Understanding the Contract of Purchase & Sale

Subjects are conditions written into the contract that must be satisfied before the sale becomes firm. Each subject is for your sole benefit as the buyer, and gives you a defined window to investigate the property before you are fully committed. Common subjects on a detached-home purchase include:

• Financing — subject to arranging a new first mortgage on terms satisfactory to you.
• Property Disclosure Statement — subject to reviewing and approving the seller's disclosure of known issues.
• Inspection — subject to obtaining and approving an independent home inspection.
• Title Search — subject to reviewing the title for charges, easements, covenants or rights-of-way.
• Insurance — subject to obtaining satisfactory fire/property insurance.

Each subject has a date by which it must be removed in writing. If you do not remove (waive) a subject by its deadline, the contract typically collapses and your deposit is returned in accordance with the Real Estate Services Act. Once all subjects are removed, the sale becomes firm and binding.

Under Section 42 of the Property Law Act and the Home Buyer Rescission Period Regulation, a buyer of residential real property has a legal right to rescind (cancel) the Contract of Purchase and Sale — even after it has been accepted.

• The right lasts three (3) business days (excluding Saturdays, Sundays and B.C. statutory holidays) after the Final Acceptance Date.
• This right cannot be waived by either party.
• It applies whether or not your offer has subjects.

A few transactions are exempt from the rescission right — including property on leased land, leasehold interests, sales at auction, sales under court order/supervision, and certain pre-sale (Real Estate Development Marketing Act) contracts.

The deposit shows the seller you are serious and forms part of your purchase price. The contract sets when it is due — commonly within 24 hours of subject removal (or within 24 hours of acceptance), paid by bank draft or wire transfer.

What is a bank draft?

A bank draft is a payment guaranteed by your bank and drawn against the bank's own funds — effectively certified money. Because it clears reliably, it (along with a wire transfer) is the standard way to deliver a real estate deposit. You request it from your bank for the exact deposit amount, made payable to the brokerage's trust account.

Plan ahead: arrange your bank draft a day early so you can meet a tight 24-hour deposit deadline. Wire transfers can also take time to set up — confirm cut-off times with your bank.

The Purchase Price is the total agreed price for the property. Unless you and the seller agree otherwise in writing, the contract states the price includes GST, if GST applies. On a typical resale detached home GST usually does not apply, but it can apply to newly built or substantially renovated homes — so always confirm with your notary/lawyer and accountant before writing your offer.

Your purchase price is normally made up of two parts: your deposit + down payment (your own cash) and your mortgage (financed through your lender). The deposit you pay early is credited toward the price; the remaining cash and the mortgage funds come together at completion (see Section 7).

Included items (fixtures & chattels)

The Purchase Price includes the buildings and all fixtures — things attached to the home such as blinds, awnings, screen doors, curtain rods and tracks, fixed mirrors, fixed carpeting, and electrical, plumbing, heating and air-conditioning fixtures. The contract then lists the specific chattels (movable items) that are included, which commonly are:

fridge(s), stove(s), dishwasher(s), washer & dryer set(s), built-in vacuum and attachments, garage door opener(s) and remote(s), and all blinds and window coverings.

Anything the seller intends to take with them is listed under a “BUT EXCLUDING” line. If a particular item matters to you, make sure it’s written into the contract — verbal promises don’t count.

Taking possession

The Possession Date and time (for example, 9:00 a.m.) are set in the contract, and you receive vacant possession — the home empty and ready for you. The seller generally won’t release the keys until they’ve received the sale proceeds, so possession usually follows shortly after completion.

Adjustments

From the Adjustment Date, you take over the property’s ongoing costs — property taxes, utilities and any local improvement charges. Your notary/lawyer prepares a Statement of Adjustments that fairly splits these between you and the seller. For example, if the seller has prepaid the year’s property taxes, you reimburse them for the portion covering the time after your possession date (and vice versa).

When you buy a strata property (a condo, townhouse or any strata lot), you own your individual unit plus a share of the common property, and you become a member of the strata corporation — governed by the Strata Property Act, an elected strata council, and a set of bylaws and rules. That adds a few things to review and budget for.

Strata fees & the contingency reserve fund

You’ll pay monthly strata fees that cover the building’s shared operating costs plus a contribution to the Contingency Reserve Fund (CRF) — the strata’s savings account for major future repairs. A healthy CRF is a good sign; a thin one can mean special levies down the road. Strata fees are adjusted at completion, so you’ll reimburse the seller for any portion they’ve prepaid (see Section 5).

Reviewing the strata documents (a key subject)

Your offer is made subject to receiving and approving the strata documents — one of the most important conditions in a strata purchase (a subject; see Section 1). On acceptance, the seller authorizes their agent to order these documents at the seller’s expense and deliver them to your agent. You’ll typically review:

• Form B Information Certificate — the strata’s key snapshot: the monthly strata fee, CRF balance, any approved special levies, parking/storage, and amounts the seller owes. It attaches the strata’s rules, current budget, and the developer’s Rental Disclosure Statement (if any).
• The registered strata plan, any amendments, and resolutions dealing with changes to common property.
• The current bylaws and financial statements (and those of any section the lot belongs to).
• The minutes of strata council and general meetings (commonly the past two years) — where you’ll spot building issues, disputes and upcoming projects.
• The Property Disclosure Statement – Strata, and the depreciation report (see below).

The depreciation report

A depreciation report assesses the strata’s major common components (roof, building envelope, elevators, plumbing and more) and forecasts when they’ll need repair or replacement and how those costs will be funded. It’s one of the best tools for gauging your future special-levy risk. As of changes effective July 1, 2024, B.C. strata corporations with five or more lots must obtain a depreciation report every five years and can no longer vote to defer it — with phase-in deadlines of July 1, 2026 for Metro Vancouver and the Capital Regional District, and July 1, 2027 for the rest of B.C.

Bylaws & rules

Strata bylaws and rules govern day-to-day living — pets, rentals, age restrictions, renovations, noise, parking and more. Make sure they fit how you plan to use the home. The seller must notify you before completion of any proposed resolution to amend the bylaws or rules that they hadn’t already disclosed.

Special levies

A special levy is a one-time charge owners approve to fund a big project the CRF can’t cover (a new roof, building-envelope remediation, etc.). In this contract, if a special levy is approved before the completion date, the seller credits you for the portion you’d be obligated to pay under the Strata Property Act — your notary/lawyer holds that amount back from the sale proceeds and remits it to the strata corporation.

Strata insurance

The strata corporation insures the building and common property, but two things are critical for you as a buyer: the policy carries deductibles that can be very large (which owners can be responsible for), and you’ll still need your own unit, contents and liability policy. Adequate insurance is a mandatory requirement for financing — review the strata’s coverage and deductibles with your mortgage broker/lender before you remove subjects. Your agent can’t advise on the adequacy of insurance, and it’s a fundamental term of the contract that strata insurance be in place at completion.

At completion

Strata conveyancing adds one more step: your notary/lawyer obtains a Form F Certificate of Payment from the strata confirming the seller owes nothing to the corporation — it’s required to register the transfer. Watch for any move-in fees the strata charges, too. Everything else — deposit, completion, Land Title transfer, Property Transfer Tax and closing costs — works the same as the other sections, and the PTT exemptions for first-time buyers and newly built homes apply to condos and townhouses just as they do to houses.

Once your offer is firm, the file moves to your notary or lawyer (your "conveyancer") to complete the transaction. Here is the typical sequence:

1. A few days before completion, your notary/lawyer contacts you with the exact amount of money to bring in ("cash to close"). You sign the transfer and mortgage documents at their office.
2. You pay your remaining balance to the notary in trust — this is the portion of the purchase price not covered by your mortgage (your down payment less the deposit already paid) plus Property Transfer Tax, legal fees and adjustments. It is paid by bank draft or wire transfer, typically at least two days before the completion date.
3. On (or just before) the completion date your mortgage lender advances the mortgage funds to your notary/lawyer.
4. Your notary/lawyer lodges the transfer and mortgage for registration at the Land Title Office (see Section 8) and then releases the full purchase price to the seller's notary/lawyer.
5. On the possession date, once the seller has received the sale proceeds, you get the keys.

Avoid scheduling completion on a Saturday or Sunday — lenders generally do not fund mortgages and many offices are closed on weekends.

The sale is completed at the Land Title Office (LTO). All documents required to give effect to the contract are prepared in registrable form and lodged for registration by 4:00 p.m. on the completion date.

When the Transfer (Form A) is registered, you become the registered legal owner of the property. At the same time, your lender's mortgage is registered as a charge against the title, and the seller's existing mortgage and any other financial charges are paid out and discharged from title.

Your notary/lawyer also files the Property Transfer Tax Return with the LTO and pays the tax on your behalf out of the funds you provided (see Section 9). Once registration is confirmed, you'll receive a State of Title Certificate showing you as owner.

B.C.'s Property Transfer Tax is paid at completion (through your notary/lawyer) and calculated on the property's fair market value in tiers:

• 1% on the first $200,000
• 2% on the portion from $200,000 to $2,000,000
• 3% on the portion from $2,000,000 to $3,000,000
• + a further 2% on any portion above $3,000,000 (so 5% on that top tier)

Exemptions that may reduce or eliminate your PTT

• First-Time Home Buyers' Exemption — full exemption on the first $500,000 for qualifying buyers when the home's fair market value is $835,000 or less (partial exemption between $835,000 and $860,000).
• Newly Built Home Exemption — full exemption when the fair market value is $1,100,000 or less (partial exemption between $1,100,000 and $1,150,000).

Eligibility rules apply (residency, principal-residence use, property size, etc.). Foreign entities and taxable trustees are not eligible for these exemptions. Use the calculator below for an estimate, and confirm with your notary/lawyer.

Beyond the purchase price and your deposit, the contract sets out the costs each side typically pays. As the buyer, plan to budget for:

• Legal / notary fees — for searching title and drafting your documents.
• Mortgage costs — your lender’s lawyer/notary, an appraisal (if required), and Land Title registration fees.
• Property Transfer Tax — see Section 9 and the calculator below.
• GST — if applicable (typically on new or substantially renovated homes).
• Fire / home insurance premium — effective 12:01 a.m. on completion day.
• Survey certificate — if required by your lender or title insurer.
• Property tax & utility adjustments — your share from the Adjustment Date (see Section 5).

Depending on the property, additional ongoing taxes may also apply — such as the provincial Speculation and Vacancy Tax or a municipal Empty Homes Tax. Your notary/lawyer and accountant can confirm what applies to your purchase.