Statement of adjustments정산서 (클로징 정산)

What is it?

The statement of adjustments is a one-page calculation your lawyer prepares a few days before closing (the day you pay the balance and the home becomes yours). It lists “credits” for the buyer and for the seller, and the difference between the two columns is the balance due on closing, the amount the buyer must actually pay.

The price is a credit to the seller; the deposit already paid is a credit to the buyer. Then, if the seller has prepaid items such as property tax or condo fees for a period after closing, the buyer repays that share; if the seller owes something for a period before closing, the buyer gets a credit. Splitting these items by date is called an “adjustment”.

What goes on the statement

• Purchase price: credit to the seller.
• Deposit: credit to the buyer. It comes off the price.
• Property tax: the municipality usually collects the year’s tax in several instalments. If the seller paid for a period after closing, the buyer repays that share; if a period before closing is unpaid, the buyer gets a credit for the seller’s share.
• Condo common expenses: the monthly fee unit owners must pay under the Condominium Act. They are usually paid at the start of the month, so for a mid-month closing the buyer repays the remaining days. The status certificate shows whether any fees are in arrears.
• Unmetered fuel and utilities: for a home heated with an oil tank, the fuel left in the tank is often adjusted at closing; your agreement says how. Metered services (electricity, gas, water) are settled in each party’s own name and usually stay off the statement.
• Tenanted homes: the part of the current month’s rent for the period after closing goes to the buyer (the new landlord). The tenant’s rent deposit (last month’s rent) and the interest built up on it must also pass to the new landlord, because the law says a new landlord cannot collect a rent deposit again from the tenant.
• New homes and pre-construction: builder agreements often add items such as development charges, utility connection fees and the Tarion enrolment fee. The Tarion Addendum attached to the agreement includes summary sheets for closing costs and adjustments. Check whether your agreement caps these amounts.
• Other lines: depending on the agreement, prepaid amounts on rental equipment (water heater, water filter), a holdback, or HST on a new home.

Land transfer tax, legal fees and title insurance are not adjustments with the seller; they are the buyer’s own costs. Your lawyer usually combines them below the statement or on a separate trust ledger to give you the total amount needed.

Who pays for the closing day itself?

When items are split by date, the agreement decides who bears the closing day itself. The standard agreement widely used in Ontario normally assigns the day of completion to the buyer. We could not check the form’s wording directly for this page, so read the adjustments clause in the agreement you sign.

The example below treats the closing day as the buyer’s.

Worked example (Toronto condo, $900,000, closing September 16)

Assume the seller has paid the full year’s property tax of $4,000 and paid the September condo fee of $600 on September 1. The deposit was $45,000.

Example for reference only. The $856,472.60 balance is paid with the mortgage (say $810,000) and the rest of the down payment ($46,472.60). Land transfer tax, legal fees and so on are sent to the lawyer on top of this.

When do you get it, and what should you check?

1. The seller’s lawyer drafts the statement and sends it to the buyer’s lawyer, usually a few days before closing.
2. The buyer’s lawyer checks the amounts and dates and tells the buyer the total amount needed.
3. You check that the price and deposit match the agreement, that the yearly tax and monthly fee figures match the tax bill and the status certificate, and that the day count runs from the closing date.
4. If all is well, you send the balance and costs to the lawyer’s trust account. Some agreements have a readjustment clause so the lawyers can settle up later if the real tax bill turns out different.

The statement is used elsewhere too

Because it is the official record of the price and what was actually paid, the Ontario Ministry of Finance asks for a copy of the statement of adjustments when you apply for a land transfer tax refund or prepay the tax. You will also use it later for capital gains calculations when you sell, or as proof of the source of a down payment on another home. Keep it with your closing documents.