What is a statement of adjustments and why does it matter?
A statement of adjustments is the document your lawyer prepares before closing that shows exactly how much money you need to bring to the table on closing day. It starts with the purchase price, then adds or subtracts items that are prorated between buyer and seller as of the closing date.
Common adjustments include property taxes (if the seller has prepaid taxes beyond the closing date, you reimburse them; if taxes are in arrears, you receive a credit), condominium common-expense fees paid in advance, and sometimes prepaid utilities or fuel oil in the tank. Your deposit is credited against the total. The result is the exact amount you must deliver — usually by certified cheque or bank draft — to your lawyer on closing day.
Reviewing the statement carefully with your lawyer before closing helps you avoid last-minute surprises. If any figures look wrong — such as a tax credit you do not recognize — flag it before funds are exchanged.
Key takeaways
- The statement of adjustments calculates your exact closing-day payment.
- It includes the purchase price, minus your deposit, plus prorated items.
- Property tax prorations are the most common adjustment.
- Review it with your lawyer a few days before closing.