What conditions should be included in a purchase agreement?

When preparing a contract for the sale of residential property in Calgary, it is necessary to include a number of mandatory conditions that guarantee the protection of the interests of both parties and the compliance of the agreement with Alberta law. Violation or absence of even one of these conditions may result in the cancellation of the contract, loss of the deposit, or even litigation.

1. Description of the property and identification of the parties

The agreement must contain clear information about:

  • The exact legal address and description (inter-network plan, block, lot) of the property.
  • The names and contact details of the seller and buyer.
  • List of included and excluded property (built-in appliances, furniture, curtains, etc.) with a distinction between “fixed” and “non-fixed” equipment.

This information eliminates any misunderstanding about what exactly becomes the property of the buyer and what remains with the seller.

2. Price, deposit, and terms of transfer of ownership

The contract must specify the agreed purchase price, deposit amount, as well as:

  • the date and time by which the buyer must pay the deposit (usually 1–3 business days after acceptance of the offer);
  • the place and method of deposit storage (escrow with a brokerage company or lawyer);
  • the date of transfer of ownership (Completion/Possession Day) — the specific business day when the seller releases and transfers the property to the buyer.

On the date of transfer of title, the buyer must pay the remaining amount under the contract, and the seller guarantees that the property is “in substantially the same condition” as at the time of signing the contract.

3. Conditions

The most important conditions for the buyer are those that allow them to cancel the agreement without penalty if certain circumstances do not materialize. Mandatory conditions include:

  • Financing Condition — obliges the buyer to obtain final approval of a mortgage loan by a specified Condition Day.
  • Property Inspection Condition — gives the buyer the right to hire a licensed inspector and get a report on the condition of the building and engineering.
  • Sale of Buyer's Property Condition — allows the buyer to release funds from the sale of their current home before purchasing.
  • Additional Conditions — for example, checking the land use plan for the future building, studying zoning or environmental risks.

Each condition has a clearly defined deadline (Condition Date), usually 5–10 business days after acceptance, by which the buyer must submit a written notice of satisfaction or non-satisfaction of the condition.

4. Ensuring a clear title

The seller guarantees that the property is free from any liens, encumbrances, bureaucratic or financial burdens, except those stipulated or agreed upon by the parties.

If the title contains easements, utilities, or road restrictions, a separate agreement on their acceptance by the buyer must be attached to the contract.

5. Review of documentation and additional disclosures

In addition to the agreement, the terms and mechanisms for obtaining and verifying the following must be provided:

  • Real Property Report confirming that the development complies with municipal requirements.
  • Condominium documents (if applicable): association financial statements, reserve fund budget, scheduled meetings.
  • Information about radon testing and other environmental studies in Calgary that may affect health and safety.

If the seller is aware of any “hidden defects” (material latent defects) that are not revealed by a standard inspection, they must disclose them in writing in the contract.

6. Dower Rights

Under Alberta's Dower Act, if only one spouse is named on the title, the other spouse (if married) must sign an agreement or provide a form of consent (Dower Consent and Acknowledgement).

This prevents the sale without the informed consent of both partners.

7. Insurance and risks prior to closing

The contract states that until Completion Day, the property remains insured by the seller — any unforeseen losses (fire, natural disaster) prior to the transfer of rights are not borne by the buyer. At the same time, the buyer undertakes to take out their own insurance against damage from the date of ownership.

8. Legal consequences of non-performance

The last clause of the contract should describe the consequences of breach of any material term:

  • If the buyer does not waive the conditions in time without consent, the contract is canceled and the deposit is returned.
  • If the buyer refuses to fulfill their obligations after waiving the conditions, the deposit is transferred to the seller as compensation.
  • A seller who fails to fulfill the conditions (for example, does not provide registration documents) is obliged to return the deposit and compensate the buyer for losses.

In this case, both parties have the right to apply to the court in accordance with the restrictions provided for by Alberta's Limitations Act.

Conclusion

The strict inclusion of all the above conditions in the contract, their clear and unambiguous wording, as well as compliance with deadlines and procedures for document execution guarantee the security of your investment and reduce the risk of legal disputes when buying a home in Calgary.