The usual reason why transactions don’t complete on time is that there are insufficient business days left to enable all that has to be done to be done. A major reason for this is that the Land Title Office in Alberta is not instantaneous, in that you cannot deliver a Transfer of Land to the Land Title Office in the morning and expect it to be registered that day.
Most Land Title Offices are generally up 10 business days behind. So, even when a Contract is written up allowing enough time, issues like the Land Title Office delays or the removal of a Subject To Condition can affect the ability to close the transaction on time.
The steps Steward Law Group takes to do everything we can to complete your transaction ON TIME:
- We review the Contract as soon as we receive it and calculate the number of business days to the Completion Date. We assume we will get the Lender’s Mortgage instructions in a timely manner and we also contact the Seller’s Lawyer to ensure there are no issues respecting getting documents signed.
- We then check with the Land Title Office to determine how many days behind they are.
- We normally allow 10 business days to prepare the Buyer’s documents, Lender’s documents, obtain the Seller’s documents and get the Transfer of Land to the Land Title Office PLUS the number of days the Land Title Office is behind to complete a normal transaction on time. This is known as the “Turnaround Time”. So, if the Land Title Office is 8 business days behind and we need 10 business days, there is a total of 18 business days neededTitle Insurance Closting. We also have to be aware that the Land Title Office delay can fluctuate up and down.
- So, if we find we have sufficient business days to complete on time, we would do a NORMAL CLOSING. We also do what we can to shorten the number of days we need so as to try to do a Normal Closing. However let’s assume we don’t have enough business days to complete on time; WHAT DO WE DO?
- We contact the Seller’s Realtor and the Buyer’s Realtor, explain the situation and see if we can get an extension of the Completion Date. If the Buyer and Seller are agreeable, the Contract will be amended to extend the Completion Date and all is good; the Real Estate Transaction will complete ON TIME using a Normal Closing.
- However, there are many instances when either the Seller or Buyer or both cannot agree to a change in the Completion Date or it is not practical for one of them to change the agreed upon dates; ie. the Buyer has to vacate the premises they are currently in and have to move into the Property on the Completion Date.
- If there is no Mortgage involved and the Buyer is paying cash for the Property, then as long as the Buyer’s cash is held with the Seller’s Lawyer, we can do a CASH CLOSING. The Seller will not receive their Sale Proceeds until the documents are registered and the Buyer will have to pay interest to the Seller on the Cash to Close. This type of transaction is the exception, so we will continue as if there is Mortgage financing involved.
The more usual transaction is when there is Mortgage financing and the Buyer has the Cash To Close. If registration takes place after the Closing Date, the Buyer will get possession of the Property and the Seller’s Lawyer will hold the Cash Shortfall. Once registration happens, the Mortgage proceeds will be advanced and paid to the Seller’s Lawyer and then to the Seller. Interest will usually be payable to the Seller in this situation. See Late Closings and Interest
Also, take a look at Time and Money to determine your interest costs and why it is likely in your interest to buy Title Insurance as set out below.
- We discuss with the Seller’s Lawyer whether they are agreeable to “close” the Real Estate Transaction by way of using the Protocol. The Protocol is available to close a Transaction provided the Buyer’s Lawyer and Seller’s Lawyer agree AND the financing for the Transaction is from a Protocol Lender. If the Seller’s Lawyer is agreeable to a Protocol Closing and the lender is a Protocol Lender, then, again, there is no issue and the Transaction will close ON TIME using a PROTOCOL CLOSING.
- However, if the Protocol Closing is not available, for whatever reason, then we explore with the Seller’s Lawyer and Lender whether we can complete the transaction using a Title Insurance Closing. If all parties are agreeable to a Title Insurance Closing, and the Buyer or Seller is agreeable to paying the insurance premium, then we proceed this way and the Transaction will close ON TIME using a TITLE INSURANCE CLOSING.
- If all of the foregoing methods fail, then the Transaction will not complete on time; however Jamie Stewart – Lawyer will have done everything they could have to assist our client in trying to complete the Transaction ON TIME.