What is an undertaking to clear a title problem after closing and is it risky for the buyer?

This is an arrangement where the seller's lawyer formally promises to resolve a specific title problem, such as discharging an outstanding lien or clearing another encumbrance, within an agreed period after closing rather than before it, letting the transaction complete on schedule despite the unresolved issue. It relies on the fact that Ontario lawyers face serious professional consequences for breaking an undertaking, which is what makes other lawyers willing to accept one instead of insisting the problem be fixed first.

There is some real risk to the buyer in accepting this, since the defect is not actually cleared at the moment of closing, only promised to be cleared afterward. Buyers' lawyers typically manage this risk by holding back an amount of the purchase funds sufficient to cover resolving the issue, so there is a financial incentive and a fallback if the seller's lawyer does not follow through. Whether accepting an undertaking makes sense depends on how serious the specific defect is and how confident your lawyer is in the arrangement; ask your lawyer to walk through both before agreeing to close on this basis.