Can I charge the buyer for a delayed closing?
Buyer Late to Closing? Make Them Pay — Here’s Exactly How Milton Sellers Turn a Delay into Compensation
Quick answer: Can I charge the buyer for a delayed closing?
Yes — but only if your contract says so or if the buyer has breached the agreement and you can prove losses. In Ontario, and here in Milton, you can negotiate a per diem fee, claim liquidated damages, accept the delay with a written amendment, or terminate and keep the deposit. The path you choose depends on your contract language, the reason for delay, and how quickly you act.
Why every Milton home seller must treat delayed closings like a business problem
A delayed closing costs you money. Moving truck re-bookings, temporary housing, mortgage rate changes, and storage fees add up. In Milton’s fast-moving market, delays also erase negotiating leverage. Treat closing dates like deadlines in a contract — not a suggestion.
The Ontario context (what Milton sellers need to know)
- Most residential sales use the OREA Agreement of Purchase and Sale or similar lawyer-drafted contracts. The exact wording controls rights.
- “Time is of the essence” is powerful: if included, it makes dates strict. If omitted, courts may allow brief grace periods.
- Remedies when buyers delay: claim damages, enforce liquidated damages (if included), seek specific performance (rare), or terminate and keep deposit for breach.
- A seller cannot simply invent a charge. Any fee must be tied to a clause or a written amendment agreed by buyer and seller.
5 immediate steps for Milton sellers when a buyer is late
- Confirm the facts — get the buyer’s lawyer to confirm the reason and expected new date in writing.
- Notify your lawyer and your listing agent — act through professionals to preserve evidence.
- Calculate actual costs you’ve incurred (moving, storage, temporary housing, extra interest) and preserve receipts.
- Review the contract for per diem, liquidated damages, or “time is of the essence” language.
- Decide: accept a short extension with compensation, demand strict performance, or terminate and keep the deposit.
How you can legally charge a buyer (practical options)
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Per diem (daily) fee
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Add a per diem clause in the contract or an amendment: a fixed amount per day until completion.
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Example: $200/day until closing. This must be agreed in writing.
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Liquidated damages
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Pre-agreed lump-sum damages payable if the buyer breaches. Must be a genuine pre-estimate of loss, not a penalty.
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Interest on unpaid portion
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A clause that the buyer pays interest on the unpaid balance at an agreed rate until closing.
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Holdback in trust
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With buyer consent, part of the funds or keys can be held in trust until outstanding issues resolve.
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Termination and deposit forfeiture
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If the buyer’s delay is a breach and you choose to terminate, you may be entitled to keep the deposit and seek other damages.
All of these require clear contract language or a written amendment signed by both parties and their lawyers.
Sample per diem math (real numbers Milton sellers can use)
Imagine sale price: $700,000. You choose $200/day per diem for every day after closing date. If buyer closes 10 days late: 10 × $200 = $2,000.
If you prefer a percentage method: 0.02% of purchase price per day = 0.0002 × $700,000 = $140/day.
Pick a method that is clear, reasonable and defensible if contested. Courts dislike punitive figures.
Negotiation script for your Realtor (direct and effective)
“We will accept a 7-day extension if the buyer agrees to a $250/day per diem starting day 8, payable at closing and subject to lawyer confirmation. If not agreed, we will treat the original closing date as time is of the essence and reserve all remedies including termination and deposit forfeiture.”
Deliver this through lawyers to avoid miscommunication.
Documentation and enforcement in Milton
- Always get amendments in writing and signed by buyer, seller and both lawyers.
- Keep receipts and invoices for any extra costs — these prove your losses.
- Your lawyer can draft a holdback agreement or file claims if the buyer refuses to pay.
- If negotiations fail, your lawyer can advise whether to sue for damages or seek specific performance. Litigation is slow and expensive; often a negotiated payment is quicker.
Prevent delays before they happen — contract items to include when listing
- “Time is of the essence” clause on closing date.
- A clear per diem or liquidated damages clause for delayed closings.
- Firm closing window (not a wide open date).
- Larger deposit (shows buyer commitment and increases seller protection).
- Proof of financing pre-approval and clear financing clauses.
- Occupancy or rent-back terms if you need flexibility.
These terms make buyers take the date seriously and reduce the chance of late closings.
Milton market realities that cause delays (and how to avoid them)
- Mortgage disbursement timing: encourage buyers to get lender timelines in writing.
- Lawyer/closing schedules: schedule closings earlier in the day, avoid Fridays or long weekends.
- Title or survey issues: clear these early in the process.
- New-build or assignment deals: these often have developer timelines—confirm developer closing procedures.
- Moving/logistics: require buyers to confirm moving arrangements and coordinate with their lender and lawyer.
Risks and pitfalls — what sellers must avoid
- Don’t take unilateral action without lawyer approval. You can’t just deduct fees from the deposit unless the contract allows it.
- Don’t accept vague promises. Get everything in writing.
- Don’t assume “time is of the essence” if it’s not in the contract — it might not be enforceable.
- Be careful with punitive numbers — courts reject penalties.
Local enforcement and costs — what to expect in Milton
Legal filings and small claims in Ontario can resolve monetary claims for delays, but net recovery may be less than legal costs. Your best route often is negotiation backed by an enforceable clause and a confident lawyer who will file a demand letter if needed.
Conclusion — Take control before the date slips
Don’t treat closing dates casually. In Milton, delaying can be expensive and avoidable. Use contract language, get lawyer support, and handle late buyers like you would a missed payment — quickly, firmly, and with documentation.
If you’re selling in Milton and want a pre-built closing protection plan, call Tony Sousa. He knows Milton, he knows the lawyers, and he’ll make sure your closing date is honored or properly compensated.
Contact: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
FAQ — Common questions about delayed closings (Milton, Ontario)
Q: Can I keep the deposit if the buyer is late?
A: Only if the buyer is in breach and you elect to terminate under the contract. You must follow the contract and provincial rules. Consult your lawyer before keeping any deposit.
Q: What is “time is of the essence” and why does it matter?
A: It makes contract dates strict. If the clause exists and the buyer misses the date, you can treat the delay as a breach immediately. Without it, courts may allow brief extensions.
Q: How much per day can I charge for a delayed closing?
A: There’s no fixed Ontario rate. Reasonable per diem amounts or a small percentage of the purchase price are common. Make it reasonable and clearly written. Consult a lawyer to avoid a penalty clause.
Q: Can I force the buyer to complete even if late?
A: You can sue for specific performance, but courts grant specific performance sparingly in residential sales. Usually you negotiate compensation or terminate.
Q: What if the buyer’s financing falls through causing delay?
A: If financing was a condition and the buyer cannot waive it, they may be protected. If financing was removed and then fails, that’s a different situation and may be a breach.
Q: Should I add per diem language to my listing contract?
A: Yes — it gives you leverage. Work with your Realtor and lawyer to draft a fair, enforceable clause.
Q: Who enforces these charges?
A: Your real estate lawyer enforces contract terms, issues demand letters, and, if needed, sues for damages in Superior Court or Small Claims depending on the amount.
Want a Milton-ready closing strategy tailored to your sale? Reach out: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
Tony Sousa — Milton real estate expert. Practical, direct, results-focused. No jargon. Just action.
