When entering into a contract of purchase and sale of property (either as a buyer or as a seller), there are generally three dates to keep in mind: the Completion Date, the Possession Date, and the Adjustment Date. I will examine each in further detail.
The Completion Date is the date the purchaser will become the registered owner of the property. That means all of the documentation has been executed, the bank has funded the mortgage loan, and the money is made available to the seller’s lawyer.
The Completion Date cannot occur on the weekend or on a holiday.
If you can help it, we strongly advise that you avoid agreeing to a Completion Date where you are traveling around that time. It can make executing documents quite difficult.
For the buyer who needs to move in a certain day, then have a slightly earlier Completion Date. When the buyer is obtaining home/strata insurance, make sure the insurance policy is effective as of the Completion Date.
For the seller who needs the funds from the sale at a specific time, then have a slightly earlier Completion Date. Although funds will be made available at the buyer’s lawyer’s office on the Completion Date, sales proceeds will normally be available to the seller 1-2 business days following the Completion Date. Do not expect to have the money in your hands on the Completion Date.
If you are buying a home and selling a home at the same time, we strongly advise that the Completion Date for your purchase and the Completion Date for your sale NOT fall on the same date. We advise that your sale complete at least 1-2 business days before your purchase completes.
The Possession Date is the date the Buyer has the right to take possession of the property.
The buyer normally makes arrangements with their realtor to pick up keys. If the buyer is purchasing a presale, the buyer normally makes arrangements with the sales office to pick up keys.
There is usually a one or two day gap between the Completion Date and the Possession Date. There is normally a set time on the Possession Date (ie. at noon) when the Buyer can take possession.
When the Completion Date and the Possession Date are the exact same date, there is usually not a set time at which the Buyer can take possession. It is usually when the buyer’s lawyer advises that registration of the transfer is complete. Registration is a day-long process, so expect possession to occur later in the day. Do not have movers arrive in front of your new home in the morning—they will just be sitting around.
The seller should cancel their home/strata insurance as of the Possession Date, particularly if the seller intends to live in the property past the Completion Date and up to the Possession Date.
The Adjustment Date is the date that certain costs are to be adjusted between the buyer and the seller. Everything before the Adjustment Date is the responsibility of the seller. Everything on and after the Adjustment Date is the responsibility of the buyer.
Costs that tend to be adjusted include, but are not limited to, the following: property taxes, city utilities, strata fees, rent (if the home has a tenant), damage deposits, and duplex insurance.
If you are selling your home and are making pre-authorized payments at City Hall for your property taxes on a monthly basis, please contact City Hall to cancel this service immediately.
All of these dates are negotiable. Make sure the dates make sense with your needs and realities. If you have any questions about this post, please contact Lewis Nguyen at lewis (at) dbmlaw (dot) ca or 604-937-6373.