- The closing date is whatever your signed agreement says, so the real timeline depends on that agreement and on what has to be cleared first.
- Tenants, mortgages, estates, spousal rights and tax issues are the usual sources of delay, and if you are a landlord giving a purchaser's-own-use notice, the termination date must be at least 60 days after the notice is given and must fall at the end of a rental period or, for a fixed-term tenancy, at the end of the term.
- If a deal collapses, the remedies differ depending on whether the buyer or the seller fails to close.
Once you accept an offer, the clock starts, but there is no one standard length of time for an Ontario sale. The closing date is set in your agreement of purchase and sale, and it can be short or long depending on what you and the buyer negotiated.
What matters more than the number of weeks is what has to happen before that date. This article walks through the usual steps, the issues that tend to slow a closing down, and what to do if a sale does not close.
Where the closing date comes from
The closing date is a term of the agreement you and the buyer signed. If the agreement has conditions, such as financing or an inspection, those usually have their own deadlines that come before closing.
If you think you may need more time to move or to clear a problem on title, raise it with your lawyer before you sign, not after.
What happens between acceptance and closing
- The buyer's deposit is normally held by the brokerage, and RECO's consumer deposit insurance covers up to $200,000 per claim.
- Conditions in the agreement are satisfied or waived. A buyer who gets an inspection may ask for repairs, accept the defect, ask for a lower price, or decide not to buy.
- Any mortgage on the property is a point to raise early, and how it is handled at closing depends on your situation, so it is worth confirming with a lawyer.
- Ownership changes and other dealings with land are registered electronically by authorized users, such as Teraview account holders.
The steps taken on closing day depend on your situation and your agreement, so it is worth going over them before that day arrives. Your lawyer can explain the sequence for your particular sale.
Common causes of delay
Most delays come from something that has to be cleared or approved before you can legally hand over the property. These are the ones sellers run into most often.
- A tenant in the home. A landlord who has agreed to sell a residential complex with no more than three residential units may give notice ending the tenancy on the buyer's behalf, but only if the buyer in good faith needs the unit to live in, and the termination date must be at least 60 days after notice is given. The same notice can be used for a condominium unit when the landlord is an owner under the Condominium Act, 1998 and has agreed to sell the unit. The selling landlord must also pay one month's rent in compensation or offer another unit.
- Your mortgage. A closed-mortgage prepayment penalty is usually the higher of three months' interest or the interest rate differential. Ask your lender for a written statement of the current charge.
- A spouse who has not signed. You may not sell a matrimonial home unless the other spouse joins in or consents, or another exception applies.
- A sale by an estate. If the deceased owned real property, the estate normally has to be probated.
- Unpaid taxes or liens. Unpaid property taxes are a special lien that ranks ahead of nearly every other claim.
- A non-resident seller. A non-resident seller must notify the Minister by registered mail within 10 days after the sale unless a notice was sent beforehand.
If the sale does not close
When a buyer fails to close, the seller's damages are measured as the difference between the agreed price and the price on the later resale. Where the seller has a resale loss, the buyer's forfeited deposit is treated as part payment and deducted from the award. You are expected to avoid losses that could reasonably have been avoided, but you do not have to accept a lower offer from the buyer who defaulted.
If a seller refuses to close, the buyer can ask a court for specific performance, an order forcing the sale. Outcomes depend heavily on the facts, so get legal advice early.
What to do next
- Read the closing date and every condition deadline in your agreement.
- Ask your lender for the written payout figure and any prepayment charge.
- Tell your lawyer about tenants, co-owners, a spouse, an estate or any known lien.
- Confirm whether you must report the sale for tax. A seller of a principal residence must report the sale and designate the home on Schedule 3.
- Note that a home owned for less than 365 consecutive days is treated as a residential property flip under CRA guidance.
Frequently asked questions
Can I choose any closing date I want?
The date has to be agreed in the contract with the buyer. Whether and how the date can be changed after signing depends on your situation, so it is worth confirming with a lawyer. Raise any timing concern with your lawyer before you accept an offer.
Does a tenant delay my closing?
It can. A notice ending the tenancy for a buyer's own use must give a termination date at least 60 days after the notice is given, and it must fall at the end of a rental period or fixed term. The landlord must also pay compensation or offer another unit.
Who holds the buyer's deposit until closing?
Deposits are normally held by the brokerage. If buyer and seller disagree over it, the brokerage can pay it out only under a mutual consent or release signed by both sides, or under a court order.
What if my mortgage costs a lot to pay off?
A closed-mortgage penalty is usually the higher of three months' interest or the interest rate differential. Ways to lower it include using yearly prepayment privileges, porting the mortgage, or waiting until the end of the term. An open mortgage can be broken without a prepayment penalty, though other fees may apply.
Sources
- Ontario.ca – Overview of the land registry — ontario.ca
- RECO – Consumer deposit insurance FAQ — reco.on.ca
- Court of Appeal for Ontario – Azzarello v. Shawqi, 2019 ONCA 820 — ontariocourts.ca
- Court of Appeal for Ontario – Dhatt v. Beer, 2021 ONCA 137 — ontariocourts.ca
- Ontario.ca – What to know before buying a home — ontario.ca
- FCAC – Mortgage fees: Prepayment penalties — canada.ca
- FCAC – Breaking your mortgage contract — canada.ca
- FCAC – Code of Conduct for Federally Regulated Financial Institutions: Mortgage prepayment information — canada.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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