How to Choose the Right Possession Day

How to Choose the Right Possession Date

Guest post from Peter Robinson of Navigator Law here in Calgary.

Article 4.1 of the standard AREA Purchase Contract permits the parties to the contract to select a “Completion Day”. I have a few suggestions for consideration when thinking about closing dates.

Sometimes we see contracts where the parties have selected a weekend or statutory holiday as the Completion Day. how to choose possession day

This can be problematic because these are normally bank holidays, and mortgage proceeds cannot be arranged for the purchaser on those days. This is typically resolved by a simple addendum to the Contract changing the closing date, or by the respective lawyers working out an alternate arrangement (usually by closing the Friday before the original closing date).

Movers, Deliveries and Other Things to Consider

In our experience, the most common closing dates are the Fridays around the middle of the month and the end of the month. Mondays are also a popular date. Since these are popular dates, clients may sometimes encounter difficulties in finding a mover available on those days, especially in the busier summer months.

The banks may also be overwhelmed with requests for mortgage funds on these bottle-neck dates, and there may be unexpected delays with closings. Couriers can be swamped with deliveries on the busiest days. For this reason, if you are flexible about your moving date, you may wish to consider a mid-week Completion Day.

Other dates you may wish to avoid include the week between Christmas and New Years. Some law offices are closed that week (we are available), and the banks may have limited hours that week too.

 The Last Alternative

If there is a delay from the mortgage lender and funds are not available on the agreed Completion Day, the purchaser might still take possession under article 4.6 in the Contract. The Seller may accept late payment of the purchase price plus late interest (normally prime + 3%).

Peter Robinson is a Real Estate Lawyer with Bodnaruk/Robinson LLP in Northwest Calgary. For more legal advice visit Navigator Law Calgary

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