The Requisition Date: The Ultimate Guide You Need!

Introduction

Definition and Overview of Requisition Date

The Requisition Date is a crucial milestone in real estate transactions, particularly in Ontario and other jurisdictions. These issues may include deficiencies, liens, encumbrances, or any other matters affecting the legal ownership or title of the property. 

In most cases, the Requisition Date is set 5–10 days before the closing date, as outlined in the Agreement of Purchase and Sale. This deadline gives both parties enough leeway to rectify any issues and ensure a smooth progression of the transaction. For example, if a title search reveals easements, outstanding payments, or deficiency notices, the Seller must take due care to resolve these matters before the final day. Real estate lawyers and realtors play a significant role in examining the public records, conducting Off-Title Searches, and ensuring that all legal obligations are met.

It is the point where Buyers, Brokers, and estate practitioners work together to clarify any problems and confirm that the property is free of liabilities. For instance, if the Vendor has failed to address municipal surveys, security interests, or legal constraints. This process also involves delivering any Notices or worded clauses to ensure that the transaction is finalized without litigation or calamity. By understanding the intricacies of the Requisition Date, both Buyers and Sellers can avoid failed deals and ensure a comprehensive and legally clear transfer of ownership.

Purpose and Importance of the Requisition Date

It is the point where necessary searches like title examinations and off-title inquiries are completed to uncover legal hurdles such as zoning by-law violations, encumbrances, or disputes. For example, if an encroachment issue or missing retrofit certificate is identified, the buyer can request the seller to rectify these problems before the transaction proceeds. This process ensures that the property is in compliance with all legal boundaries and free from liabilities.

In my experience, the Requisition Date is a binding checkpoint that provides clarity and enforceability to the Agreement of Purchase and Sale (APS). It allows the buyer to address unforeseen errors or inaccuracies in the seller’s documentation, such as issues with public records or zoning laws. The buyer can ensure that all raised requisitions are resolved within the stipulated deadlines. This not only prevents deal delays but also avoids costly legal actions or termination of the agreement. The timeliness and attention to detail during this phase are essential for a smooth transaction and to secure the buyer’s interests.

Calculation and Legal Requirements of the Requisition Date

When calculating the Requisition Date, precision is critical. It is often set thirty days or more before the completion of the transaction, giving enough buffer time to resolve potential issues. A good real-estate lawyer will help buyers and sellers meticulously plan this key date to avoid any hindrances.

During this period, buyers have the opportunity to examine the property’s title, conduct searches, and raise any concern or objection with the seller if discrepancies are found. If issues arise, the Requisition Date allows for the agreement to be extended if both parties agree. However, this flexibility is not automatic; a waiver might be required to safeguard the buyer’s rights and ensure the fulfillment of the Agreement of Purchase and Sale (APS) of property and title to pass from seller to buyer once an agreed-upon price is paid and other contract terms are mutually satisfied.

Strategic use of this date—marked clearly with a calendar reminder—can help buyers stay on track, avoid unnecessary delays, and ensure that the title is legally clear before the property begins changing hands.

In practice, a well-planned Requisition Date can protect the buyer's investment and prevent costly delays. By addressing all title issues early and ensuring all conditions are satisfied, the buyer can approach the closing with confidence. Whether it’s five days or earlier, this deadline ensures that both parties can move forward smoothly, making it a crucial component of any real estate transaction.

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Process on the Requisition Date

What Happens on the Requisition Date?

The buyer’s legal representative ensures the property being purchased is free of problems that could interfere with future transactions. On this day, the title and associated documents are carefully reviewed to identify any defects, unregistered claims, or prior unresolved conveyances. The lawyer’s obligation includes examining surveys, sketches, and the legal description of the land to uncover potential concerns such as easement provisions, encroachments, or deed restrictions. Any outstanding liens, unpaid mortgage, or title restrictions must also be addressed to protect the buyer’s ownership rights.

During this process, a regular review practice ensures that all issues are assessed and resolved promptly. The seller must discharge any outstanding liens or claims still under the seller’s control, while the buyer’s lawyer ensures compliance, if applicable. This assessment helps confirm that the property has no unresolved legal matters that could delay or disrupt the transaction.

Request for Additional Information

A requisition is a formal request sent by the purchaser's lawyer to the seller, asking for clarification or evidence about specific aspects of the property. This process ensures that the property is on solid legal footing before the transaction moves forward. For instance, the lawyer may request information about zoning by-laws, the current use of the property, or its compliance with local zoning regulations. This is especially important for properties like residential apartments, where the legality of the future use may come into question. Any work orders, deficiency notices, or unresolved matters that could affect the title must also be addressed to provide the buyer with peace of mind.

If the initial findings raise concerns or are incomplete, the buyer’s lawyer may issue a second requisition seeking responses to specific issues. This can include questions about disputes, outstanding legal claims, or deficiencies that could be significant to the buyer. Addressing these concerns promptly ensures the transaction proceeds without unnecessary delays or complications.

The Importance of the Requisition Date in Property Transactions

When it comes to purchasing a home or residential apartments, the requisition date plays an essential role in ensuring a smooth transition in property ownership. This is the time when any unresolved issues related to title, zoning by-laws, or legal non-conforming use are identified and addressed. A good faith effort is critical on both the selling parties and buyers’ sides to ensure that all necessary amendments, documentation, and agreements are in place. The requisition date essentially protects both parties and allows time to rectify errors or resolve disputes, such as defects in the property, missing clear titles, or any judge’s decision that may affect ownership rights.

By identifying potential issues early, such as retrieving deposits or correcting errors in mortgage paperwork, the process resolves many hurdles that could delay closing. It ensures that interests of all parties are aligned, giving time to finalize resolutions for disputes or amendments to the agreements. This step is especially crucial in determining whether the property is marketable and free of any problems that could lead to a buyer needing to rescind their offer.

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Potential Issues with the Requisition Date

Delays in Obtaining Information

When dealing with delays in obtaining information, the process can often feel like a frantic scramble against a ticking clock. In the context of the requisition date, the buyer is typically racing to gather all pertinent documents outlined in the Agreement of Purchase and Sale before the deadline. However, delays can arise from several sources. A seller’s delay in providing required documents such as evidence of ownership, existing liens, or surveys can create bottlenecks. Additionally, third-party agencies, such as municipal offices responsible for zoning by-laws or compliance certificates, may fail to respond promptly to inquiries, further slowing the process.

From my experience working with professionals, the setting plays a crucial role—urban areas often lead to more complex challenges due to stricter zoning by-laws and heavier workloads for agencies. It’s important to anticipate these obstacles and account for potential delays by starting inquiries early. Without timely access to documents, the deal could face risks, even jeopardizing its completion. Being proactive ensures that you're not left in a vulnerable position when time is tight.

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Discrepancies in Documents

When reviewing documentation during the requisitioned phase, discrepancies can create serious complications if not handled properly. For example, a property may have an outdated survey or an unrecorded easement that wasn’t disclosed earlier. These issues often arise during a title search or off-title search and need to be identified immediately. From my experience, paying attention to detail is key—errors in the legal description or unclear ownership records can delay the process significantly. If these problems are not addressed and remedied within the agreed period, they can jeopardize the deal entirely.

Ensuring all concerns about the property are cleared up helps avoid last-minute surprises. With proper communication and time management, even complicated discrepancies can be managed effectively.

Legal Consequences of Missed Requisition Date

Missing the requisition date is more than just a minor delay—it can lead to serious legal consequences that may impact your claim to the property. Even if the issue doesn’t directly affect the root of title, failing to meet the deadline can weaken your ability to compel the seller to address any defects that have been identified. Worse, if problems are discovered after the requisition date, you might have to take responsibility for them yourself, or your only option could be securing title insurance to mitigate the risk. In more severe situations, such as an unsatisfied lien, the contract could face termination or delays, potentially leaving you, the buyer, responsible for legal fees and court proceedings.

How does The Requisition Date Affect the Agreement?

The calculated Objection Date plays a critical role for both purchasers and sellers in an Agreement of Purchase and Sale (APS). According to Clause 10 ("Title"), if objections are raised before the Objection Date and the seller is either unable or unwilling to resolve the issues—whether by addressing them directly or securing title insurance—the agreement may be deemed terminated, with the deposit funds returned to the appropriate parties.

However, if the purchaser fails to raise objections to the title by the Objection Date, this is considered an acceptance of the property's title as-is.

Missing the Deadline Date

The Requisition Date is one of the most critical deadlines for purchasers in an Agreement of Purchase and Sale, second only to condition deadline dates. While missing this date (or its associated deadline) can lead to challenges in transferring real property, it’s not necessarily the end of the deal. If the issue affects the Root of Title, concessions must be made, or the agreement may be considered terminated. For issues that don’t go to the root of title but are discovered after the deadline, solutions like title insurance can help mediate the situation effectively.

Title and Requisition Issues

"On Title" Versus "Off-Title" Issues

The Agreement of Purchase and Sale allows for objections to issues that go beyond what is “registered on Title.” It’s crucial to understand that title issues related to a property can still be valid even if they are not explicitly listed “on Title.”

Examples of valid off-title objections include tax arrears, unresolved work orders, and deficiencies that could void fire insurance. To address these, a lawyer may conduct off-title searches. This involves actions such as sending a letter to the City or Town’s Building Department to confirm there are no outstanding work orders affecting the property, or requesting a Tax Certificate to identify any arrears, which could take priority over the title.

Examining the Root of Title

The "Title" clause within the Agreement of Purchase and Sale (APS) addresses issues that pertain directly to the Root of Title.

It is crucial to differentiate between Title Issues and issues that deal with the Root of Title.These matters may not harm the owner of the title directly but could have broader implications. For example, tax arrears on a property would not normally compromise the title itself. While the owner of the beneficial interest in the property retains their title and priority of claim, these arrears could still present concerns.

Similarly, an outstanding Work Order might influence the marketability of a property (e.g., making it technically non-compliant until the Work Order is resolved), but this issue typically does not interfere with the ability to transfer the title from one owner to another. (Of course, exceptions may apply depending on the circumstances.) While such concerns could reduce the property’s market value, they generally do not impose restrictions on the transfer of title.

Title-Related Issues

In contrast to standard Title Issues, an issue that runs to the Root of Title involves a claim or encumbrance that prevents a purchaser from obtaining good and valid title. For instance, a mortgage on the property must be discharged before the property, as outlined in the agreement, can be conveyed to a purchaser. Accepting title without clearing such an encumbrance would effectively mean the purchaser is buying the property minus the value of the charge or mortgage.

Issues that run to the Root of Title may be objected to right up until the date of closing.

It is essential to act in good faith when raising objections. Lawyers, Purchasers, and Sellers are expected to work toward the collective goal of successfully transferring the property from the Seller to the Buyer. Cooperation, collaboration, and reasonable accommodation from both parties are crucial to ensuring a successful transaction.

There are cases where one party has attempted to conceal, distort, or manipulate facts related to title in order to gain an unfair advantage in the sale process. Such conduct is strongly disfavoured by the courts, as they uphold fairness and integrity in property transactions. For an example of such a case, click here to learn more.

General Requisition and Legal Aspects

Types of Requisitions

In real estate transactions, various types of requisitions play a crucial role in ensuring the purchase and sale agreement is fulfilled correctly. Title requisitions, for instance, focus on resolving encumbrances like outstanding taxes, work orders, or specific issues such as mortgage discharge to provide the buyer with a clear title. Conveyancing requisitions typically involve requests for further details about the property, including compliance with zoning laws, dimensions, or potential easements. Whereas contract requisitions deal with clarifying terms, chattels, or legal aspects of the agreement, ensuring alignment with the buyer’s needs to avoid disputes. For all requisitions, the seller must respond in a timely manner with the proper documentation, as this affects the overall performance of the transaction and adherence to the closing date.

Title Requisitions

A title requisition ensures the buyer acquires good and valid title by identifying issues that run to the root title. Under the Vendors and Purchasers Act, this process is bound by strict deadlines, often within 30 days of the agreed requisition date as per the purchase and sale agreement. Common title requisitions include resolving outstanding liens or verifying the legal description of the property. Missing these timely requirements can delay the performance of the agreement.

Conveyancing Requisitions

Conveyancing requisitions involve formal requests for additional information to address legal or structural matters of the property, like outstanding taxes, compliance with zoning regulations, or any applicable easements. These issues are critical for ensuring that the property is free of encumbrances and aligns with the buyer’s expectations. For example, clarifying whether a mortgage discharge has been completed falls under this category. These rectifications, requested by the buyer, help ensure transaction transparency and smooth conveyance of the property.

Contract Requisitions

Contract requisitions are made when the buyer raises formal requests for clarification regarding specific terms in the purchase and sale agreement. The buyer may want to verify chattels, fixtures, or address discrepancies related to dimensions or outstanding work orders. For example, a specific contract requisition may require the seller to clarify whether certain items will remain with the property after the transaction.

The Rules Regarding Requisitions

To ensure smooth handling of requisitions, both parties must adhere to formal requirements and respond promptly to avoid unnecessary dispute. The seller is legally required to provide accurate information and documentation in response to the buyer’s requisition. If either party fails to meet the agreed deadlines outlined in the purchase and sale agreement, this can negatively impact the transaction timeline. A lawyer is often involved in the review of these documents to ensure all details are addressed timely, facilitating a clear, professional process.

Conclusion

This is the key point to uncover and address any issues that could impact your ownership rights. Approaching this stage with preparation and diligence ensures a seamless process toward acquiring your property. Keep in mind, the requisition date is far more than a mere formality—it plays a critical role in establishing a strong and legally secure foundation for your investment in real estate, wealth creation and preservation of wealth.