Navigating the complexities of a real estate transaction starts with understanding these three crucial dates: Completion, Possession, and Adjustment. Here’s a breakdown of each term and how they affect your transaction.
1. Completion Date: The Day Ownership Officially Changes
The Completion date is when the legal transfer of ownership occurs. In British Columbia, this is also the day when the finances are settled: mortgage funds are advanced by the lender and money is released by the buyer’s notary to the seller’s notary.
On this day, your notary public will be working hard behind the scenes to ensure the transaction runs smoothly. Here’s what happens:
- Mortgage Funds: The buyer’s mortgage lender sends funds to the notary’s trust account.
- Registration: The notary registers the new ownership at the Land Title Office.
- Disbursement: The notary disburses the funds to the seller’s notary, who then pays off any outstanding debts, such as mortgages or taxes, and gives the balance to the seller.
- Realtor Payments: The buyer’s and seller’s realtors are paid their commissions.
It’s important to note that the Completion date is not when you can move in. It’s simply when the financial and legal ownership is transferred.
2. Adjustment Date: Managing Property Costs
The Adjustment date is all about ensuring that the buyer and seller fairly share property-related expenses. These typically include annual costs like:
- Property taxes
- Strata fees (for condos or townhomes)
- Utility bills
For example, if the seller has already paid property taxes for the year but the transaction is happening mid-year, the buyer will owe the seller a prorated amount for the time that the buyer will own the property. Your notary will handle these calculations and ensure they’re reflected on your Statement of Adjustments.
This date is important because it determines which party is responsible for various costs, preventing any confusion over payments. The buyer and seller will settle these adjustments before the completion of the transaction.
3. Possession Date: The Key Moment
The Possession date is when the new owner officially takes control of the property. This is when the buyer receives the keys, and legal access is granted. For the buyer, this is the exciting day when the hard work, paperwork and waiting finally pays off, and they can start settling into their new home.
For the seller, the Possession date marks the very last moment they can stay on the property. They are required to hand over the keys, ensuring that everything is in order and that the buyer can move in without delay.
A Helpful Tip for Simultaneous Buyers and Sellers
If you’re selling and buying properties at the same time, coordinating these dates is even more critical. Make sure that the Completion of the sale happens before you attempt to complete the purchase of your new home. This way, you’ll have the necessary funds to cover the purchase.
Example: If you’re selling a condo and buying a house, you’ll want to make sure your condo’s Completion Date is set before your house’s Completion Date. This ensures you have the proceeds from the sale to fund your new home purchase.
Final Thoughts: Get Professional Help to Stay on Track
Managing these dates and their implications is crucial to a smooth transaction. For first-time buyers or sellers, it can be overwhelming, but with the right team of professionals – real estate agents, and legal professionals (BC Notaries or lawyers) – you can stay on top of it all. Their guidance will ensure that everything happens in the right order, and they can help prevent costly mistakes or delays.
Quick Recap:
- Completion Date: When legal ownership transfers.
- Adjustment Date: When costs like taxes and utilities are split fairly.
- Possession Date: When the buyer moves in.
Understanding and managing these key dates properly will set you up for a seamless real estate experience, whether you’re buying or selling.