WHAT HAPPENS ON THE DAY OF CLOSING?


When can we pick up the key? That is a common question for a home purchaser and the answer depends on what you are purchasing and whether you have to sell another home first.

Unless you have bought and sold several times in the recent past, or you work in the industry, you may not know what actually happens on the day of closing. There is a great deal that goes on from a legal and non-legal standpoint on this day. Your lawyer will complete some variation of the following;

1. Obtain certified funds for the purchase. Some of these probably come from a bank and the cheque has to be picked up from that bank,
2. Deposit these funds into their trust account, often at a different bank
3. Compete and certify the multiple cheques required for closing,
4. Attend at the Land Registry Office and completes the pre-closing searches,
5. Meet with the lawyer for the builder and exchanges documents,
6. Review the documentation for sufficiency and completeness,
7. Register the Transfer (and usually the mortgage) and then keys are released to you.

If you have a sale to complete your lawyer will have the added step of completing the sale. That means that the lawyer for the purchaser and your lawyer will exchange documents and basically all the steps listed above after the exchange. Your lawyer cannot proceed with the purchase until the sale has closed. One reason is that the funds from your sale are usually required for the purchase.

The other factor that can delay your closing is the Land Registry Office where your land is registered. Some Registry Offices are busier places than others. At month end your transfer will be one of thousands registered that day and everyone has to wait their turn.

The practice of how keys are passed to you also differs between builders. Some builders pass keys between the lawyers on closing which means that you have to make arrangements with your lawyer to pick up the keys from them. This can get tricky, as the Land Registry Office may not be near your lawyers' office. You should discuss these arrangements well in advance of the closing.

Most builders, however, will release keys at the new home site. Once the transaction has closed and registered the builders' lawyer contacts the new home site and the keys are released to you from there. This is the preferred arrangement, as you needed to go to the site anyway to move into your new home!

If you have any legal questions about the new home contract you should speak with your lawyer. Remember that no one but your lawyer is qualified to give you legal advice.

Bernie Jankowski practices real estate, corporate and estates law in Barrie, Ontario. If you have questions about this article or real estate law in general, write to That's The Law, c/o Toronto Sun, 333 King St. E., Toronto, M5A 3X5.

Email: bernie@bjankowski.com