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Let's talk about deposit deadlines.
When a buyer and seller execute a purchase agreement, there's usually a deposit. In the Standard OREA Agreement of Purchase and Sale, this is the deposit clause:
DEPOSIT: Buyer Submits [HEREWITH/UPON ACCEPTANCE/AS OTHERWISE DESCRIBED IN THIS AGREEMENT], by negotiable cheque payable to [DEPOSIT HOLDER] to be held in trust pending completion or other termination of this Agreement and to be credited toward the Purchase Price on completion. For the purposes of this Agreement, "Upon Acceptance" shall mean that the Buyer is required to deliver the deposit to the Deposit Holder within 24 hours of the acceptance of this Agreement. The parties to this Agreement hereby acknowledge that, unless otherwise provided for in this Agreement, the Deposit Holder shall place the deposit in trust in the Deposit Holder's non-interest bearing Real Estate Trust Account and no interest shall be earned, received or paid on the deposit.
If no changes are made to the standard APS, and the agreement stipulates "Upon Acceptance" (which is the most common one I see), then the Deposit has to be delivered within 24 hours of acceptance.
So let's say the deposit doesn't get delivered in 24 hours. What now? Is the deal dead?
In law, things are never as cut and dry as "deal or no deal" based on a missed deposit.
These agreements need action—performance, to be exact. When a buyer doesn't pay the deposit in the stipulated time, they're not following through on their part. This puts them in breach of the contract.
And when the buyer is in breach of contract - the seller has options.
They can either overlook this and move forward, or they can terminate the contract and seek damages, including the full value of the deposit.
But, contrary to some people's understanding, the agreement is not "null and void" if the deposit is missed.
Think about it... if that was the case, a buyer could simply miss a deposit and render the deal null and void. That would technically give all "upon acceptance" deals a 24 hour "cooling off" period - eliminating the value of a "firm" deal.
So, what's the lesson here? The timing of the deposit matters. If 24 hours is not possible, rely on the "as otherwise described in this agreement" option and clearly indicate the terms and timelines. Missing a deposit deadline does not mean "null and void", it means breach of contract... and with that, damages.
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