What Happens Between Offer and Closing Day in Ontario?

Quick Overview

Once an offer is accepted in writing, it becomes a binding contract called the Agreement of Purchase and Sale (APS)
Your deposit goes into a brokerage trust account and is credited to you on closing
Conditions such as financing, a home inspection or a condo status certificate have firm deadlines, and missing one can end the deal
Your lawyer searches title, sends requisitions, reviews your mortgage instructions and prepares the closing documents
Land transfer tax and legal costs are paid at closing, and Ottawa has no municipal land transfer tax
The standard APS treats closing time as essential. A missed closing can mean losing your deposit

The Offer Becomes a Contract

Contracts for the sale of land in Ontario must be in writing and signed by the party being held to them, under section 4 of the Statute of Frauds. In practice, that means the moment a signed offer is accepted, both sides are bound. Most residential deals use the standard form from the Ontario Real Estate Association, which sets out the price, the closing date, what is included in the sale, and the conditions.

The weeks that follow are quieter than the offer stage, but this is where deals most often run into trouble. A buyer who works with an Ottawa Real Estate Lawyer early has someone checking each step against the contract’s deadlines.

Market conditions affect how much room each side has. In September 2026, the average residential sale price in the Ottawa region was $685,640 and inventory stood at 4.8 months, according to the Ottawa Real Estate Board. With that much inventory, buyers often have time to arrange inspections and financing instead of rushing to waive conditions.

Your Deposit

The APS sets when the deposit is due. It is held in trust by the real estate brokerage, which acts as a stakeholder and not as an agent for either side. Brokerage trust accounts are regulated under the Trust in Real Estate Services Act, 2002, and RECO explains how TRESA applies to brokerages.

What happens to the deposit depends on how the deal ends:

Closing goes ahead. The deposit is credited to the buyer on the statement of adjustments.
A condition fails. If the buyer gives proper written notice before the deadline, the APS is void and the deposit goes back to the buyer. The brokerage typically needs a signed mutual release from both sides before it will pay the money out (Nanda & Associate Lawyers).
The buyer defaults. The seller can generally keep the deposit. Courts rarely step in. Under the two-part test from Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, a buyer must show that the forfeited amount is out of all proportion to the seller’s actual loss and that it would be unconscionable for the seller to keep it (Devry Smith Frank LLP).

If the seller sues for damages after a failed closing, the forfeited deposit is credited against the loss claimed. That was the outcome in Azzarello v. Shawqi, 2019 ONCA 820 (WeirFoulds LLP).

Conditions and Their Deadlines

Conditions let a buyer back out if something important is not confirmed. Common ones are mortgage financing, a home inspection and, for condos, a review of the status certificate.

Each condition has a date and time written into the APS. By that deadline, the buyer must either confirm the condition is satisfied or waive it in writing. If neither happens, the APS typically ends and the deposit is returned (Wagner Sidlofsky LLP). A deadline missed by an hour can matter as much as one missed by a week, so buyers should confirm the exact time with their lawyer.

Condo status certificates. For condominium purchases, the status certificate shows the corporation’s finances, any special assessments, legal proceedings and the unit’s fee status. Under section 76 of the Condominium Act, 1998, the corporation must provide it within 10 days of a written request and payment. The fee is capped at $100, including taxes, under subsection 18(4) of the Act (Condominium Authority of Ontario). Your lawyer reviews it before you waive the condition.

What Your Lawyer Does

Between signing and closing, your lawyer typically:

Searches title through Ontario’s electronic land registry to find mortgages, liens, easements and judgments registered against the property
Reviews the APS and any condo documents
Reviews your lender’s instructions and mortgage commitment
Sends requisitions to the seller’s lawyer asking for any title problems to be fixed
Prepares the statement of adjustments
Prepares the transfer and mortgage documents for electronic registration
Handles all funds through a lawyer’s trust account, which is governed by the Law Society of Ontario’s By-Law 9

Land registration in Ontario is done electronically under the Land Registration Reform Act. Paper deeds are not exchanged.

You will also need to prove your identity. Since January 1, 2024, a lawyer who verifies a client’s identity remotely cannot simply look at an ID on a video call. The Law Society now requires virtual verification with an authentication method, which uses technology to check that the ID is genuine.

Title Problems and the Requisition Date

The APS sets a requisition date. That is the deadline for your lawyer to raise title objections in writing. Problems that turn up in a search include old mortgages that were never discharged, construction liens, undisclosed easements or encroachments, and court judgments against the seller. If you object to a defect and the seller cannot or will not fix it, the standard APS lets the buyer end the agreement and get the deposit back (Wagner Sidlofsky LLP).

Money Due at Closing

Statement of adjustments. Costs like property tax, condo fees and utilities are divided between buyer and seller as of the closing date. The deposit is credited to the buyer. The result is the balance due on closing.

Land transfer tax. Ontario charges provincial land transfer tax under the Land Transfer Tax Act. The rates, as set out on the Ontario government’s calculation page, are:

Up to $55,000: 0.5%
$55,000.01 to $250,000: 1.0%
$250,000.01 to $400,000: 1.5%
$400,000.01 to $2,000,000: 2.0%
Over $2,000,000: 2.5%, but only where the land has one or two single-family residences. For all other property, the rate stays at 2.0% above $400,000

Toronto adds its own municipal land transfer tax on top. Ottawa does not (Government of Ontario). Eligible first-time buyers can claim a refund of up to $4,000, and the Ontario government lists the eligibility rules.

Closing Day

On closing day, your lawyer and the seller’s lawyer coordinate the transfer of funds and the registration of documents. Once the registration is complete, you receive the keys. You are entitled to vacant possession unless the APS says otherwise. If the seller has not moved out, the buyer can generally refuse to close or close and claim damages for costs like hotel stays and storage.

Most Ontario APS forms treat time as essential, and closing is commonly set for 6:00 p.m. A buyer or seller who fails to close on time may be in breach (McMackin Law). A seller who refuses to close does not automatically put the buyer in a position to force the sale. Under Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, and Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, there is no presumption that real property is unique, and a buyer asking for specific performance must also show that money damages would be inadequate (Semelhago; Southcott).

Ask your lawyer early about home insurance and who bears the risk of damage between signing and closing, so you are not working that out in the final week.

Having Legal Help in Place Before You Sign

The offer-to-closing period is full of dates that cannot be moved. LMS Lawyers acts as a Real Estate Lawyer Ottawa buyers and sellers can contact before an offer is signed, so the conditions, deposit terms and closing date are reviewed first and not after something goes wrong.

FAQs

Does the offer become binding as soon as it is accepted?
Yes. Once a signed offer is accepted, it is a binding contract. Any condition in the APS gives you a way out, but only if you act within its deadline.

Can I get my deposit back if my financing falls through?
If financing is a condition and you give proper written notice before the deadline, the APS is void and the deposit is returned to you. The brokerage will typically need both sides to sign a mutual release first.

How long does a condo corporation have to provide a status certificate?
Ten days from a written request and payment of the fee, under section 76 of the Condominium Act, 1998. The fee is capped at $100, including taxes, under subsection 18(4) of the Act.

Does Ottawa charge a municipal land transfer tax?
No. Ottawa buyers pay only the provincial land transfer tax. Toronto is the city that adds its own.

What happens if I cannot close on the closing date?
You may be in breach of the contract. The seller can usually keep the deposit and may also sue for further losses. Courts only return a forfeited deposit in exceptional cases.

Summary

After an offer is accepted in writing, the APS is a binding contract and every date in it matters. The deposit sits in a brokerage trust account. Conditions must be satisfied or waived on time, and condo buyers should review the status certificate, which the corporation must provide within 10 days. Your lawyer searches title, sends requisitions before the requisition date, reviews your mortgage instructions and prepares the closing documents. At closing you pay the balance due, provincial land transfer tax (with no municipal tax in Ottawa), and legal costs. A buyer who fails to close on time risks losing the deposit. LMS Lawyers can review your APS and manage these steps through to closing.

Sources

This article is intended for general information purposes only and describes federal and Ontario law as of October 2026. It does not constitute legal advice and does not create a lawyer-client relationship between LMS Lawyers and the reader. For advice specific to your situation, please consult a licensed lawyer.