Can a seller register a new mortgage against the property during the gap between escrow and final closing?

Technically, since the seller may still be the registered owner during the gap before final registration, a new encumbrance is not physically impossible in the same way it would be if the transfer were already complete. In practice, though, this is exactly the risk gap closing arrangements are built to prevent, and a seller doing this deliberately would be acting in bad faith toward an agreement already substantially completed.

Buyers' lawyers protect against this by conducting a fresh bring-down title search right before final registration specifically to catch any new registrations made during the gap, and gap or escrow closing agreements themselves typically include express terms prohibiting the seller from encumbering the property further during that window. If something new did show up, it would need to be resolved, likely through the same tools used for any other last-minute title problem, before registration proceeds, and the seller could face serious consequences for breaching the escrow agreement's terms. This is one of the reasons buyers' lawyers do not treat a gap closing as risk-free and build in these specific safeguards.