What Can Delay a Real Estate Closing in Ontario? 10 Common Causes

You have a moving truck booked, your fridge is packed in boxes, and you have already mentally placed the furniture in your new home. The last thing you want to hear two days before closing is "there might be a delay." Unfortunately, closing delays in Ontario real estate are more common than most buyers and sellers expect. Knowing what can go wrong — and acting on it early — is your best protection.

Here are the ten most common causes of a delayed closing, and what you can do about each one.

1. Mortgage Funding Delays

The lender's internal approval process has many stages: the commitment letter is issued, the mortgage documents are signed, the documents are returned, and then the lender must actually wire the funds. A bottleneck at any stage — missing conditions, a busy underwriting queue, or a technical issue — can push funding past the banking cutoff.

What to do: Confirm with your bank or mortgage broker, at least one week before closing, that all conditions are satisfied and that funding instructions have been sent to your lawyer's office. Do not assume your lawyer has the money until it is confirmed.

2. Title Defects and Outstanding Encumbrances

A title search may reveal problems the seller was not even aware of: old construction liens from contractors who were never paid, executions registered against the seller's name (judgment debts that attach to their property), survey discrepancies, or errors in prior deed descriptions.

Most title issues can be resolved, but some require time: paying out a lien, obtaining a court order, or getting the Land Registry Office to correct a registration error. If the issue is discovered close to closing, it may not be solvable in time.

What to do: Buyers should instruct their lawyer to begin the title search as early as possible — not the week before closing.

3. Lawyer-to-Lawyer Document Exchange Delays

The seller's lawyer and buyer's lawyer exchange documents — undertakings, mortgage discharge details, keys, the statement of adjustments — in the days leading up to closing. If one lawyer is handling a heavy volume of closings (common at month-end), responses may come in later than expected.

What to do: Use a lawyer with capacity and good communication practices. Ensure your lawyer has received all necessary documents from the lender (mortgage instructions) and the other side well before closing day.

4. Wire Transfer and Banking Cutoff Issues

As described elsewhere, bank wires have cutoff times. A buyer who initiates a large wire transfer at 4:00 p.m. may find that the funds land in the lawyer's trust account the following business day — too late for a same-day closing.

What to do: Initiate your wire transfer the business day before closing if possible. Always confirm wire details directly with your lawyer by phone, not email (to avoid fraud).

5. The Seller's Discharge of Mortgage Is Not Ready

When a seller pays off their mortgage on closing, the mortgage lender must issue a discharge of charge — a document that removes the mortgage from the property's title. Lenders typically do not prepare the discharge in advance; they wait until they actually receive the payoff funds on closing day, then process it over the following days.

This is handled through a lawyer undertaking: the seller's lawyer promises in writing to register the discharge once it is received. But if the seller's lender is slow to issue the discharge — which happens — it can technically hold up the title being fully clear, though in practice most closings proceed on the strength of the undertaking.

What to do: This is standard practice and your lawyer knows how to handle it. If your lender is known to be slow with discharges, your lawyer may request a payout statement and a signed discharge earlier than usual.

6. Status Certificate Issues (Condominiums)

For condo purchases, the buyer's lawyer must review a status certificate — a package of documents from the condo corporation that discloses the financial health of the corporation, any special assessments, pending litigation, and rules affecting the unit. If the status certificate arrives late, reveals a significant problem, or contains a pending lawsuit against the corporation, it may trigger delays.

What to do: Order the status certificate as early as possible after the agreement is signed. Condo corporations can take up to ten days to produce one (as of writing — verify the current timeline). The buyer's lawyer then typically has ten days to review it.

7. Unapproved Work or Outstanding Permits

If the seller has done renovations without permits, or if an open permit has not been closed and inspected, title insurance may cover you — but there may also be issues that require the seller to attend to before your lender will advance funds. Lenders want clear title, and some title insurers will flag open permits as a risk.

What to do: Your lawyer will identify open permits during the title search process. If one is found, negotiate how it will be resolved before closing.

8. Survey or Survey-Related Mortgage Conditions

Some lenders require an up-to-date survey showing the current boundaries and any encroachments before they will advance mortgage funds. If an older survey is on file and the lender rejects it, the seller may need to obtain a new one — which can take weeks and cost money.

What to do: Ask the seller early on whether a recent survey exists. Many buyers and lenders instead rely on title insurance in lieu of a survey, which is faster and often cheaper.

9. Builder Closing Delays (Pre-Construction)

Buyers of pre-construction condos and new home builds are subject to the builder's construction schedule, which almost always slips. Ontario's rules under the New Home Construction Licensing Act and the Condominium Act set out some protections and notice requirements, but delays of months or even years are not unusual.

What to do: Understand the firm occupancy date and outside closing date provisions in your agreement before signing. These can significantly affect your bridge financing needs and your existing home's sale timeline.

10. Chain Transaction Failures

In a chain (you are buying from Seller B, who is buying from Seller C), a problem at any link ripples through. If Seller C delays, Seller B may not complete your sale, causing a cascade.

What to do: Be aware of whether you are in a chain. Build contingency plans (bridge financing, temporary accommodation) in case the chain breaks.

Frequently asked questions