Possession Date vs Closing Date in a Manitoba Home Sale

An offer to purchase often lists more than one date. Buyers and sellers sometimes assume the dates are the same, and then are surprised when they are not.

This article explains in plain terms what each date generally means, why they can differ and what risks to think about. The wording of your offer controls, so have a lawyer read it before you sign.

This article covers the law of Manitoba.

What each date generally means

The closing date is generally the day the sale is completed, and exactly how the steps and timing work depends on your offer and your situation, so it is worth confirming them with a lawyer. The possession date is generally the day the buyer is entitled to move in and take control of the home.

These can be the same day, but they do not have to be. Your offer should state each date and any time of day, so there is no argument later.

On the legal side, registration is completed when the certificate of registration is signed or the data is accepted in the electronic information system, and it takes effect from the day the instrument is assigned a serial number. Registration is a separate event from handing over keys.

Why the dates can differ

• The seller needs extra time to move out after being paid.
• The buyer wants to get in early to prepare the home.
• Financing or paperwork takes longer than expected.
• There are tenants in the home who must receive proper notice.
• A condominium purchase is still within a cooling-off period or awaiting disclosure documents.

On a condominium purchase, the seven-day cooling-off period starts on the later of signing and the seller delivering the disclosure documents, and the buyer can cancel for any reason. A buyer can also cancel for a material change by midnight of the seventh day after the seller's written notice, but not after taking possession. Taking possession early can therefore affect your cancellation rights.

Risks if possession comes before closing

If the buyer takes possession first, they are living in or working on a home they do not yet own on title. If the sale then falls through, sorting out improvements, repairs, damage and costs can be hard. Insurance and responsibility for utilities and taxes also need to be settled in writing.

A buyer who takes possession of a condominium unit loses the right to cancel for a material change. Think carefully before accepting early possession in that situation.

Ask your lawyer whether an occupancy agreement should be signed, covering rent or occupancy charges, insurance, repairs and what happens if closing does not occur.

Risks if possession comes after closing

If the buyer closes first and the seller stays, the buyer has paid and owns the home but cannot use it. The risks include the seller damaging the property, not leaving on time, or disagreements about what is included. Buyers often ask for a written agreement covering how long the seller may stay, insurance, and what happens if they overstay.

Tenants add another layer. A landlord's notice of termination in Manitoba must be in the prescribed form and signed by the landlord. For termination because of a sale, a tenancy with no fixed end date and a vacancy rate of 3% or higher requires 1 month, while a rate below 3% requires 3 months, and a fixed end date means 3 months. For a mobile home site, notices of this kind must be at least six months, unless the tenant rents both the home and the site under a single agreement. For a fixed-term agreement, the termination is not effective before the fixed term's end date. During a school year, a tenant with a school-aged child living in the unit cannot be required to leave before the school year ends.

Those periods depend on the vacancy rate and the type of tenancy, so check the current figures with the Residential Tenancies Branch.

What to do next

• Read both dates in your offer and confirm the times of day.
• Ask what happens if either date has to move.
• Put any early or late possession arrangement in writing.
• Confirm who insures the home and pays utilities in any gap.
• If tenants are involved, ask your lawyer about notice before you set dates.
• Confirm key release instructions with your lawyer.

Frequently asked questions