August 19, 2025

By Nick Melchiorre 

In Ontario real estate transactions, the closing date is one of the most critical aspects of any property sale or purchase. It marks the final stage of the deal, when the buyer is expected to pay the purchase price and the seller transfers ownership of the property. But what happens if a buyer misses the closing date? The consequences can be serious and understanding what to do in such a situation is crucial.

Understanding the Closing Date

The closing date is agreed upon by both parties in the agreement of purchase and sale. This date is when the buyer is expected to complete the purchase, including paying the remaining balance of the purchase price and finalizing other financial arrangements such as land transfer taxes. It is also when the seller is required to deliver possession of the property.

If the buyer does not meet this obligation on the agreed-upon date, the situation can lead to significant legal and financial consequences, as the agreement is legally binding.

As explained below, this date is a crucial part of the contract, and should be selected with care.

Consequences of Missing the Closing Date

1. Breach of Contract
   Missing the closing date is considered a breach of contract, which opens the door to legal consequences. The seller has the right to consider the transaction as void or to seek damages for the buyer’s failure to fulfill the contract. If the buyer fails to pay the purchase price on time, the seller can terminate the agreement and keep the deposit paid by the buyer.
2. Forfeiture of Deposit
   The deposit paid by the buyer is typically held in trust and is intended to show the buyer’s good faith in completing the transaction. If the buyer misses the closing date, the seller may have the right to keep the deposit as compensation for the buyer’s breach of contract. The amount of the deposit varies, but it is often a percentage of the purchase price. However, if the breach is minor or excusable, the courts might rule in the buyer’s favor, but this is not common.
3. Seller’s Right to Resell the Property
   In the event that the buyer misses the closing date, the seller is usually entitled to rescind the agreement and re-list the property for sale. The seller may seek a new buyer, and if the property sells for a lower price than the original sale, the buyer may be responsible for covering the difference. This scenario can lead to financial complications and potential legal action for damages.
4. Legal Action and Damages
   The seller can choose to take legal action against the buyer for the breach of contract. This could involve seeking damages for any losses caused by the delay, such as the costs associated with the delay in closing or any drop in the market value of the property. In some cases, if the seller suffers significant damages, the buyer may be held financially responsible.
5. Possession of the Property
   If the buyer fails to complete the purchase on time, they will not be entitled to take possession of the property. In some cases, the seller may even choose to evict the buyer if they had already taken possession. The buyer’s failure to close on the deal could also result in the property remaining vacant, which could lead to additional costs for both parties, especially if the deal was contingent on the buyer taking immediate possession.

Potential Solutions for Buyers Who Miss the Closing Date

If you, as a buyer, miss the closing date, it’s crucial to act quickly to avoid severe consequences. Here are some potential solutions:

1. Request an Extension
   If the buyer anticipates that they will miss the closing date, the first step is to request an extension from the seller. Often, sellers are willing to negotiate a short delay, especially if the buyer is close to securing the necessary funds. However, this requires the agreement of the seller and may involve an additional cost to compensate for the delay.
2. Seek Legal Advice
   If the delay was caused by unforeseen circumstances (e.g., financing issues, personal emergencies, etc.), seeking legal advice is essential. A lawyer can help determine whether the buyer has any legal recourse, whether they can argue for a reasonable extension, or if they can negotiate with the seller.
3. Provide Assurance of Completion
   In some cases, a buyer may be able to mitigate the situation by offering additional security to the seller. For example, the buyer could provide additional financial guarantees or a payment schedule to show the seller that they are serious about completing the transaction.
4. Alternative Financing
   Sometimes, the reason for missing the closing date is that the buyer has not secured the necessary funds or financing. If this is the case, the buyer may need to explore alternative financing options, such as obtaining a bridge loan, to ensure that they can meet their obligations.
5. Mitigating the Risk of Missed Closings in Future Transactions
   To avoid missing closing dates in the future, it is essential for buyers to take a proactive approach when preparing for a real estate transaction. This includes ensuring financing is in place well ahead of time, reviewing all contract deadlines, and considering the logistics of moving and possession in advance.

Takeaways

• The closing date is a crucial part of the agreement of purchase and sale, but is often not selected carefully
• Missing the closing date in an Ontario real estate transaction can have severe consequences, including a breach of contract, forfeiture of the deposit, and potential legal action.
• Buyers who will be unable to close on the closing date should act quickly by seeking an extension, negotiating with the seller, and consulting legal counsel to minimize the potential fallout.

How Weilers LLP can help you

Buying a home in Ontario involves several legal steps, from the agreement of purchase and sale to. By understanding your legal obligations and working with professionals such as the real estate team at Weilers LLP, you can navigate the process with confidence. Whether you’re a seasoned buyer or new to the market, ensuring that you meet all legal requirements will help make the sale as smooth and successful as possible. Give us a call and see if we are the right lawyers for you.