- In Ontario, real estate closings are almost entirely electronic.
- Soft delay: same day, within hours If the funds are expected but delayed, both lawyers will typically keep the transaction "on the wire" for as long as the registry office's closing…
The paperwork is signed, the moving truck is booked, and your lawyer says everything is ready. Then the phone rings: the funds have not arrived. Closing day funding problems are one of the most stressful — and surprisingly common — hiccups in an Ontario real estate transaction. This article explains why they happen, what happens next, and how to minimize your risk before that critical day.
How Money Moves on a Real Estate Closing
In Ontario, real estate closings are almost entirely electronic. The buyer's lawyer receives the mortgage funds from the lender and the buyer's own cash contribution (the balance of the purchase price after the deposit and mortgage), holds them all in trust, and then authorizes the electronic registration of title at exactly the moment the seller's lawyer confirms they have received the funds — or vice versa, depending on the agreed flow.
This "money and title at the same time" process is managed through the ELRS (Electronic Land Registration System) and coordinated wire transfers between law firm trust accounts. Because so many parties are involved — the buyer, the buyer's bank, the buyer's lawyer, the seller's lawyer, the lender, and sometimes a mortgage broker — there are several points where things can go wrong.
Common Reasons Funds Don't Arrive on Time
1. Bank wire cutoff times
Major Canadian banks have internal wire cutoff times, often between 3:00 p.m. and 4:00 p.m. for same-day settlement. If the buyer's bank processes the outgoing wire after that window, the funds land in the lawyer's trust account the next business day — after the planned closing date. Always ask your bank for the exact cutoff time for large electronic funds transfers, not just standard e-transfers.
2. Lender mortgage funding delays
Mortgage lenders fund through their own process: the mortgage documents must be signed, returned to the lender, and approved internally before the wire goes out. If there is any outstanding condition — insurance binder, updated pay stub, last-minute appraisal flag — the lender may hold funding until the condition is cleared. Even a one-hour delay can push a same-day closing into the next day.
3. Bank draft issues
Some buyers still bring certified cheques or bank drafts to their lawyer's office. A draft made payable to the wrong trust account name, or for the wrong amount, cannot be deposited and substituted quickly. This is another argument for confirming the exact payee name and amount with your lawyer at least two business days before closing.
4. Buyer fails to top up the balance
The adjusted balance due on closing (from the statement of adjustments) is rarely a round number. If the buyer wires the "purchase price minus deposit" and forgets that property tax adjustments added a few hundred dollars to the seller's credit, the lawyer receives less than needed. Even a shortfall of $50 can technically prevent completion.
5. Fraudulent wire instructions (mortgage fraud)
This is the most serious scenario. Email impersonation fraud — where a criminal intercepts your lawyer's email and replaces wire instructions with fraudulent bank account details — has occurred in Ontario. Always confirm wire instructions by phone using a number you sourced independently, not a number provided in the suspicious email. Call your lawyer's office directly.
What Happens When Funds Don't Arrive in Time
Soft delay: same day, within hours
If the funds are expected but delayed, both lawyers will typically keep the transaction "on the wire" for as long as the registry office's closing window allows. Ontario's electronic registration system has an end-of-day cutoff, and if the lawyers agree the money is genuinely on the way, they may agree to a short extension.
Closing does not complete that day
If funds cannot be confirmed before the registry closes, the closing does not happen on the agreed date. The consequences depend on who is at fault:
- Buyer's fault: The seller's lawyer will send a formal letter asserting the buyer is in default. The seller may be entitled to per-diem damages (interest on the purchase price for each day of delay) under the terms of the agreement of purchase and sale. In some cases, depending on the agreement's wording, the seller can treat the agreement as at an end and keep the deposit.
- Lender's fault: The buyer is still technically responsible to the seller, but may have a separate claim against the lender for causing the delay.
Closing extension agreement
More commonly, if the delay is short and both parties want to complete, the lawyers negotiate a closing extension — a short agreement that sets a new closing date, often the next business day, sometimes with per-diem compensation flowing to the seller. Both parties must agree in writing; the seller cannot be forced to extend.
Practical Steps to Prevent Funding Day Problems
- Confirm your wire amount at least 48 hours before closing — get the exact trust account details from your lawyer, then call the office to confirm them verbally.
- Initiate your wire the business day before closing if your bank allows it. Many do, and it eliminates same-day cutoff risk.
- Check your mortgage commitment letter for any outstanding conditions weeks before closing, not the day before.
- Ask your mortgage broker or bank what their specific funding cutoff is and what happens if closing gets delayed.
- Do not rely on e-Transfers for large sums — Interac e-Transfer limits and processing times are not designed for real estate transactions.
- Call — don't email — your lawyer for wire instructions. Phishing and spoofing attacks targeting real estate transactions are a known threat in Ontario.
Frequently asked questions
Can the seller keep my deposit if the closing is delayed because of a wire issue?
It depends on why the closing was delayed and what the agreement says. If the buyer is in default because funds were not delivered, the seller may have the right to declare the agreement at an end and retain the deposit. The exact outcome depends on the specific agreement language and the circumstances. Legal advice before assuming the risk is critical.
How long can a closing be extended?
There is no fixed legal maximum. The parties agree to whatever new date they can negotiate. If the seller is unwilling to extend, or if conditions attached to the original agreement (like a mortgage condition) cannot be met on the new date, the transaction may collapse.
Is my lawyer insured if there is a fraud on the wire?
Ontario lawyers carry mandatory errors and omissions insurance and participate in the Law Society's Compensation Fund. However, prevention is far better than a claim — confirm wire details verbally every time.
What is "per diem interest" on a delayed closing?
Per diem interest is a daily interest charge on the purchase price that the buyer may owe the seller for each day the closing is delayed past the agreed date. The rate is often specified in the agreement; if not, legal principles apply. It compensates the seller for being out of possession and out of their funds.
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