One of the first questions to your Builder is usually – When do I get to move in?
What is the Possession Date? Simply put, the Possession Date is the day the Seller (the Builder) is paid and the keys to your new home are released to you.
Depending on your purchase contract with your Builder, the Possession Date will be a fixed date that you know when you sign your purchase contract or, as is most often the case; your Builder will give you about 30-45 days written notice of the Possession Date.
Can your Possession Date change? Your Possession Date could change even if your purchase contract refers to a fixed Possession Date and even after you have received written notification of the Possession Date. There are usually clauses in the purchase contract that will allow your Builder to change the Possession Date in the event of circumstances that are beyond the Builder’s control such as weather and the availability of building materials. I have seen instances where the Possession Date remains as scheduled, where is delayed for several months, and where the Possession Date is sooner than expected. . It is important to have open communication with your Builder as to the progress of construction so that you can prepare for any delays and plan your move-in.
Your Possession Date may also be delayed because you do not have your financing in order. It is important that as soon as you receive written notification of your Possession Date, you notify your lawyer and your mortgage lender so that they can begin to prepare the necessary paperwork. If they do not receive sufficient notice, your mortgage funds may not be advanced in time for the Possession Date. Some Builders will not give you possession of your home until they have been paid in full. Other Builders, in some circumstances, may allow you to move in on the Possession Date even if they haven’t been paid in full. If you do not pay the Builder in full on the Possession Date, you may also be required to pay the Builder interest on the balance owing until you pay them in full.
Keep in mind that even if you have been pre-approved for your mortgage when you first signed your purchase contract or even if you have received a mortgage commitment, your mortgage lender may review your application once they have received the confirmed Possession Date. It is important to not do anything that may affect your credit between the time you sign your purchase contract and your Possession Date such as change jobs or obtain other loans.
What happens on your Possession Date? On your Possession Date, your lawyer, among other things, will pay the balance of the purchase price owing to the Builder’s lawyer. The Builder’s lawyer will then authorize keys to your new home to be released to you. You will usually receive the keys from your salesperson. When you receive the keys, you will do a final walk through of the home to note any deficiencies. You should inspect both the exterior and interior of the home. If you are dealing with a new home Warranty program, you will receive a Certificate of Possession which lists any noted deficiencies. Your Builder will usually rectify these deficiencies within 1-3 months.
In summary, in new home construction, the Possession Date can often change from what is originally estimated due to factors that are outside your Builder’s control. You should plan for any changes including your living arrangements and financing requirements. Don’t be afraid to communicate with your Builder throughout construction – your Builder is there to answer your questions and make your experience as stress free as possible.