When it comes to purchasing and selling a property, there are three important dates to consider: completion, possession and adjustment. Each date can be set at any time, as long as it has been agreed upon by both the Buyer and Seller.

The completion date is the date where the legal ownership transfer from the Seller to the Buyer occurs including the submission for registration of the transfer of the property. This is also the day that the money exchange between firms is completed, in most cases.

The possession date is the date on which the Buyer is entitled to obtain physical possession of the property. Depending on your contract, this may be a specific date and time or ‘upon registration’ and may be either vacant possession or may be subject to agreed tenancies.

The adjustment date is the date when the Buyer will take responsibility for taxes, rates, local improvement assessments, fuel utilities and all other charges/expenses/credits involved in that property.

A same day purchase and sale is likely to occur when the Buyer is relying on the sale proceeds of their sale property to purchase another property. Under the standard British Columbia residential purchase agreement, the Buyer has until 4:00pm to complete registration with the Land Title Office on the day of closing. The standard Canadian Bar Association undertakings (professional promises) in British Columbia require that the lawyer (or notary) has all funds in their trust account in order to submit documents for registration (less the mortgage proceeds for any new mortgage provided all lender conditions have been met, other than a satisfactory post search).

There are several moving parts to consider for a successful exchange of funds on the completion date:

• The Buyer’s lawyer/notary will often have until the end of the business day to deposit the purchase funds into the Seller’s lawyer’s/notary’s trust account (note, most banks are open from 9am to 5pm); and
• Once sale proceeds are received, the Buyer’s lawyer/notary must register the transfer, complete necessary post searches, issue relevant cheques and arrange for the deposit of funds to the Seller’s lawyer’s/notary’s bank to deposit the funds, before the transaction will be considered completed.

If the sale proceeds on a client’s same day sale are deposited into your lawyer’s trust account at 4:45pm, your lawyer faces a relatively restricted time frame to complete the above and successfully complete the purchase of the new property.

For this reason it is highly recommended that you stagger your completion and possession dates, to allow some wiggle room if there is a delay. By placing the completion date of your purchase one business day after your sale, you provide time to resolve potential complications and relieve stress for both you and your legal representative for completion of your purchase.  While it is not always possible to do so, we do recommend considering if this is an option for your transactions for a little peace of mind!

This information is general in nature only. You should consult a lawyer before acting on any of this information. This information should not be considered as legal advice. To learn more about your legal needs, please contact our office at (250)448-2637 or any of our lawyers practicing in the area of corporate law at the following:

Una Kuzio: una@touchstone.law