Closing adjustments are final cost calculations between buyers and sellers to ensure each party pays their fair share of property expenses. At Khan Law, we ensure accurate adjustments for a smooth and transparent closing process.
Contact ▸When buying or selling property in Ontario, the final purchase price is often subject to what’s called closing adjustments. These adjustments ensure that both parties settle up fairly for any costs prepaid or incurred before the transaction officially closes.
At closing, the buyer provides a certified cheque for the remaining balance of the purchase price, but this amount is modified based on certain prorated costs that benefit one party over the other.
In resale transactions, sellers may have paid for services or utilities in advance that extend beyond the closing date. Since the buyer will benefit from these, an adjustment is made to reimburse the seller. Typical examples include:
These amounts are added to the buyer’s total closing costs, and the funds are paid directly to the seller.
At Khan Law, our real estate lawyers review each transaction carefully to ensure that closing adjustments are calculated fairly and transparently. We make sure no detail is missed, protecting your interests every step of the way.
When buying a newly built property, closing adjustments are often higher than those for resale homes. That’s because builders typically include extra charges that don’t apply in a standard resale transaction. These adjustments can catch buyers off guard if they’re not prepared.
Some of the common builder related closing adjustments include:
These additional costs can add up quickly at closing. To avoid surprises, it's important to review the agreement with your real estate lawyer early in the process. At Khan Law, we help buyers include clear caps on these extra levies so your costs stay predictable. Any capped fees should be clearly outlined in the agreement to avoid last-minute disputes.
The sale or purchase agreement will specify the outstanding balance on the closing date and the payment method. This balance can be paid in cash or by certified cheque. If paid by cheque, it must include all necessary adjustments that are due at the time of closing.
In the case of resale properties, certain costs that the seller has already prepaid will benefit the purchaser after the closing. These prepaid items are prorated and credited to the seller on the closing date. Common examples include prepaid property taxes, fuel oil (for homes with an oil furnace), and condominium fees.
Closing adjustments are typically higher for newly constructed properties compared to resale homes. These adjustments may include costs such as water and hydro meter installations, boulevard tree planting, gas water heater installation, and fencing charges. Many of these additional costs are specific to new builds and are settled at the time of closing.
At Khan Law, we truly understand that real estate transactions can be overwhelming. Our experienced real estate lawyers are here to guide you through the entire process, offering personalized solutions tailored to your unique needs.
We take pride in providing clear, compassionate advice that puts your best interests first. Whether you're a first-time buyer or experienced investor, we’re here to make sure you feel confident and supported.
Reach out today for a consultation we’re ready to help you achieve the best possible outcome, with a professional yet caring approach.
In Ontario, closing adjustments are handled by your lawyer to ensure all financial obligations between buyer and seller are fairly settled. At Khan Law, our team ensures every detail is accurately calculated and documented, protecting your interests throughout the transaction.
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Khan Law is a boutique law practice that has been providing legal services to the Greater Toronto Area since the year 2000.