5 things to know when closing at the end of the month

Be prepared for Friday end of month closings

Friday June 29, 2012 was one of the busiest days of the year for most real estate lawyers. Real

estate closing days are already stressful occasions for buyers and sellers. However, when they are

scheduled for the end of a month, particularly a Friday before a long weekend, there are added

concerns for both buyers and sellers.

Most sellers will be using the closing funds either to pay for a home they are buying on the same

day, to discharge an existing mortgage, or both. Your lender will be giving you a mortgage

discharge statement in advance, to indicate what will be payable on your closing date, as well as

a per diem interest if they do not receive the money typically before 2 pm. Most law firms are

not able to deliver the mortgage monies to the lender in time, therefore, additional interest will be

payable. Since Monday July 2 is a holiday, sellers who sold on Friday, June 29 will have to pay

an additional 4-5 days’ interest, depending when the lender is paid.

If the seller is using the funds to buy a property, it sometimes happens that the buyer’s lawyer is

late getting the funds transferred to the seller lawyer. This can result in money not being

available for the seller to buy their property before 5 pm, when the government computer system

that registers titles closes down. As such, the buyer and seller lawyers will have to negotiate a

special escrow closing agreement, to permit the buyer to enter the home late on Friday evening,

with the understanding that all title documents will be registered first thing Tuesday morning.

Some sellers may try to use the late delivery of funds to try and get out of a deal. This is very

risky. Since most law firms are aware of the problem of late delivery of funds, it is usually not

possible for a seller to try and use this at the last minute as a reason to change their mind. They

would have had to communicate much earlier to the buyer that precise closing times would

matter to them. In a case decided in 2009, a seller tried to cancel a deal after the agent acting for

the lawyers could not register the deed before 5:00 pm. They were one minute late. The court

found that the seller was not acting in good faith in trying to cancel the deal because of the late

The next issue is the keys. Buyer lawyers are not permitted to release the keys to their buyer

clients until the registration of title or an escrow agreement, as described above, is complete.

This can also be very stressful, especially with Friday afternoon traffic. In one situation, the

buyer client was supposed to pick up the key from a builder seller from the sales office after the

deal was registered. The builder did not have the proper key available and the buyer had no

access to their home over the entire long weekend.

Key pick-up is something that buyers should discuss with their lawyers in advance of closing. It

is sometimes more convenient to have the buyer attend at the seller lawyer’s office to pick up the

key directly at closing. Real estate agents should also consider picking up keys on behalf of their

buyer clients at closing. It is my experience that those realtors who provide this service find that

their clients appreciate it very much. It makes one less thing to worry about on a very stressful

Sellers must also remember to vacate the property as soon as possible on the date of closing, and

to remove any junk that the buyer has not agreed to accept. Once title transfers, the seller should

be out of the house. If they are not out of the house and the buyer incurs extra moving costs

because of the delay, or additional costs to remove junk, then they can sue the seller for any of

these costs after closing.

There will be similar situations on the Fridays before Simcoe Day and Labour Day this year. If

you can avoid closing your deals on these days, it is best to do so. Being prepared for closing can

avoid a lot of unnecessary stress later.

Mark Weisleder is a Toronto real estate lawyer. Contact him at mark@markweisleder.com

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