How to Buy, Sell or Rent Like a Pro

Last updated April 29, 2024

Written by 

Jasmine Roy

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Reviewed by 

Sarah Ure

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Fact checked by 

Kyle Adam

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One of the biggest fears people have when buying, selling, or leasing property is being scammed or defrauded. 

Not surprisingly, this fear stems from concerns about trust, reliability, and the lack of justice when things go awry (as things often do).

Looking for the confidence and expertise needed for a successful transaction? You'll need to understand some key practices, consumer laws, and the importance of proper documentation.

Read this guide to gain the knowledge and strategies needed to close the deal legally.

There are general codes of conduct you should be familiar with when doing business — that is, if you want to start things off on the right foot. 

Avoid getting involved in a transaction that you later regret by learning the steps that protect against fraud.

Minimizing the risks

According to Statistics Canada, fraud is the most common crime perpetrated against Canadians. It's also an indictable offence, punishable by up to 14 years of prison.

Curiously, fraud is one of the least likely crimes to be reported to police. 

While there are many reasons why a fraud victim might not take the crime to authorities, the bottom line is this: to reduce fraud, it’s essential consumers learn about fraud prevention, detection, and the reporting process. 

Buyers can take steps to avoid sellers who do business in bad faith:

• Read seller reviews: Reviews offer a form of social proof about the reliability and honesty of sellers.
• Test the product: This allows you to identify any defects or issues that weren’t disclosed.
• Ask questions: Fill in any gaps in the product description. Engaging with the seller can reveal more about their reliability and the product’s condition.
• Use Canadian-specific online platforms: These platforms are often tailored to Canadian legal standards. Plus, localized options allow you to meet in person for product testing or pickups. 
• Be cautious with personal information: Never share more personal information than needed. Be wary of sellers or online platforms that ask for details irrelevant to the purchase (e.g., your SIN or passwords to unrelated accounts).

By implementing preventative strategies, buyers can create a safer, more transparent transaction. This diligence is particularly useful for private sales online, which lack the safeguards present in traditional retail settings. 

Identifying online scams

Online scams have become a significant component of fraud, reflecting the adaptability and innovation of scammers.

It seems like everyone knows someone who’s been scammed online. In a 2023 study by TransUnion, about 8.2% of Canadians reported being victims of suspected online retailer scams. So, how do consumers detect an online scam? 

We’ve already discussed some preventative techniques. Now, let’s talk about how those techniques and others can help you identify fraud:

• Be skeptical of too-good-to-be-true offers:  If a deal sounds too good to be true, it usually is. Reading reviews, testing the product, and asking questions helps ensure you’re not falling for a scam.
• Use secure payment methods: Scammers may ask for direct bank transfers, cryptocurrency, or gift cards because these methods make it hard to recover funds once transferred. Always opt for payment methods that offer some form of buyer protection. It’s also best practice to avoid sending any money before confirming you’ll receive the item you’re buying.
• Verify website security: Be wary of websites that lack a URL that begins with “https://”. Spelling and grammar errors can also signal a hastily put-together scam site.
• Educate yourself on recent scams and frauds: Check out the Canadian Anti-Fraud Centre (CAFC) for information about common fraud cases. You can search scams by type (e.g., phone, internet, mail) or target group (e.g., businesses or individuals).

Canada has robust consumer protection laws that vary by province and territory.

While consumer laws typically cover business affairs, legal obligations and protections also exist in private sales.

Let's discuss legal expectations, consumer rights, and their impact on private sales and purchases. 

The Canada Consumer Product Safety Act (CCPSA)

The CCPSA protects the public by addressing the dangers to health or safety posed by consumer products in Canada. Though this act mainly targets manufacturers and distributors, the principles of product safety apply universally. 

Refer to the CCPSA to ensure a product complies with Canada’s safety standards. For a layer of security, sellers can add safety disclosures to their Sales Agreements.

Due diligence, documentation, and transparency will go a long way in terms of legal and physical protection.

The Sale of Goods Regulations

Federal power over commerce is generally limited to trade in Canada (i.e., the sale of goods between provinces or internationally). 

However, the regulation of certain industries, businesses, and professions falls under provincial jurisdiction over property and civil rights. As such, each province has the authority to regulate trade and commerce within its borders. 

Each province may enact its own version of a Sale of Goods Act, describing the rights and responsibilities of the parties in a private sale. 

For example, British Columbia’s Sale of Goods Act outlines rules for the formation of contracts, including stipulations on acceptances. This clarity is vital in transactions that may involve negotiations or counteroffers. Alberta, Saskatchewan, and Manitoba all have a similar acceptance clause in their respective Acts. 

Quebec doesn’t have a Sale of Goods Act per se, but it regulates these transactions under its Civil Code. This code features rules and obligations regarding:

• The delivery of goods
• Wrranties against hidden defects
• The transfer of property

The key takeaway: The diversity in regulations underscores the importance of knowing your local laws.

The Consumer Protection Act

Private sales are often seen as “buyer beware” situations, but there are still legal boundaries that sellers must not cross. Each province also has a version of the Consumer Protection Act to make sure things are fair when people pay for goods or services.

These laws address unfair business practices, such as false advertising, and provide remedies for defective products or deceptive marketing. 

While these acts primarily regulate transactions between businesses and individuals, some principals can indirectly apply or inform the standards expected in private transactions:

• Misleading advertisements or product descriptions: If a private seller engages in practices akin to those prohibited under the Consumer Protection Act, such as creating misleading advertisements or providing false descriptions, they could face legal scrutiny. Although the Consumer Protection Act might not directly apply, courts may consider the legal doctrine in any legal claims brought against a private seller.
• False information: Providing false information about the legality of goods (e.g., selling stolen items as legally obtained) can lead to criminal charges, including fraud and possession of stolen property.  

The legal implications of misrepresentation in private sales can vary across Canada, with some provinces having more explicit legislation than others. To mitigate the risks of legal disputes, private sellers can follow these best practices:

1. Always provide accurate and truthful information about the condition and legality of goods.
2. Actively disclose any known defects or issues with the product.
3. Keep records of all communications and descriptions provided to the buyer and consider using a written contract to outline the terms of the sale.

The Competition Act

While the Competition Act in Canada is primarily aimed at regulating business practices to ensure fair market competition, the Act applies broadly to "persons," which can include private sellers. Certain provisions are indeed relevant to private sellers, such as those regarding misleading representations and deceptive marketing tactics. 

In practice, enforcement actions against private sellers are rare and usually involve significant instances of misleading representations or when the actions of the individual seller affect the competitive process. However, private sellers could potentially be subject to the Act’s provisions if their actions are deemed to significantly mislead consumers.

The Personal Information Protection and Electronic Documents Act (PIPEDA)

When facilitating transactions electronically, especially in the context of using legal documents from platforms such as LawDepot, protecting personal information is paramount.

Both parties involved in these transactions must adhere to the PIPEDA or provincial equivalents, depending on their jurisdiction. 

PIPEDA sets the ground rules for how businesses must handle personal information in the course of commercial activity. By adhering to these best practices and compliance guidelines, you can ensure a secure and trustworthy environment for your private sale:

1. Collect only the personal and financial information strictly needed for the transaction. 
2. Ensure both parties understand what information is being collected and for what purposes.
3. Keep personal information only as long as necessary for the fulfillment of the transaction and legal requirements.
4. Use secure platforms like LawDepot for generating legal documents. We employ robust security measures to protect user data.
5. If conducting transactions as a business online, have a clear and accessible Website Privacy Policy that explains how your company collects, uses, and discloses personal information.

Product and service warranties

Let’s take a moment to talk about warranties — an important contract condition on a product or service. 

A warranty is a promise made by one party to another about a product’s condition, performance, or quality. Warranties differ based on the transaction. They usually list the options available to the buyer if the product or service fails to meet expectations. 

There are three types of warranties common in Canada: a manufacturer’s warranty, an extended warranty, and an implied warranty. 

To ensure protection and satisfaction for both parties, it’s crucial to understand and negotiate warranties in any transaction. 

For buyers: Understanding the types of warranties and their specific provisions gives you options for protection if you buy a product that doesn’t meet expectations.

For sellers: It’s beneficial to ensure your product meets expectations to avoid disputes. Use a Sales Agreement to clearly detail any warranties that apply to your product, including any limitations or conditions that might affect a buyer’s rights under those warranties.

If you’re selling an item “as-is”, with no warranties on the condition of the goods, you may wish to use a Bill of Sale.

Creating a paper trail is essential, especially considering all we’ve learned about fraud prevention and consumer laws. 

A paper trail refers to a tangible set of documents or electronic correspondence that details a transaction. Maintaining such a record is important because it provides clear evidence of the terms agreed upon by the buyer and seller. 

Now, let’s explore how LawDepot’s document templates for sales, rentals, and licensing can help ensure your transactions are well-documented and legally sound.

Sales documents

Sales documents are foundational to any transaction involving goods. They serve to protect both parties’ interests and ensure the deal’s legal integrity. By detailing the terms of the sale, this paperwork leaves little room for misunderstanding. 

• Sales Agreement: This contract documents the sale of goods, including details about both parties, payment, and whether or not warranties are included. 
• Bill of Sale: This document creates a record of a transaction and transfers ownership of an item from a seller to a buyer. It’s suitable for when a buyer pays in full and accepts an item as is.
• Purchase Order: A buyer sends this form to a seller to order specific goods and confirm their intent to purchase them. In most industries, using a Purchase Order is standard practice for ordering goods from suppliers and vendors.
• Invoice: A seller sends this form to a customer or client to request payment. It lists the products sold, itemized prices, and the total amount owed. 

Rental agreements

For private owners, rental agreements are essential tools for managing assets and minimizing risks. Leasing out equipment or vehicles is often a lucrative source of income, so it’s important to clearly define payment terms and specify the conditions under which the rental equipment can be used. This helps safeguard the owner’s financial interests and prevent misuse. 

• Equipment Rental Agreement: This contract specifies the terms and conditions for renting equipment, including rights, obligations, insurance requirements, and payment terms. Customize LawDepot’s template for a variety of items, such as heavy machinery, power tools, and more.
• Vehicle Leasing Agreement: This contract works when leasing any motor vehicle with a VIN. Whether it’s a new or used vehicle, it’s crucial to document the agreed-upon rights and responsibilities of the parties involved. 

Licensing options

Software development and digital content creation are no longer just the domain of large corporations with deep pockets.

Independent creators, start-up entrepreneurs, and small business owners are emerging as significant contributors to innovation in the tech industry and digital content landscape. 

However, creating these products is only part of the journey; effectively monetizing and protecting your creation is where licensing comes into play.

• End User Licence Agreement: Also known as a Software Licence Agreement, this contract allows a user to buy the rights to a computer program, software, or application. This agreement doesn’t transfer ownership of the software, but it permits the buyer to use it according to certain terms and conditions.
• Digital Image Licence: This licence specifies how, where, and for how long an image may be used. It sets clear boundaries, preventing misuse while opening the door for recurring revenue streams.

Whether a licence agreement appears in digital or physical form, it’s crucial for creators who want to maintain control over the use and distribution of their intellectual property.

Having navigated through key practices, legal knowledge, and proper documentation, you’re now equipped with the expertise needed for successful transactions in buying, selling, or leasing property! 

By applying the insights gained from this guide, you can alleviate the fear of being scammed or defrauded. 

Place a strong emphasis on creating a thorough paper trail, and you’ll be better prepared to close deals legally and securely.