Document background
The Reservation Fee Agreement is commonly used in the Canadian real estate market, particularly for new developments, pre-construction properties, or high-demand real estate where buyers wish to secure their interest in a property before proceeding with a full purchase agreement. This document typically outlines the reservation fee amount, handling of funds in accordance with Canadian banking regulations, duration of the reservation period, and conditions for refund or conversion to purchase. It serves as an intermediate step between initial interest and final purchase, providing security for both parties while complying with provincial real estate laws and federal regulations. The agreement is particularly valuable in competitive markets where properties may sell quickly, giving serious buyers a formal mechanism to secure their interest while arranging financing or conducting due diligence.
