Can We Extend the Closing Date in Ontario After Signing the Agreement?
A closing date can often be moved, but how that works depends on your agreement of purchase and sale, so it is best to have any change set out clearly in writing with help from your lawyer. Any extra costs, such as interest or other charges for the delay, depend on what you negotiate and on your agreement of purchase and sale.
Whether the date is strict matters. If time is of the essence and neither party is ready to close on the agreed date, the agreement stays in effect, and either party can restore time of the essence by setting a new closing date and giving the other party reasonable notice. What a missed date means for you depends on your agreement and the facts, so it is worth confirming with a lawyer.
New homes have an added rule. If a builder misses the firm closing date for a freehold home or the firm occupancy date for a condo without a mutual extension or an unavoidable delay, the buyer gets delayed closing compensation of up to $7,500, which includes $150 per day for living expenses with no receipts needed. That protection applies to new homes only, so for a resale ask a lawyer before you sign any extension.
Key takeaways
- How a closing date can be changed depends on your agreement of purchase and sale, so any change should be set out clearly in writing.
- If time is of the essence and neither party is ready, the agreement stays in effect.
- Either party can restore time of the essence by setting a new closing date and giving reasonable notice.
- On a new home, a builder who misses the firm closing or occupancy date without a mutual extension or unavoidable delay may owe delayed closing compensation of up to $7,500.