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Cancellation Agreement (Real Estate) for Canada

Cancellation Agreement (Real Estate) Template for Canada

This document serves as a formal agreement between parties to cancel an existing real estate purchase and sale agreement in Canada. It provides a comprehensive framework for terminating the original transaction, including provisions for the return of deposits, mutual release of obligations, and specific terms of cancellation. The agreement complies with Canadian federal and provincial real estate laws, ensuring proper documentation of the termination process while protecting both parties' interests through clear terms and conditions. It includes necessary provisions for various scenarios of cancellation and addresses key aspects such as deposit returns, releases, and ongoing obligations.

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What is a Cancellation Agreement (Real Estate)?

The Cancellation Agreement (Real Estate) is a crucial document used in Canadian real estate transactions when parties mutually agree to terminate their original purchase and sale agreement. This document becomes necessary when circumstances prevent the completion of a real estate transaction, whether due to financing issues, inspection results, or other material changes to the parties' circumstances. It serves to formally document the termination of the original agreement, establish terms for the return of deposits, and provide mutual releases to prevent future claims. The agreement must comply with both federal and provincial real estate regulations, including the Real Estate and Business Brokers Act and provincial property laws. It's particularly important in protecting all parties' interests by clearly documenting the cancellation terms and ensuring proper closure of the transaction.

What sections should be included in a Cancellation Agreement (Real Estate)?

1. Parties: Identification of the parties involved - typically the original purchaser and vendor from the purchase agreement being cancelled

2. Background: Details of the original purchase agreement including date, property description, and brief context for the cancellation

3. Definitions: Key terms used in the agreement including 'Original Agreement', 'Property', 'Deposit', and other relevant terms

4. Acknowledgment of Cancellation: Clear statement that both parties agree to cancel the Original Agreement

5. Return of Deposit: Terms and timeline for the return of any deposits paid by the purchaser

6. Mutual Release: Comprehensive release of all claims, demands, and obligations related to the Original Agreement

7. Representations and Warranties: Statements confirming each party's authority to enter into the cancellation agreement and that no third-party rights have been created

8. Governing Law: Specification that the agreement is governed by Canadian law and the applicable province

9. Execution: Signature blocks and execution requirements including witness provisions

What sections are optional to include in a Cancellation Agreement (Real Estate)?

1. Survival: Section specifying which provisions survive the cancellation, used when certain obligations or rights should continue

2. Costs: Allocation of any costs or expenses related to the cancellation, used when there are significant costs to be addressed

3. Confidentiality: Provisions regarding confidentiality of the cancellation terms, used in sensitive or high-profile transactions

4. Further Assurances: Commitment to execute additional documents if needed, used in complex transactions

5. Return of Documents: Provisions for returning any transaction-related documents, used when sensitive materials were exchanged

6. Indemnification: Additional protection against future claims, used in high-risk situations

7. Third Party Rights: Addressing any third-party interests or rights, used when other parties have potential interests in the transaction

What schedules should be included in a Cancellation Agreement (Real Estate)?

1. Schedule A - Property Description: Detailed legal description of the property from the Original Agreement

2. Schedule B - Original Agreement: Copy or key details of the Original Agreement being cancelled

3. Schedule C - Deposit Details: Itemized list of deposits paid and return instructions

4. Appendix 1 - Release Form: Standard form mutual release documentation if required by local real estate board

5. Appendix 2 - Proof of Authority: If needed, documentation proving authority to cancel (e.g., corporate resolution, power of attorney)

Authors

Alex Denne

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

Jurisdiction

Canada

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions

























Clauses


























Relevant Industries

Real Estate

Legal Services

Property Development

Property Management

Banking and Finance

Insurance

Construction

Investment Management

Relevant Teams

Legal

Real Estate

Property Management

Compliance

Risk Management

Operations

Contract Administration

Business Development

Investment

Finance

Relevant Roles

Real Estate Agent

Real Estate Broker

Property Manager

Real Estate Lawyer

Title Officer

Escrow Officer

Mortgage Officer

Real Estate Developer

Legal Counsel

Contract Administrator

Real Estate Investment Manager

Property Development Manager

Compliance Officer

Risk Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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