Real Estate Closings in Ontario: What Every Buyer & Seller Must Know

The Closing Process — Step by Step

1. Retain a real estate lawyer. As soon as an offer is accepted, engage legal counsel. Your lawyer reviews the APS, confirms conditions, and begins due diligence.
2. Title search. Your lawyer searches the title at the Land Registry to confirm the seller legally owns the property and to identify mortgages, liens, easements, or other encumbrances.
3. Requisitions letter. Your lawyer sends requisitions (requirements) to the seller's lawyer — typically requesting discharge of existing mortgages and confirmation of compliance with zoning by-laws.
4. Title insurance. Most buyers in Ontario now obtain title insurance instead of (or in addition to) a survey. It protects against defects in title, zoning violations, and various other risks.
5. Closing funds. Your lawyer calculates the final amount due — purchase price minus deposit, plus/minus adjustments — and arranges the certified cheque or wire transfer.
6. Closing day. Documents are exchanged electronically via Teraview. Your lawyer registers the transfer and mortgage, releases keys, and provides a reporting letter.

Closing Costs — Budget for These

Common Closing Day Problems

• Title defects — Liens from contractors, family court orders, or fraudulent prior transactions can delay or derail closings.
• Mortgage not approved — If financing conditions were removed too early, the buyer may be in breach of contract.
• HST issues — New construction purchases attract HST. Resale homes generally do not (subject to exceptions for commercial use, major renovations).
• Property condition issues — If significant undisclosed defects are discovered before closing, legal remedies include damages or, in rare cases, rescission.
• Requisition disputes — Sellers who cannot meet requisitions on time may need an extension or risk the deal collapsing.

Seller Obligations

Sellers must deliver vacant possession (unless tenants are part of the deal), discharge all mortgages and liens at closing, and ensure the property matches what was agreed to in the APS. Sellers must also complete the standard disclosure documents honestly.