What is a statement of adjustments in an Ontario real estate closing?

A statement of adjustments is a financial document prepared by the seller's lawyer in an Ontario real estate closing. It is a formal accounting that calculates how much money the buyer owes, or the seller receives, on closing day — after accounting for all prepaid amounts, outstanding amounts, and per diem adjustments between the parties.

The statement of adjustments typically shows the full purchase price as a starting point, then adjusts that amount up or down based on credits and debits between the parties. Common adjustments include property taxes, condo maintenance fees (on condo purchases), prepaid fuel oil or rent (for income properties), and sometimes utility deposits. Each item is calculated based on the closing date, splitting the cost fairly between the period the seller owned the property and the period the buyer will own it.

The result of all the adjustments is the net amount of money that needs to change hands at closing. Buyers receive the statement of adjustments from their own lawyer before closing and should review it carefully to confirm every line item is accurate. If anything seems off — a property tax figure, a condo fee amount — flag it with your lawyer before funds are exchanged.