What happens if the seller's mortgage discharge isn't ready and the sale still needs to close?

This is one of the most common closing-day timing gaps, and Ontario lawyers have a well-established way of handling it: the seller's lawyer gives an undertaking to obtain the discharge statement, pay out the existing mortgage, and register the discharge on title within a defined short period after closing, rather than delaying the whole transaction until the paperwork happens to arrive.

To protect the buyer during that window, the buyer's lawyer typically holds back an amount from the sale proceeds sufficient to cover the payout, so the money is available if needed and the seller's lawyer has a real incentive to follow through promptly. Once the discharge is obtained and registered, the held-back funds are released to the seller. This routine mechanism is exactly why an outstanding mortgage discharge rarely needs to derail a closing on its own, even though clear title on paper has not technically been achieved yet at the moment of closing. If you are the buyer, your lawyer can explain what amount is being held back and for how long in your specific transaction.