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Option To Purchase Agreement Template for Canada

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Key Requirements PROMPT example:

Option To Purchase Agreement

"I need an Option to Purchase Agreement for a commercial warehouse property in Ontario, with a 6-month option period starting January 1, 2025, and including specific environmental due diligence provisions due to the property's previous industrial use."

Document background
The Option To Purchase Agreement is a strategic legal instrument commonly used in Canadian real estate and business transactions when a party wishes to secure the right to purchase property without immediate commitment to the purchase. This document is particularly valuable in situations requiring due diligence periods, financing arrangements, or strategic property acquisition timing. It typically includes detailed terms about the option period, purchase price, exercise mechanics, and property specifications. The agreement must comply with Canadian federal and provincial property laws, including requirements for writing under the Statute of Frauds and provincial real estate regulations. It serves as a preliminary step to a full purchase agreement, providing both parties with clearly defined rights and obligations during the option period.
Suggested Sections

1. Parties: Identifies and defines the parties to the agreement - the Option Grantor and Option Holder

2. Background: Outlines the context of the agreement and the parties' intention to enter into an option arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Grant of Option: Explicitly states the grant of the option and its basic terms

5. Option Period: Specifies the duration of the option and any extension provisions

6. Option Price: States the consideration paid for the option itself

7. Purchase Price: Specifies the price at which the property can be purchased if the option is exercised

8. Exercise of Option: Details the procedure for exercising the option

9. Terms of Purchase: Outlines the terms that will govern the purchase if the option is exercised

10. Property Description: Detailed description of the property subject to the option

11. Representations and Warranties: Standard representations and warranties from both parties

12. Covenants: Ongoing obligations of the parties during the option period

13. Default and Remedies: Consequences of default and available remedies

14. General Provisions: Standard contract clauses including governing law, notices, etc.

15. Execution: Signature blocks and execution details

Optional Sections

1. Due Diligence: Include when the option holder requires a due diligence period before exercise

2. Financing Conditions: Include when the option exercise is subject to financing conditions

3. Environmental Matters: Include for properties with potential environmental concerns

4. Assignment Rights: Include when transfer of option rights needs to be addressed

5. Property Management: Include when specific property management obligations during the option period need to be addressed

6. Right of First Refusal: Include when the grantor wishes to sell to a third party during the option period

7. Tenant Rights: Include when the property is subject to existing tenancies

8. Development Rights: Include when the property may be developed during the option period

9. Registration Rights: Include when addressing whether the option can be registered on title

Suggested Schedules

1. Schedule A - Property Description: Detailed legal description of the property and any included fixtures or excluded items

2. Schedule B - Option Exercise Form: Standard form for exercising the option

3. Schedule C - Permitted Encumbrances: List of permitted liens, encumbrances, and other title matters

4. Schedule D - Purchase Agreement Terms: Terms that will govern the purchase if the option is exercised

5. Schedule E - Current Leases: List of existing leases and tenant obligations, if applicable

6. Schedule F - Property Condition Report: Current condition of the property at time of option grant

7. Appendix 1 - Site Plan: Visual representation of the property and its boundaries

8. Appendix 2 - Title Documents: Copies of relevant title documents and searches

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Real Estate

Commercial Property

Residential Property

Industrial Property

Agriculture

Retail

Manufacturing

Mining

Energy

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Technology

Hospitality

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Relevant Teams

Legal

Real Estate

Property Management

Business Development

Corporate Development

Acquisitions

Investment

Finance

Operations

Compliance

Risk Management

Relevant Roles

Real Estate Lawyer

Property Manager

Real Estate Agent

Business Development Manager

Corporate Lawyer

Investment Manager

Property Developer

Asset Manager

Acquisition Manager

Legal Counsel

Contract Administrator

Commercial Director

Chief Financial Officer

Real Estate Investment Director

Property Investment Analyst

Industries









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