Agreement of Purchase and Sale – Inclusions/Exclusions

September 29, 2011

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A standard residential agreement of purchase and sale in the Province of Ontario includes a section that details the items in addition to the real property that are to be included in the offer, and others that are excluded from the agreement. The listing agreement will detail the items that the seller is willing to leave with the home and can include items such as a washer, dryer, fridge, stove, etc and essentially, these items can be considered as part of the total package of an agreement (freebies if you will).

Some items, such as those previously mentioned can be easily removed from the property and are often referred to as a “chattel“. Other items, which are usually considered to be more permanently fixed to the property are referred to as “fixtures”. Although this seems like a fairly cut and dry distinction, in the real world practice of negotiating offers, the lines can become blurred, especially when the buyer and/or seller make assumptions about whether an item is staying with the home, or going with the seller when they vacate. There is still great debate about what constitutes a fixture and when one can assume that an item such as a mirror, or window covering is staying with a house. We all know what happens as a result of ‘assuming’ and when it comes to real estate transactions; one can never be too sure.

Here’s the solution to avoid unnecessary arguments, closing delays, and even being sued!:

Along with your agent, compile a list of all of the items you could like to see stay with the home as part of the agreement (or take with you as the seller), and be as specific as possible – it is not overkill to be taking down brand names, model, serial number, color, etc of items that you would like and the more thorough you are, the less room you leave for discrepancy. Never, and I mean never make an assumption about whether something is coming or going, and when in doubt, include the item in the relevant inclusions or exclusions field (I.E – all window coverings, all light fixtures, carpet where laid, etc). It’s also worth pointing out that both of these fields in the offer can be used as a form of negotiation, for instance: if the seller does not include a lawn tractor in the listing agreement, but you would like to ask for it as part of the purchase, having your agent insert the tractor in the inclusions field is saying ‘here’s my offer and I also want your tractor as part of the deal’ (obviously, the seller has to agree).

I cannot stress the importance of being thorough and explicit with inclusions and exclusions in an agreement, clarity of all the terms is the only way to see to it that everyone wins. If you want to hear some funny anecdotal stories, ask any real estate agent or real estate lawyer, about a time when a purchase or sale didn’t close as a result of an argument over a master bedroom mirror, or a microwave! It happens all the time.

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About Brendan

Brendan Clemmens of Royal LePage First Contact Realty is a residential real estate agent in Barrie that provides value added service to all of his clients. Brendan can help you with all of your real estate needs but has a specific focus on helpin g young families and investors.

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