What happens if the property transfer gets registered before the mortgage funds actually arrive?

This should not normally happen, since standard practice is to confirm that mortgage funds have actually cleared into trust before registering the transfer, precisely to avoid a situation where title moves without the money actually being in hand. If it does happen, it represents a real process failure rather than a routine timing issue, and it needs to be addressed immediately by the lawyers involved.

The practical risk is that the buyer now holds registered title to the property without the underlying mortgage funds having actually been received, which can leave the seller unpaid in the interim and create real complications if anything then goes wrong with the mortgage funding. Your lawyer should treat this as urgent, working to confirm the funds are genuinely coming and tracking down the delay, since the ordinary safeguard of confirming funds first was, for whatever reason, not followed here. If this happens on your file, ask your lawyer directly what went wrong and what steps are being taken to protect you and resolve the shortfall.