If a closing does not happen on the agreed date, it is not automatically “delayed” — it is a breach of the agreement of purchase and sale. It only becomes a delay if both sides sign an amendment moving the date. Without that, the party who is ready to close can end the deal, keep or recover the deposit, and sue for what the failure cost them. In practice most closings that miss their date are fixed the same afternoon by agreement, but that agreement has to actually happen.
Why “time is of the essence” matters more than people expect
Almost every Ontario agreement of purchase and sale says time is of the essence. That phrase does real work. It means the closing date is a strict deadline, not a target. Missing it by two hours is legally the same as missing it by two weeks.
This surprises people, because in most of life a day’s slippage is nothing. In a real estate transaction it can hand the other side the right to walk away.
If you are the buyer and your money isn’t there
The usual cause is the lender. Mortgage instructions arrive late, a condition surfaces at the last minute, or funds simply are not released in time.
If you cannot close, the seller can choose to terminate. If they do, you can lose your deposit, and they can pursue you for their losses — the difference if the property later sells for less, plus their carrying costs, plus their legal fees. Those numbers can be far larger than the deposit.
Most sellers do not want that. They want to close. Which is why the first call is not to a lawyer to argue — it is to your lawyer to get an extension signed.
If the seller cannot close
It happens more than people think: a discharge not received from the seller’s lender, an estate matter unresolved, a tenant still in the property, a title problem found late.
Your options mirror theirs. You can terminate and recover your deposit and sue for your damages, or you can agree to an extension. If you have already moved out, given notice, or booked movers, those costs are part of what you have lost — keep every receipt.
How an extension actually works
An extension is an amendment to the agreement, signed by both buyer and seller. It is not a phone call, and it is not your agent saying it’s fine.
Two things usually get negotiated into it:
- A new closing date, often one to five business days out
- Compensation for the waiting party — commonly a per diem covering their mortgage interest, taxes and carrying costs for each day of delay
Neither is automatic. A per diem exists only if it is agreed and written down. This is the part that goes wrong when people try to handle it between themselves.
The end-of-day problem
Ontario land registration runs through Teraview, and it closes for the day. A transaction not registered before the cut-off does not close that day, no matter how close it came.
This is why a lender releasing funds at half past four can still mean you do not close, and why your lawyer starts pushing on the morning of, not the afternoon.
What to do on the day
- Call your lawyer first — before your agent, before the other side. What gets said in the next hour affects your position.
- Do not agree to anything verbally. An extension is only real when it is signed.
- Keep receipts for every cost the delay causes — accommodation, storage, movers, interest.
- Do not assume the other side will be reasonable, and do not assume they won’t. Most are. Plan as though they might not be.
When you need a lawyer, and when you don’t
Every Ontario purchase and sale needs a lawyer to complete — that part is not optional. But a closing delay specifically is where having one who answers the phone matters, because the window to fix it is measured in hours.
If both sides want to close and are simply waiting on a lender, this is usually paperwork and it gets solved the same day. If the other side has gone quiet, is refusing to sign an extension, or is threatening to terminate, that is a different situation and it needs advice immediately.
If you are closing on a property in Brampton or across the GTA and something has slipped, our real estate team can tell you where you stand. You’ll receive a response the same business day.