What is an adjustment statement for closing?
Who pays what at closing? The adjustment statement decoded — no jargon, no surprises.
What an Adjustment Statement Is (Plain, Fast)
An adjustment statement is the final math sheet used on closing day. It shows who owes what and who gets credit for prepaid or unpaid items tied to the property. Think of it as the closing-day ledger: seller debits, buyer credits, and everything between.
For home sellers in Georgetown, ON, this document determines the money you receive at closing after prorating taxes, utilities, condo fees, rents, and any other items that cover a period before or after the closing date.
Why Every Georgetown Seller Must Understand It
If you’re selling a house in Georgetown, an adjustment statement removes costly surprises. It tells you:
- How much of the annual property tax you already paid that the buyer will reimburse you for.
- Which utilities or services are prorated.
- How prepaid costs or deposits are handled.
Make no mistake: a small math error on this sheet can cost you hundreds or thousands of dollars. Get this right and your closing is clean. Ignore it and you’ll be chasing money after you’ve moved.
What Usually Appears on an Adjustment Statement (Georgetown Focus)
The line items typically look like this:
- Municipal property taxes (Town of Halton Hills / Halton Region) — prorated to closing date.
- School taxes and any education levies — included in municipal taxes calculation.
- Water and sewer charges (if billed separately or by meter) — prorated or settled via final meter read.
- Utility accounts (electric, gas) — usually closed and adjusted separately, but sometimes included if the seller prepaids.
- Condominium fees (if applicable) — adjusted to closing date.
- Prepaid maintenance contracts, service agreements, or property management fees — prorated.
- Rents, security deposits, or tenant credits (if property is rented).
- Any credits for repairs agreed in conditions of sale.
In Georgetown, municipal property taxes are the big one. Even if the Town hasn’t issued the current year bill by closing, sellers commonly use the most recent tax amount and prorate by day.
How Prorations Work — Simple Example
Assume:
- Annual property tax = $6,000.
- Closing date = July 1 (out of 365 days).
- Seller is responsible for taxes from Jan 1 to June 30. Buyer pays July 1 to Dec 31.
Daily tax rate = $6,000 / 365 = $16.44/day.
Seller’s portion (Jan 1–June 30 = 181 days) = 181 × $16.44 = $2,974.
Buyer’s portion (July 1–Dec 31 = 184 days) = 184 × $16.44 = $3,026.
At closing the buyer will credit the seller $2,974 for the seller’s share of taxes already paid, and the buyer will assume $3,026 going forward. The exact wording depends on how your lawyer/notary prepares the statement.
Remember: all numbers are netted into the final statement so you see one final amount to receive or pay.
Who Prepares the Adjustment Statement?
In Ontario closings, the seller’s and buyer’s lawyers (or the buyer’s and seller’s conveyancers) prepare the statement, often based on figures you provide. Your lawyer will:
- Pull municipal tax records or use last year’s tax bill as a basis.
- Request final utility reads if needed.
- Confirm condo fees or other recurring charges.
Tip: give your lawyer clear documentation early. A missing bill is the most common cause of delays.
Common Adjustment Traps for Georgetown Sellers
- Using the wrong tax base: Use the most recent reliable tax number. If wrong, you’ll correct it later — that means effort and possible cost.
- Ignoring water or sewer billing cycles: Halton Region or local utilities may bill on unusual cycles. If you don’t confirm a final meter read, you might owe a bill after moving.
- Overlooking rental income or tenant deposits: If you had tenants, their rents and deposits must be accounted and often transferred to the buyer.
- For condos: failing to prorate special assessments or reserve fund contributions.
Fix these upfront and you avoid post-closing headaches.
A Realistic Walk-Through for a Georgetown Closing Day
- Your realtor and lawyer collect outstanding bills and any documents tied to the property.
- The closing statement is prepared using the closing date you picked.
- Your lawyer reviews line-by-line with you, highlighting credits, debits, and net proceeds.
- You sign documents and the buyer transfers funds.
- You move.
If there’s a dispute later, the adjustment statement is the record your lawyer uses to make corrections or to claim funds.
Practical Checklist for Sellers in Georgetown, ON
- Collect last year’s property tax bill and any recent interim notices.
- Request final meter readings for water (if metered) and other utilities.
- Provide records of prepayments, condo fees, or service contracts.
- Notify your lender and arrange discharge paperwork.
- Confirm moving day logistics, parking permits, and access for the new owners.
A well-prepared seller gets a clean closing and an on-time move.
How to Read Your Adjustment Statement — What to Double-Check
- Confirm the closing date used to calculate daily proration.
- Verify the tax amount used (is it last year’s bill or current estimate?).
- Check meter reads and utility account numbers.
- Ensure tenant rents and deposits are accounted if applicable.
- Look for credits owed to you (repairs paid, legal holdbacks).
If a line item looks off, speak up. It’s easier to fix before closing than after.
Why Local Expertise Matters — Georgetown Specifics
Georgetown sits in Halton Hills within Halton Region. Local billing cycles, municipal levies, and water services differ from Toronto or Mississauga. A local expert knows:
- Which municipal accounts combine taxes and special levies.
- Who bills for water and how final reads are handled.
- Local moving constraints (downtown Georgetown parking, Heritage area rules).
That local knowledge saves time and money. Don’t trust a generic out-of-town agent to handle these fine points.
Sample Quick Calculation (Numbers You Can Use)
Sale price: $700,000
Estimated closing adjustments: property tax credit to seller $2,975
Final realty commission and closing costs: $35,000 (example)
Mortgage payout: $310,000
Net proceeds before additional credits/debits: $352,025
This illustration shows how adjustments move around the final proceeds figure. Your actual numbers will vary.
Moving Tips for Georgetown Sellers (So You Don’t Wake Up on Day 1 Regretting It)
- Book local movers early, especially in spring and summer — Georgetown is busy.
- Reserve moving-day parking permits if needed in downtown or hilltop areas.
- Get a final meter read or photo of the meter on closing day.
- Keep one box with essentials and closing paperwork.
A smooth move complements a clean closing.
Closing Day: Who Signs What
Your lawyer handles the legal paperwork. You’ll sign documents that transfer title and authorize release of mortgage. The adjustment statement itself is a math appendix — it’s not the transfer of title, but it affects how much you receive.
Final Words — Protect Your Money and Time
An adjustment statement is not optional. It’s the math behind your payout. Know the line items. Verify the numbers. Use a local expert who understands Halton Hills and Georgetown billing quirks.
If you want a precise review of your adjustment statement before closing, I provide fast, local help that saves sellers time and money. Email tony@sousasells.ca or call 416-477-2620. Visit https://www.sousasells.ca for more resources on closing and moving in Georgetown, ON.
FAQ — Common Questions from Georgetown Home Sellers
Q: Who pays property taxes on closing day?
A: Taxes are prorated. If you paid the full year, the buyer credits you for the seller’s share up to the closing date. The buyer pays from the closing date forward.
Q: What happens if the Town of Halton Hills hasn’t billed for the year yet?
A: Lawyers typically use the most recent tax bill and prorate by day. Any later correction is handled post-closing between the parties, with lawyers adjusting if necessary.
Q: Are utility bills included in the adjustment statement?
A: It depends. Water or municipal utilities often appear. Electric and gas are usually finaled by the seller with a final read and billed separately, but discuss this with your lawyer.
Q: Do condo fees get prorated?
A: Yes. Monthly condo fees or special assessments are prorated to the closing date.
Q: How long does it take to finalize adjustments post-closing if numbers change?
A: Most corrections are resolved within 30–90 days. Lawyers exchange statements and settle via small payments if needed.
Q: What if tenants are involved?
A: Rents and deposits must be accounted for. The closing statement will credit the seller for rent received and transfer security deposits to the buyer.
Q: Should I ask for a holdback at closing?
A: If there’s uncertainty (unfinished repairs, unresolved bills), a buyer may request a holdback. Discuss with your lawyer to protect your funds while resolving the issue.
Q: Who do I call for local help with closing and moving in Georgetown?
A: For fast, local, and practical help with adjustment statements, closing math, and moving logistics in Georgetown, email tony@sousasells.ca or call 416-477-2620. Visit https://www.sousasells.ca.
If you want me to review a real adjustment statement line-by-line before your closing, send a scanned copy to the email above and I’ll get back within 24 hours.
