There are 3 key dates set out in a purchase agreement: completion, possession and adjustment dates. The completion day is therefore the day that title transfers from the seller to the buyer in exchange for the purchase price. The possession day is the day that the buyer gets access to the property to move in, commence renovations or clean as desired. Possession is normally set at a particular time of day on the possession day – we often see noon as the time of possession. The adjustment day is the day that the lawyers use to make the adjustments between the parties for things such how much property tax or strata fees are attributable to the seller and how much is attributable to the buyer.
These can all be different days, but they are often the same day, or the possession day is often the day following the completion day. We prefer that the possession day be the day following completion so that the buyer is much less likely to be waiting on the driveway with their moving truck full and movers on the ready pending completion. Completion can occur well into the afternoon on the completion day, but when the possession day is the same day, the contract often states that possession is at noon that day. If the transaction has not closed, the buyer is rarely granted possession and must sit and wait for all the registrations and exchange of money or documents to occur. The most common delay is due to lenders not providing closing proceeds early on the completion day, and, of course, the seller does not want to grant possession prior to knowing the funds are at least at their lawyer’s office.
Some key considerations for a buyer from a lawyer’s perspective:
1. Make sure the completion day is on a weekday. Most law firms are closed on weekends so when setting a day, don’t blindly pick the last day of a month. Check to determine if that day is in fact a weekday.
2. Consider making it easy on all parties involved and have the possession day one day after the completion day. This reduces stress and drastically reduces the potential for conflict between buyer and seller on closing, and makes the lives of the lawyer and legal assistants more enjoyable.
3. Ensure there is enough time between the subject removal date and the completion date to allow for the lawyers to complete the paperwork. Removing subjects is only one step in the process, and the lawyers normally require at least 1 week and preferably as much time as possible to complete the paperwork.
4. Pick a closing date when you will be available to sign documents to complete. Planning a holiday immediately prior to moving in is ok, but you need to ensure you inform your lawyer and leave enough time to get documents signed up well before you leave. If you don’t, you’ll be seeking an extension or you’ll have to scramble to find a notary or lawyer at your holiday destination who can witness your signatures on closing documents, all at additional cost to you.