closing and early access. You can capture both in the offer.

You might be an investor buying income property. You need lease documents, estoppel certificates, and arrears reports. You also need clear rules for rent and tax adjustments. The standard form supports these through schedules.

You might be a developer purchasing assembly lots. You need long due diligence for zoning, planning, and environmental reviews. You add conditions for site plan approval or severance. You also include extended completion terms.

You might be a seller disposing of a non-core asset. You want certainty and a firm closing. You prefer a larger initial deposit and “as is” terms. You use the form’s structure to lock down timelines and limit exposure.

You might be a lender requiring a formal APS before issuing a commitment. You need clarity on the purchase price, HST, and deposit. You also need confirmation of the closing date and conditions.

Use the form for both listed and private deals. Use it whether you have an agent or not. It accommodates electronic signatures and email delivery. It works for corporate parties, partnerships, estates, and trustees. It also supports assignments if negotiated.

Legal Characteristics of the OREA Form 500 – Agreement of Purchase and Sale (Commercial)

This agreement is legally binding once accepted and signed. Contracts for land must be in writing and signed by the party to be bound. The form meets that requirement. Electronic signatures are valid in Ontario. Delivery by email is also standard.

Enforceability depends on clear terms. The form sets out the parties, property, price, and closing date. It provides a deposit as consideration. It has a “time is of the essence” clause. That clause makes deadlines strict. Missing a deadline can end rights or trigger defaults.

The deposit is normally paid to the listing brokerage in trust. Trust handling protects both sides. If a condition fails and the deal dies, the deposit should return to the buyer. If the buyer defaults after conditions are waived, the seller may claim the deposit. The contract terms govern deposit disputes.

The form contains title and closing clauses. The seller must deliver good title, subject only to permitted encumbrances. The buyer gets time to search title and make requisitions. The form sets a requisition date. Your lawyer must raise issues by that date. Title insurance is common, but not mandatory. The form supports either path.

Tax clauses matter. Commercial property is often subject to HST. You must select whether HST is included in or in addition to the price. If it is in addition, you need extra cash at closing. Some buyers self-assess HST if registered. Build the right HST language into your schedules.

The form addresses risk. The seller bears risk of loss until closing. If material damage occurs, the buyer can terminate or seek an abatement. Access clauses allow inspections during conditions. Insurance remains with the seller until transfer.

The agreement includes planning and compliance clauses. The deal must comply with the Planning Act. If compliance fails, the transaction cannot close. The seller makes a residency representation for tax clearance. If the seller is a non-resident of Canada, withholding may apply. The form requires certificates or holdbacks to manage that risk.

Conditions control deal certainty. Conditions are usually for financing, due diligence, environmental, zoning, or approvals. Conditions must be waived or fulfilled in writing by a set time. If not, the deal ends and the deposit returns. You cannot assume a verbal extension will protect you. Put any extensions in writing and sign.

Commercial deals often include “as is, where is” terms. Those shift risk to the buyer. If you accept “as is,” you rely on your due diligence, not seller promises. If you want comfort, ask for specific representations. You can make them survive closing for a set period.

The agreement supports schedules and amendments. You attach schedules for conditions, representations, and closing documents. You can amend the deal later by a written amendment signed by both parties. Use waivers and notices in writing. Follow the notice clause for delivery and timing.

Remedies are available for breach. A party can seek damages for loss. A buyer can seek specific performance for unique property. The strength of your remedy depends on the clarity of the contract and your performance.

How to Fill Out a OREA Form 500 – Agreement of Purchase and Sale (Commercial)

Follow these steps to complete the form accurately and protect your position.

1) Confirm the transaction type

• Use this form for commercial real estate. If the deal is only business assets, use a different agreement.
• Confirm the latest version of the form. Use consistent versions across all schedules.

2) Identify the parties

• Use full legal names. For corporations, include “Inc.” or “Ltd.” exactly as registered.
• Add the capacity if acting as trustee or partner. Avoid “and/or assigns” unless negotiated.
• Include addresses for notice. Add email addresses for electronic delivery.
• Confirm signing authority for corporations. Plan to provide a corporate resolution if requested.

Example: “1234567 Ontario Inc.” as Buyer and “ABC Plaza Inc.” as Seller.

3) Describe the property

• Insert the municipal address and short legal description.
• Add the PIN(s) and legal description in a schedule if long.
• For condominium units, include level, unit, and corporation number.
• If you are buying part of a property, describe the part clearly and add a survey exhibit.

Example: “Part of Lot X, Plan Y, City of Toronto, PIN 12345-6789 (LT).”

4) State the purchase price and deposit

• Enter the total price in numbers and words.
• Set a meaningful deposit. Commercial deals often use 5% to 10%.
• Decide timing: on acceptance, within 24 hours, or by a set date.
• Name the deposit holder, usually the listing brokerage, in trust.
• Consider an additional deposit on condition waiver. State the amount and due date.

Example: “$250,000 on acceptance, plus $250,000 upon waiver of conditions.”

5) Choose the HST treatment

• Select “HST included in” or “HST in addition to” the purchase price.
• If you check “in addition to,” the buyer must bring extra funds at closing.
• If the buyer is HST registered and self-assessing, add that language in a schedule.
• If any portion may be exempt, identify it and allocate price if needed.

6) List fixtures, chattels, and exclusions

• Name what stays with the property: HVAC, built-in systems, signage, and equipment.
• Exclude any leased equipment: boilers, rooftop units, or alarm systems.
• Clarify trade fixtures owned by tenants. Those do not usually transfer.
• If in doubt, list it. Ambiguity creates disputes.

7) Address tenancies and rental items

• Confirm if the property is vacant or tenanted.
• If tenanted, request a rent roll, copies of leases, and arrears statements.
• Require estoppel certificates before waiver or closing.
• Provide for assignment of leases and transfer of deposits and last month’s rent.
• Identify any rental contracts (waste bins, telecom, water heaters). Decide to assume or require seller to buy out.

8) Set the completion date and possession

• Choose a realistic closing date. Allow time for due diligence and lender conditions.
• State possession on closing, subject to tenancies.
• If you need early access for measurement or environmental testing, add that in a schedule with insurance terms.

9) Set irrevocability and acceptance

• Choose a date and exact time the offer is open for acceptance.
• Use local time for the property’s location.
• Short irrevocable periods reduce shopping risk. Longer periods may be needed for corporate approval.

10) Choose the requisition (title search) date

• Give your lawyer time to search title and off-title matters.
• Set the requisition date well before closing. Build in time for responses.
• State that objections raised by the requisition date must be satisfied by the seller on or before closing.

11) Add buyer conditions

• Financing: conditional on satisfactory financing by a set date.
• Due diligence: conditional on review of leases, financials, estoppels, service contracts, and property condition.
• Environmental: conditional on Phase I ESA and any follow-up. Include rights to conduct testing and obtain reliance letters.
• Zoning and use: conditional on confirmation of permitted use and compliance.
• Appraisal: conditional on an appraisal at or above the price.
• Corporate approvals: conditional on board or investment committee approval, if needed.
• Draft conditions with clear timelines and methods of waiver. Require access and document delivery within a set number of days.

Example: “This offer is conditional upon the Buyer’s due diligence, in the Buyer’s sole discretion, within 30 days.”

12) Consider seller conditions

• Seller often requires board approval or release from a mortgage discharge penalty.
• If the seller needs time to arrange consents, set a short, firm period.

13) Representations and warranties

• Ask for specific, factual statements. Examples:
• No written notices of violation outstanding.
• No litigation affecting title.
• Leases are true and complete. No rent free periods or undisclosed inducements.
• All services and equipment included are in working order on closing.
• No hazardous substances released, except as disclosed.
• Decide which survive closing and for how long. Six to twenty-four months is common. Tie survival to a claim cap if negotiated.

14) Title, permitted encumbrances, and surveys

• State that title will be free of all encumbrances, except permitted ones.
• List permitted encumbrances: existing easements, restrictive covenants, and utility agreements that do not materially affect use.
• Decide if the seller must provide a survey. Many buyers rely on title insurance. If a survey matters, ask for it or commission one during conditions.

15) Planning Act, compliance, and municipal matters

• Keep the Planning Act clause. It must be satisfied to close.
• Add clauses for compliance with building, fire, and zoning orders.
• Require tax clearance for arrears and local improvements.

16) HST, income tax, and non-resident matters

• Confirm HST treatment as noted above.
• Include a clause that the seller is or is not a non-resident of Canada.
• If non-resident, provide for holdback or a compliance certificate on closing.

17) Adjustments and apportionments

• Specify adjustments as of 12:01 a.m. on the closing date.
• Adjust realty taxes, local improvements, utilities, rents, TMI, and prepaid contracts.
• For tenants, adjust rent and recoverables to the day before closing. Transfer deposits.

18) Insurance and risk

• State that the seller bears risk until closing.
• If substantial damage occurs, the buyer can terminate or take insurance proceeds with an abatement. Define “substantial” or tie it to a dollar threshold.

19) Access, confidentiality, and “as is” language

• Grant access during due diligence with reasonable notice.
• Include confidentiality if sensitive financials will be shared.
• If the seller requires “as is, where is,” make sure your due diligence condition is broad.

20) Assignment and nominees

• If you may assign the agreement, add a clause allowing assignment to an affiliate or nominee on notice. State whether assignment releases you or not.
• If the seller will not allow assignment, say so clearly.

21) Closing documents and deliveries

• List what the seller must deliver: transfer/deed, statement of adjustments, keys, codes, lease assignments, tenant notices, estoppels, HST certificates, non-resident certificate if needed, and discharges.
• List what the buyer must deliver: funds, statements, HST undertakings, and assumption agreements.

22) Notices, email, and electronic signatures

• Fill in the notice coordinates for parties and lawyers.
• Confirm that email delivery is acceptable. State the time-of-day rule for deemed receipt.
• Use electronic signatures if expedient. Keep a complete, executed copy.

23) Schedules

• Label schedules clearly: Schedule “A” for conditions and process, Schedule “B” for seller standard terms, Schedule “C” for rent roll, equipment lists, or plans.
• Reference every schedule in the body of the form. Initial each page.

24) Review and proof

• Check names, numbers, and dates carefully.
• Confirm the HST box aligns with schedule language.
• Confirm deposit amounts and due dates match.
• Confirm the requisition date gives enough time.
• Verify that survival periods and caps are clear.

25) Sign, deliver, and track deadlines

• Have all parties sign. Use proper authority for corporations.
• Deliver the offer before the irrevocable time.
• If accepted, deliver the deposit on time. Get a trust receipt.
• Calendar all condition dates, the requisition date, and closing.

26) Manage conditions and waivers

• Use written notices to waive or fulfill conditions. Send before the deadline.
• If you need more time, sign an amendment extending the deadline. Do not rely on verbal agreements.

27) Prepare for closing

• Your lawyer orders title insurance or resolves requisitions.
• Collect closing documents listed in the schedules.
• Coordinate estoppels and tenant notices.
• Confirm final adjustments and wire instructions.
• Arrange keys, access cards, and codes for possession.

Real-world examples:

You are buying a tenanted industrial building. You set a 30-day due diligence period. The seller must deliver leases, rent roll, tax bills, utility bills, environmental reports, and any work orders within five days of acceptance. You schedule Phase I testing in week one. You receive estoppels in week two. Your lender issues a commitment in week three. You waive conditions on day 28 and pay an additional deposit. You set the requisition date ten days before closing. Your lawyer raises a minor easement issue, which is acceptable as a permitted encumbrance. You close on time with clear instructions on rent adjustments and transfer of deposits.

You are the seller of a mixed-use building. You want limited exposure after closing. You provide “as is, where is” terms. You still give targeted representations on leases, taxes, and authority. You cap survival at 12 months and cap claims at 2% of the price. You push for a larger initial deposit and a short conditional period. The form and schedules capture all of this in simple, enforceable language.

If you follow these steps, you can complete Form 500 with confidence. You protect your timeline, your money, and your closing. You also reduce disputes by writing terms that are clear, complete, and practical.

Legal Terms You Might Encounter

• Agreement of Purchase and Sale (APS). This is the contract you sign to buy or sell the property. In this form, it records the price, deposit, conditions, and closing details. Everything else, like schedules and amendments, attaches to this APS. Once signed and accepted, it becomes binding.
• Irrevocable. This is the deadline for acceptance. You set a date and time when your offer stays open. If the other side accepts before that moment, you have a deal. If they miss it, your offer dies.
• Deposit. This is the money you pay to show good faith. The form states how much, when due, and who holds it in trust. It also sets rules for interest and release. The deposit counts toward the price on closing.
• Conditions. Conditions let you back out if certain things do not meet your needs. Common ones cover financing, due diligence, and environmental review. The form specifies how you waive or fulfill them. You must deliver written notice by the deadline.
• Schedules. Schedules add or change terms without cluttering the main pages. You often see Schedule A for custom clauses, like access rights and due diligence. Use schedules for detailed lists, such as chattels, leases, or service contracts. The form lets you attach as many as you need.
• Chattels and Fixtures. Fixtures are attached and stay with the property. Chattels are movable and only stay if listed. The form includes space to include or exclude items. Be specific to avoid disputes at closing.
• HST. The form asks if HST is included in the price or extra. Your choice affects the cash you pay on closing. It also sets who remits the tax. Confirm registrations and exemptions in writing.
• Title and Requisition Date. Title means legal ownership free of unacceptable issues. The form sets a requisition date, which is your deadline to raise title problems. You can ask the seller to fix issues before closing. If the seller cannot, the form explains your options.
• Environmental Matters. Many commercial buyers review past use and current conditions. The form lets you set conditions for environmental reports. You can ask for access to test or review existing reports. Tie your rights and deadlines to your condition clauses.
• Representations and Warranties. These are statements of fact that the other side promises are true. In commercial deals, they may cover leases, taxes, liens, and compliance. The form allows you to add these in a schedule. If they are untrue, you can seek remedies defined in the form.
• Closing Date. This is the date you exchange money for title. The form sets that date and the time for completion. It also covers risk of loss before closing and adjustments. Plan your conditions and searches backward from this date.

FAQs

Do you need a lawyer to complete this form?

You can fill it yourself, but you should involve a lawyer. Commercial deals have complex risks. A lawyer can tailor schedules and protect you on title, tax, and leases. You also need a lawyer to complete closing steps.

Do you include HST in the purchase price on this form?

You choose. The form has a checkbox to say if HST is included or in addition to the price. Mark it clearly and match your choice in the schedules. Confirm who remits and how credits apply.

Do you need a deposit with your offer?

Yes, most sellers expect a deposit. The form states the amount, timing, and who holds it in trust. Submit it by the deadline. Late deposits can kill your offer or breach the deal.

Do you add due diligence and access rights?

Yes, build them into a schedule. Give yourself time to inspect, review leases, and confirm zoning. Spell out access, notice, and cooperation. Tie your condition dates to your due diligence plan.

Do you cover leases and tenant matters in this form?

Yes, you should. Attach rent rolls, lease lists, and estoppel requirements. Set deadlines for delivery and review. Add adjustments for deposits, prepaid rent, and arrears.

Do you need a financing condition?

You likely do unless you have cash and are confident. Commercial financing can take time and requires documents. The form lets you set a condition period and notice for waiver or fulfillment. Do not miss the deadline.

Do you need an environmental condition?

It is wise in many commercial deals. Ask for access and time to complete reports. Define the standard of review and who fixes issues. State what happens if results are unsatisfactory.

Do you use this form for land or mixed-use properties?

Yes, the commercial version works for a range of asset types. Adapt schedules for the asset’s features. For mixed-use, add clauses for residential tenancy, if relevant. Always fit the schedules to the property.

Checklist: Before, During, and After the OREA Form 500 – Agreement of Purchase and Sale (Commercial)

Before signing

• Legal property description, PIN, and municipal address.
• Latest survey or reference plan, if any.
• Current title search or parcel register.
• Zoning details and permitted uses.
• Environmental reports and records.
• Building permits, fire and safety orders, and inspections.
• Utility and tax bills, and any arrears statements.
• Rent roll, leases, amendments, and renewal options.
• Security deposits, prepaid rent, and arrears summary.
• Service contracts, equipment leases, and warranties.
• List of fixtures and chattels included or excluded.
• Operating statements for the last 24 months, if available.
• Insurance loss runs or claims history, if available.
• Corporate documents for signing authority.
• Identification for the signing parties.
• HST registration details and tax status confirmations.
• Non-residency status of the seller for tax purposes.
• Financing pre-approval and lender information.
• Timeline for due diligence, including reports and inspections.

During signing

• Parties’ legal names and signing capacity.
• Property description matches title records.
• Purchase price and deposit terms match your intent.
• HST checkbox and wording reflect your tax plan.
• Closing date, completion times, and possession details.
• Irrevocable date/time and time zone.
• Chattels included and fixtures excluded are clear.
• Risk and insurance clauses before closing.
• Conditions for financing, due diligence, and environmental.
• Access rights, notice periods, and cooperation duties.
• Title search and requisition dates align with your plan.
• Adjustments for taxes, utilities, rents, and deposits.
• Tenant schedules, rent roll, and estoppel requirements.
• Required deliverables at closing, with deadlines.
• Brokerage and deposit-holding details are complete.
• Applicable schedules are attached and referenced.
• Cross-check numbering and internal references.
• Strikeouts are initialled by all signing parties.
• All pages are initialled and signature blocks completed.

After signing

• Deliver the signed offer as directed in the form.
• Pay the deposit to the named brokerage in trust on time.
• Calendar the irrevocable and all condition deadlines.
• Calendar the title search and requisition dates.
• Share a complete copy with your lawyer and lender.
• Send notices of fulfillment, waiver, or termination on time.
• Request and review estoppels and lease packages.
• Order title, tax, utility, and off-title searches.
• Schedule inspections and environmental assessments.
• Confirm insurance coverage effective on closing.
• Coordinate mortgage commitment and funding steps.
• Review statement of adjustments with your lawyer.
• Arrange closing logistics and key transfer.
• Take meter readings and collect codes and access cards.
• Secure and store the final executed APS and schedules.

Common Mistakes to Avoid OREA Form 500 – Agreement of Purchase and Sale (Commercial)

• Not stating how HST applies.
• If you leave HST unclear, you risk a surprise tax bill or shortfall. Choose “included” or “in addition to” and match it in your schedules. Don’t forget to say who remits and how credits apply.
• Vague or wrong property description.
• An incorrect legal description can delay closing or cause disputes. Pull the PIN and confirm the lot and plan. Don’t forget to include easements and appurtenant rights if needed.
• Weak due diligence and access rights.
• If you omit access rules and timelines, the seller may limit your review. That can leave you with gaps on leases, zoning, or building systems. Don’t forget to tie access to your condition periods.
• Ignoring tenant and estoppel details.
• If you skip rent rolls, deposits, and estoppels, you may inherit problems. You could overpay for rent or miss hidden obligations. Don’t forget to set deadlines and a remedy if documents are missing.
• No environmental condition or scope.
• If you do not set an environmental review, you may absorb unknown risks. Remediation can be costly and slow. Don’t forget to define scope, timing, and walk-away rights.

What to Do After Filling Out the Form OREA Form 500 – Agreement of Purchase and Sale (Commercial)

1. Submit your signed offer as directed in the form. Track delivery and time of receipt. Confirm the irrevocable date and time with all parties.
2. If you receive a counteroffer, review the changes line by line. Accept, counter, or let it lapse. Use an amendment if you need to change terms after acceptance.
3. Deliver the deposit on time to the named trust holder. Keep the receipt. Late or missing deposits can end the deal.
4. Start due diligence right away. Book inspections, request lease packages, and order searches. Use your schedules to demand access and documents.
5. Send notices of fulfillment or waiver before deadlines. Use the notice process in the form. Keep proof of delivery.
6. Work with your lender on the appraisal, underwriting, and security. Share the APS, schedules, and due diligence results. Confirm funds and conditions before closing.
7. Coordinate closing documents with your lawyer. Review the statement of adjustments carefully. Confirm tax, rent, utility, and deposit entries.
8. Plan handover. Set meter readings, key exchange, and code transfers. Confirm vacant or tenanted possession as agreed.
9. If the deal ends, address the deposit and releases. Follow the form’s rules for deposit return and mutual release. Close the loop with all parties.
10. Store a complete signed copy of the APS and all schedules. Keep notices, receipts, and search results. You may need them for audits, financing, or resale.