Closing클로징 (잔금일)

What is it?

Closing (completion) is the day the sale is actually completed. The buyer pays the rest of the price, the seller hands over ownership, and the keys go to the buyer. The “completion date” in your agreement is this day.

In Ontario the buyer and seller do not meet. The two lawyers exchange money and documents, and register the transfer of ownership in Ontario’s electronic land registration system. Ownership changes legally only when that registration is done.

Closing day, step by step

1. A few days before: the buyer’s lawyer checks the title (the ownership record), prepares the statement of adjustments (price minus deposit, with taxes and fees split by date) and the papers to sign. You sign at the lawyer’s office and send the balance to the lawyer’s trust account (a separate account that holds clients’ money).
2. Morning: your mortgage lender sends the loan money to your lawyer’s trust account. The lawyer adds the rest of your down payment to make up the balance due.
3. Midday: your lawyer sends the balance to the seller’s lawyer (usually by bank wire), and the seller’s lawyer undertakes to pay off and discharge the seller’s old mortgage. Once both lawyers have checked the documents, they register the transfer and your new mortgage through Teraview (the electronic registration software). Land transfer tax is paid at the same time.
4. Right after registration: the seller’s lawyer confirms the keys can be released, and you usually pick them up from the listing agent or the seller’s lawyer’s office.

No law sets the time you get the keys. The afternoon, after the wire and registration are done, is common, and it can slip into the evening. Book your movers with room to spare.

What the buyer must do before closing

• Hire a lawyer: in Ontario a lawyer handles the registration. Send the agreement to your lawyer as soon as the deal is firm.
• Balance due: your lawyer will tell you the amount from the statement of adjustments. It usually has to be in the lawyer’s trust account a day or two before closing, by bank draft or wire, not a personal cheque. Warn your bank in advance.
• Mortgage paperwork: finish everything the lender asks for (proof of income, source of down payment, proof of home insurance) so the loan money arrives on time. Lenders normally require proof that home insurance is in place before closing.
• ID: lawyers and real estate agents must verify your identity under the law. Bring government-issued photo ID.
• Final walkthrough: if your agreement allows visits, check before closing that the home and the included items (fridge, washer and so on) are as agreed.
• Utilities: move or set up electricity, gas, water and internet for the closing date. For a condo, tell management your move-in date (elevator booking).

How long until closing?

The closing date is set in the offer. No law fixes the length. For resale homes, about 30 to 90 days after acceptance is common. It is negotiated around the seller’s moving plans and the buyer’s financing.

For new homes and pre-construction condos covered by Tarion, closing and occupancy dates must be on a business day. Resale closings also avoid weekends and holidays because registration and bank wires only work on business days.

What if closing is delayed or fails?

• Money arrives late: if the mortgage funds or the buyer’s balance are late, registration cannot happen that day. The lawyers often agree to close on the next business day, but the late side may have to pay the other side’s costs (interest, storage and so on).
• Title problems: if the seller’s mortgage, a lien or a court order has not been cleared, the lawyer holds registration until it is fixed.
• Problems with the home: if the final walkthrough shows major damage or missing included items, your lawyer may hold back part of the money or negotiate a price adjustment.
• One side does not close at all: breaking a firm agreement is a breach of contract. A buyer who cannot close can lose the deposit and owe more; if the seller fails to close, the buyer can claim losses. Talk to your lawyer at once.
• New homes and pre-construction: under Tarion’s rules the builder generally needs at least 90 days’ written notice to change a closing date, and with proper notice it can sometimes move the date without paying compensation. If the builder goes past the firm date, you can usually get delay compensation, but there may be none for an unavoidable delay (such as a strike or fire) or if you agreed to the new date.

Pre-construction: occupancy and closing are different

In a pre-construction condo there is an occupancy date and a separate final closing. Moving in before the building is registered is called interim occupancy, and you are not yet the owner. Your mortgage has not started; instead you pay the builder a monthly occupancy fee.

The real closing happens once the condominium is registered: you pay the balance, receive title and your mortgage begins. Your purchase agreement sets out both dates and how the occupancy fee is calculated. See “Interim occupancy” and “Occupancy date” for details.

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