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Closing Date: The Grand Finale of Your Real Estate Journey

Written by Dan Attana

March 17, 2025

closing date

The phrase “closing date” rings with anticipation for both buyers and sellers across Canada. It signals the culmination of weeks, sometimes months, of negotiations, paperwork, and preparation, all tailored to the Canadian real estate landscape. But what exactly is a closing date in the Canadian context, and why is it so significant? Let’s break it down.

What is a Closing Date in Canada?

The closing date, also known as the completion date or the possession date, is the day when the legal transfer of property ownership occurs in Canada. It’s the moment when the buyer officially becomes the registered owner of the property and the seller receives the agreed-upon funds. Think of it as the grand finale of the Canadian real estate transaction, with specific nuances distinct to our legal and financial systems.

Key Events on Closing Date: 

  • Document Signing (Lawyer Driven):

    • In Canada, the legal framework for real estate transactions places a significant emphasis on the role of lawyers. This ensures a high level of legal scrutiny and protection for both buyers and sellers.  
    • Specific Documents:
      • Transfer/Deed: This is the core legal document that formally transfers ownership of the property from the seller to the buyer. It contains detailed information about the property, the parties involved, and the terms of the transfer.  
      • Mortgage Documents: If the buyer is financing the purchase with a mortgage, they will sign a series of mortgage documents with their lender. These documents outline the terms of the loan, including the interest rate, repayment schedule, and security interest in the property and must be secured before the closing date.  
      • Statement of Adjustments (Legal Review): Although it is a financial document, Lawyers will review this document to ensure it is accurate.  
      • Other Legal Agreements: Depending on the specific circumstances of the transaction, other legal agreements may be required, such as easements, rights of way, or condominium agreements.
    • Lawyer’s Role:
      • Lawyers ensure that all documents are properly prepared, reviewed, and executed prior to the closing date.  
      • They explain the legal implications of each document to their clients. 
      • They witness the signing of documents to ensure their validity.
      • They ensure all documents are compliant with provincial and territorial law.
    • Location: Document signing typically takes place at the buyer’s and seller’s respective lawyers’ offices.
  • Funds Transfer (Through Lawyers):

    • The transfer of funds in a Canadian real estate transaction is typically handled through the lawyers’ trust accounts, providing a secure and reliable method of payment.
    • Process:
      • The buyer’s lawyer receives the mortgage funds from the lender and the remaining balance of the purchase price from the buyer by the closing date. 
      • The buyer’s lawyer then transfers these funds, along with any necessary adjustments, to the seller’s lawyer.
      • The seller’s lawyer verifies the funds and releases them to the seller.
      • Electronic Funds Transfer (EFT) is now the norm, providing for a faster, and more traceable transaction.
    • Security:
      • Using lawyers’ trust accounts provides a layer of security, ensuring that funds are protected and only released when all conditions of the transaction have been met.
  • Registration of Transfer/Deed:

    • The registration of the transfer/deed at the provincial land registry office is the final step in the legal transfer of ownership. 
    • Process:
      • The buyer’s lawyer submits the transfer/deed and other required documents to the land registry office. 
      • The land registry office reviews the documents and records the transfer of ownership. 
      • Once the registration is complete, the buyer’s ownership of the property is officially recorded.  
    • Provincial Variations:
      • The specific procedures and requirements for land registration vary slightly between provinces and territories. 
      • Electronic registration is becoming increasingly common, streamlining the process.
  • Key Handover on the Closing Date:

    • The physical handover of the keys to the property marks the point at which the buyer takes possession.
    • Timing:
      • Typically, the key handover occurs after the registration of the transfer/deed has been confirmed. This ensures that the buyer has legal ownership of the property before taking possession on the closing date.
      • Occasionally, keys are released once the sellers lawyer confirms receipt of funds.
    • Arrangements:
      • The key handover is usually arranged through the lawyers or real estate agents involved in the transaction.
      • All keys, garage door openers, and other access devices are typically handed over at this time.  
  • Closing Date-Statement of Adjustments:

    • This document is critical to the financial accuracy of the transaction. 
    • Purpose:
      • The statement of adjustments accounts for any costs that are divided between the buyer and seller, such as property taxes, condominium fees, and utility bills. 
      • It ensures that each party pays their fair share of these costs.
    • Content:
      • The statement will include a breakdown of the purchase price, any deposits paid, and the adjustments for various costs.

        It will show the final amount due from the buyer to the seller.   

    • Legal Review:
      • Lawyers will review the statement of adjustments to ensure its accuracy and fairness by the closing date

Why is the Closing Date Important in Canada? 

  • Legal Ownership (Provincial Registration):

    • In Canada, property ownership is a matter of public record, maintained by provincial or territorial land registry offices. The closing date is the pivotal point where the buyer’s name is officially entered into this record, establishing their legal title to the property.
    • This registration provides crucial security and protection for the buyer. It ensures that their ownership is recognized and enforceable, preventing future disputes over who owns the property.
    • The land registry system acts as a central repository for all property-related information, including ownership records, mortgages, and liens. This transparency and accuracy are fundamental to the integrity of the Canadian real estate market.
    • Without the registration, the buyer would have no legal proof of ownership.
    • The provincial registration allows for clear title searches to take place, ensuring that there are no outstanding liens, or other issues with the property.
  • Financial Transfer (Lawyer Trust Accounts):

    • The use of lawyer trust accounts in Canada provides a secure and regulated mechanism for the transfer of substantial funds in real estate transactions.
    • Lawyers have a fiduciary duty to their clients, meaning they are legally obligated to act in their best interests. This duty extends to the handling of funds in their trust accounts.
    • The trust account system ensures that funds are held securely until all conditions of the transaction have been met, providing peace of mind for both buyers and sellers.
    • This process minimizes the risk of fraud or misappropriation of funds, which is essential in high-value transactions like real estate purchases.
    • The lawyer is responsible for ensuring that all funds are dispersed correctly, and that all financial obligations are met by the closing date.
  • Possession (Aligned with Legal Transfer):

    • The closing date establishes the precise moment when the buyer is entitled to take physical possession of the property.
    • This alignment between legal ownership and physical possession ensures a clear and unambiguous transfer of control.
    • It prevents disputes over when the buyer can move in or when the seller must vacate the property.
    • It is very important that the agreement of purchase and sale clearly outline what items will, and will not be included with the property on the possession date.
    • The final walkthrough, that is completed before closing, helps to confirm that the property is in the agreed upon state.
  • Contract Fulfillment (Provincial Law):

    • The closing date signifies the culmination of the Agreement of Purchase and Sale, the legally binding contract that governs the real estate transaction.
    • This agreement outlines all the terms and conditions of the sale, including the purchase price, closing date, and any contingencies.
    • Provincial real estate laws provide a framework for these agreements, ensuring that they are fair and enforceable.
    • The closing date is the point at which both parties fulfill their contractual obligations, completing the transaction.
    • Failure to close on the agreed upon closing date, can have serious legal and financial repercussions for the party that is in default.
    • It is the final step in the process, and allows for the removal of any conditions that were set out in the agreement of purchase and sale.

Factors Affecting the Closing Date:

  • Mortgage Approval (Canadian Lenders): Delays in mortgage approval from Canadian financial institutions can push back the closing date.
  • Title Insurance (Common Practice): Title insurance is very common in Canada and any issues found during the title search can delay closing.
  • Condominium Documents (If Applicable): If the property is a condominium, reviewing and approving condominium documents can add time to the process.
  • Negotiated Terms (Agreement of Purchase and Sale): The closing date is negotiated as part of the Agreement of Purchase and Sale, which must adhere to provincial regulations.
  • Lawyer Availability: Because the lawyer plays such a large role, their availability is a factor.
  • Provincial Holidays: Be aware of provincial holidays that could impact the land registry offices, and therefore the closing date.

Preparing for Closing Date:

Both buyers and sellers need to prepare for closing day, keeping in mind Canadian practices.

  • Buyers:
    • Secure final mortgage approval from a Canadian lender.
    • Obtain homeowner’s insurance (or condo insurance).
    • Conduct a final walkthrough of the property with your real estate agent.
    • Arrange for the transfer of utilities by the closing date.
    • Ensure all funds are transferred to your lawyer’s trust account.
  • Sellers:
    • Ensure the property is clean and ready for handover by the closing date.
    • Gather all necessary documents for your lawyer.
    • Arrange for the transfer of utilities.
    • Ensure all agreed-upon items are removed from the property.
    • Provide the lawyer with all necessary keys and access codes.

In Conclusion:

The closing date is a crucial milestone in the Canadian real estate process, representing the culmination of all the hard work and preparation, with specific Canadian legal and financial considerations. By understanding its significance and preparing accordingly, both buyers and sellers can ensure a smooth and successful transaction within the Canadian real estate framework.

To buy or sell your home in Etobicoke or the Greater Toronto Area, contact me today at 647-995-3391 or via email at [email protected]. You can also visit my website by clicking here.

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Questions? Call Dan! : 647 995 3391

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