Terms that come up in your real estate home purchase or sale closing.
Condition Date/Day – The date by which the conditions for the buyer and seller must be met for the deal to proceed. In real estate, conditions may include obtaining financing and a property inspection approval. If these conditions are not waived or met by the respective condition date, then the contract effectively ends, and there is no transaction.
Closing Date – When the ownership of land is transferred to the new owner. The Transfer of Land is registered at the Land Titles Office. By this date, the payment of the purchase price needs to be fulfilled. At the closing date, the real estate transaction is considered complete. This is also, typically, the same date as the possession date. The Closing Date is not the day the conditions are removed which is called the Condition Date.
Completion Date – same as the Closing Date.
Possession Date/Day – When the physical possession of the property (through the transfer is keys) is transferred from the seller to the buyer. Keys are usually received between 12pm and 1pm. May also be the same as the completion/closing date and adjustment date.
Adjustment Date – This the date for which the property taxes and utility fees are adjusted, and based on the adjustment amount, the buyer or seller is required to credit the other party for the amount. This may or may not be the same date as the possession or completion or closing date.
Fixed Tenancy – This is a type of tenancy agreement when there must be a definite (fixed) start and termination date for the lease agreement. If it is ended prematurely before the fixed termination date, there may be legal repercussions.
Tenancy at Will – This tenancy agreement is not bound by a fixed termination date, and accordingly can be terminated at any time by either the tenant or the landlord. This may arise in situations when the tenant is in the process of purchasing the property, and receives possession before they are the legal owner.
Periodic Tenancy – For this tenancy agreement there is no fixed end date because it can be periodically renewed. To end a periodic tenancy, the landlord or tenants must give written notice to end the lease agreement. The amount of notice depends on the type of tenancy (i.e. weekly, monthly etc.).
Joint Tenants – Two or more individuals own an equal share of the property. All parties have the Right of Survivorship.
Tenancy-in-Common – Two or more individuals have shared ownership of property, however their interest need not be identical and undivided. Each of the owners of the property may gain interest in the property at different times. Co-owners do not have the right of survivorship, so upon their death, their interest in the property becomes part of their estate instead of being transferred automatically to the surviving co-owners.
Condominium documents – When purchasing a condo, these documents will be provided by the seller for your review. These documents will outline the operations of the condo corporation. Some of these documents include: the corporation’s current financial statement, insurance documents, management agreement etc.
Cash to Close – These are the funds the buyer pays on the closing date to the seller to “close” the transaction. This value is equivalent to the purchase price (less the down payment), closing costs, and any other deposits and credits.
Cash Shortfall – The difference between the purchase price and the proceeds of any new mortgage financing. Or your downpayment plus any closing costs.
Fixtures – Items that are affixed to the land that are considered part of the real property. If it cannot be removed without causing damage to the property, then it is considered a permanent fixture. When buying and selling property, fixtures come with the property.
Fee Simple – The highest form of property ownership available, and the closest thing to absolute ownership. The owner can control selling the property and how to use the property. In Canada, absolute ownership of land belongs to the Crown. Ownership can take the form of sole ownership, joint tenancy or tenancy in common.
The property rights that fee simple owners enjoy:
- The right to possess the land and to use it
- The right to lease the land
- The right to sell the land
Dower Rights – If the property owner is married and either spouse has lived in the property since the time of marriage, the non-owner spouse is entitled to property rights in the homestead, as per the Dower Act.
Leasehold Estate – When there is a lease agreement between the tenant and landlord. The tenant has the right of possession but must abide within the landlord’s guidelines set in the lease agreement.
Life Estate – A person is granted a life interest in the land, meaning that they have the right of exclusive possession to the property for as long as they live. Once the life estate is complete, the property is assigned to the fee simple owner.
Estoppel Certificate – When purchasing a resale condominium unit, this is an important document given from the condominium corporation to the potential purchaser. Through this document, the condo corporation is verifying certain facts to be true
Disbursements – These are costs incurred during the real estate transaction process, in addition to the legal fees. These costs relate to conducting the title search, the property tax search, the utility search, etc. These are costs paid by the solicitor on your behalf.
Real Property Report – It is a document that illustrates physical improvements to the property, such as a garage or fence, and it shows where it is located relative to the property boundaries.
Bareland condominium – This differs from the conventional condo ownership, because for bareland condos, the condo owners also own the lot on which the property sits. The owner of a bareland condo owns the property improvements on the lot, including landscaping and fencing.
