A Canadian Agreement for Sale (sometimes called a vendor take-back or land contract) is a real property transaction in which the vendor (seller) agrees to sell and the purchaser (buyer) agrees to buy real property, but the vendor retains legal title registered under the provincial Land Titles Act until the purchase price is paid in full through instalment payments. The purchaser takes physical possession of the property, gains equitable interest, and assumes responsibility for maintenance, property taxes, and insurance, while making regular payments to the vendor over an agreed period.

This arrangement is fundamentally different from a conventional real estate purchase where the buyer obtains mortgage financing from a bank, the purchase price is paid in full at closing, and title transfers immediately. In an Agreement for Sale, the vendor effectively acts as the lender, financing the purchase directly and retaining title as security until the debt is satisfied.

Agreements for Sale are most commonly used in Alberta, where they have a long history and are well-supported by the Land Titles Act (R.S.A. 2000, c. L-4). In Alberta, the purchaser can register a caveat against the certificate of title to protect their equitable interest, which prevents the vendor from selling or encumbering the property without the purchaser's knowledge. The Law of Property Act (R.S.A. 2000, c. L-7) establishes specific procedures for termination of agreements for sale, including mandatory notice periods.

The Interest Act (R.S.C. 1985, c. I-15) applies to all agreements for sale that charge interest on the outstanding balance. Section 6 of the Interest Act requires that the rate of interest be expressed per annum or per fraction of a year; failure to comply may limit the recoverable interest to 5% per annum. The Criminal Code (R.S.C. 1985, c. C-46, s. 347) sets the criminal rate of interest at an effective annual rate exceeding 60%, which also applies to agreements for sale.

In British Columbia, the Property Law Act (R.S.B.C. 1996, c. 377) and the Land Title Act (R.S.B.C. 1996, c. 250) govern agreements for sale, which can be registered against the title to provide notice to third parties. Saskatchewan's Land Titles Act, 2000 (S.S. 2000, c. L-5.1) and Manitoba's Real Property Act (C.C.S.M., c. R30) similarly recognize and regulate these transactions.

An Agreement for Sale is needed when a purchaser cannot qualify for traditional mortgage financing from a bank or credit union but can demonstrate the ability to make regular instalment payments. This is common for purchasers with limited credit history, recent immigrants who have not yet established Canadian credit, self-employed individuals whose income is difficult to document, or purchasers who have experienced a prior bankruptcy or consumer proposal under the Bankruptcy and Insolvency Act.

Vendors who want to sell a property but cannot find a buyer with conventional financing may offer vendor financing through an Agreement for Sale. This is particularly common in rural areas, farmland sales, and properties that do not meet conventional lending criteria due to condition, location, or property type.

Investors and developers use Agreements for Sale to structure transactions where immediate title transfer is not practical or desired, such as when the property requires remediation, zoning changes, or subdivision approvals before the purchaser wants to take full ownership.

Estate planning situations may involve Agreements for Sale where a family member purchases property from the estate over time rather than requiring immediate full payment. Agricultural land transitions from one generation to the next frequently use this structure.

Commercial property transactions where the buyer needs time to secure permanent financing or complete due diligence may also use an Agreement for Sale as an interim arrangement, with title transferring upon completion of the buyer's financing conditions.

Property Description -- The complete legal description of the property as it appears on the Certificate of Title, including the lot, plan, block, land title district, and any registered encumbrances. The municipal address, property type, and a description of included buildings, fixtures, and improvements.

Purchase Price and Down Payment -- The total purchase price in Canadian dollars, the down payment amount and deadline for payment, and the balance to be financed through instalment payments. The down payment provides the vendor with initial security and reduces the purchaser's outstanding obligation.

Instalment Payment Schedule -- The amount of each instalment payment, the payment frequency (typically monthly), the start date, the payment method (Interac e-Transfer, certified cheque, bank draft, pre-authorized debit), and the date by which the full purchase price must be paid.

Interest Rate -- If interest is charged on the outstanding balance, the annual rate must be clearly stated per annum as required by the Interest Act (R.S.C. 1985, c. I-15, s. 6). Specify whether interest is simple or compound, and the compounding frequency.

Title Retention and Transfer -- A clear statement that the vendor retains legal title under the applicable Land Titles Act until full payment. The vendor's obligation to deliver a transfer of land in registrable form upon receipt of the final payment. The vendor's covenant not to encumber the property during the term.

Possession Date -- When the purchaser takes physical possession and assumes responsibility for care, maintenance, and repair of the property.

Property Taxes -- Which party is responsible for property taxes, local improvement charges, and special assessments during the instalment period. Include a provision for prorating taxes as of the possession date or effective date.

Insurance -- The purchaser's obligation to maintain property insurance covering the full replacement value, naming both the vendor and purchaser as insured parties.

Default and Remedies -- The grace period for missed payments, the notice requirements for declaring a default, and the vendor's remedies upon default (acceleration of the balance, termination and retention of payments, re-entry and possession). Reference the applicable provincial legislation, such as Alberta's Law of Property Act.

Governing Law -- The province whose Land Titles Act, law of property legislation, and Interest Act provisions govern the agreement, and the courts with jurisdiction.