If you are buying a selling a home, avoid scheduling your closing date on September 30.
Anyone with a scheduled September 30 closing date on their real estate purchase or sale will have to change that date as the result of a new national holiday proclaimed in June.
Bill C-5 is an act to amend various pieces of legislation making September 30 every year a federal statutory holiday called the National Day for Truth and Reconciliation. The new law commemorates the history and lasting effects of Canada’s residential school system, and honours Indigenous survivors, and their families and communities.
The holiday was one of the recommendations of the Truth and Reconciliation Commission. It applies to all federally regulated public and private workplaces, including banks, airports, Canada Post, broadcasting and telecommunications.
With all the banks shuttered on September 30, closing any real estate transactions will be a problem.
Vaughan real estate lawyer Mark Weisleder told me last week that a number of his clients already had transactions scheduled for that date. “The end of the month is hard enough for real estate deals,” he said. “That fact that we have this additional holiday makes for more pressure to get everything closed the day before.”
Weisleder and his clients are going to have to move those closings to September 29 — not October 1.
All real estate contracts contain a “time is of the essence” clause which means that deadlines must be strictly adhered to, and cannot be extended without mutual agreement. Therefore, existing deals will have to be closed the day before the September 30 holiday.
Jeffrey Lem, Ontario’s director of titles who oversees the Teraview land registration system, emailed me last week to say: “The new holiday on September 30th … only applies to federally regulated employers which are subject to the Canada Labour Code. It will not apply to the Land Registry Office or the Teraview system, all of which is provincial.
“Unless Ontario subsequently adopts it as a statutory holiday, we will be open … Teraview will be up and running for registrations, which means closings can be scheduled for that day (funding might be another issue, but it is not my issue).”
Theoretically, closings can take place but with banks closed, cheques cannot be certified or deposited, and funds cannot be wired between law firms.
Lem said choosing September 30 “strikes me as a dangerous closing date to pick. Vendors will be in a position to tender a registrable deed (Teraview up and running), but purchasers will, at the very least, be inconvenienced by how to move money around on a day when the banks are closed.”
Closing real estate deals requires the ability to transfer funds and register documents. With one piece of the equation out of the picture, the system cannot function.
Theoretically, if a buyer’s cheques are certified or funds wired in advance of closing, transactions could be completed and registered on the holiday, but banks will typically not release mortgage funds a day early.
Hopefully buyers, sellers and real estate agents will mark the new holiday on their calendars so no transactions will be scheduled for a day when the banks are closed.
August 5, 2021Legal |