Can I charge the buyer for a delayed closing?
Can I charge the buyer for a delayed closing? Read this if you’re selling a home in Georgetown — and you want to collect when the buyer runs late.
Quick answer — Can you charge the buyer for a delayed closing?
Yes — but only if your contract says so or you successfully claim damages after a breach. You can’t unilaterally impose new fees the day before closing. The smart move: build payment remedies into the Agreement of Purchase and Sale (APS) and use clear, enforceable language such as per-diem interest, liquidated damages, or rent-back agreements.
Why this matters for home sellers in Georgetown, Ontario
Georgetown (Halton Hills) is a commuter hub with rising buyer demand and tight timelines. Sellers here face real costs when a purchaser misses closing: mortgage overlap, storage, moving cancellations, and bridging finance. That’s not theoretical — it’s cash out of your pocket. A single delayed closing can cost thousands in penalties, extra interest, and stress.
If you’re selling in Georgetown, you must protect your bottom line. That starts in the contract and continues through closing day.
Ontario legal ground rules — what every Georgetown seller needs to know
- The contract rules. The Agreement of Purchase and Sale governs closing date, possession, deposits, and remedies. If a remedy to charge the buyer is not included, you cannot simply levy a fee after the fact.
- Time is of the essence. If the APS includes a “time is of the essence” clause, missing the closing date is a breach that allows the non-breaching party to seek immediate remedies. Without it, courts may allow short delays.
- Liquidated damages vs. actual damages. A liquidated damages clause sets a pre-agreed amount the buyer pays for breach (often limited to deposit). If you want per-day compensation, negotiate a per-diem clause or interest provision into the APS.
- Specific performance and lawsuits. You can ask a court for specific performance or sue for damages, but both are time-consuming and costly. Often the practical route is to negotiate an immediate settlement backed by the threat of legal action.
Important: This is practical guidance, not legal advice. Always consult your lawyer when enforcing contract terms in Ontario.
Concrete ways to make a buyer pay for a delayed closing
- Include a per-diem charge in the APS
- Wording idea: “If the purchaser fails to complete on the Closing Date, purchaser shall pay vendor $X per day until completion, payable to Vendor’s lawyers on closing.”
- Benefit: Predictable, enforceable, covers tangible daily costs.
- Add an interest-based clause
- Wording idea: “Interest shall accrue on the balance of the purchase price at X% per annum, calculated daily, payable by the purchaser for each day closing is delayed beyond the Closing Date.”
- Benefit: Scales with the sale price, ties cost to actual cash shortfall.
- Increase or stagger the deposit
- Make the deposit larger or include staged deposits. A higher deposit increases buyer skin in the game and gives you stronger immediate leverage if they delay.
- Tenant/rent-back or occupancy agreement
- If you need more time in the home, negotiate a rent-back with explicit daily rent and access terms. Cover utilities, insurance, and damage responsibilities.
- Liquidated damages clause
- Limit your damages to a clear, contractual amount (commonly deposit only). Useful if you prefer a clean, fast remedy rather than arguing actual loss.
- Holdback in trust
- Negotiate a small holdback with the buyer’s lawyer for potential closing-date issues. This requires agreement but provides instant cash to cover immediate costs.
What you cannot do
- You cannot retroactively impose fees that were not in the APS.
- You cannot withhold title or proceeds beyond what your lawyer advises.
- You cannot physically deny possession if the deed transfers but possession date differs — the contract controls possession.
How to calculate a reasonable charge for delays
Start from real costs, then add a buffer:
- Extra mortgage interest on your new purchase or lost rent you were expecting to start receiving.
- Moving/ storage re-booking fees.
- Temporary accommodation (hotel, short-term rental).
- Legal and bookkeeping costs to adjust closing paperwork.
Example: If extra mortgage interest and temporary housing cost $150/day in total, a per-diem clause of $150–$200/day is reasonable. For higher-value transactions, consider an interest clause at prime + X%.
Step-by-step action plan for Georgetown sellers when a buyer is late
- Check the APS immediately for a per-diem, interest, liquidated damages, or “time is of the essence” clause.
- Call your real estate lawyer and your listing agent. Don’t negotiate directly without counsel.
- Ask buyer’s lawyer for written reasons and a guaranteed new closing date.
- Demand compensation as per contract terms. If none exist, negotiate a short settlement (often cheaper than litigation).
- If you must move, document extra costs: receipts, invoices, re-booking charges, and communications.
- If the buyer refuses, consider issuing a Notice of Default or commencing a lawsuit. Discuss costs and likelihood with counsel first.
Sample per-diem clause (example wording to discuss with your lawyer)
“If the Purchaser fails to complete on the Closing Date, the Purchaser shall pay to the Vendor a sum of $200.00 per day for each day the Closing is delayed beyond the Closing Date, which sum shall be payable on or before completion and be in addition to any other remedies available to the Vendor.”
Note: Tailor the number to your actual expected losses and discuss enforceability with your lawyer.
Local tips for Georgetown sellers — reduce the risk of delay
- Verify purchaser financing early: get written confirmation from the lender and a firm mortgage commitment.
- Use experienced Georgetown lawyers who know Halton Hills municipal adjustments and local utility billing cycles.
- Coordinate closing with moving companies and new purchase closings — build 48–72 hours of buffer.
- If buyer is using a lender outside the GTA, expect slower bank instructions. Factor that into the contract.
When to be aggressive vs. when to negotiate
- Be aggressive when you have clear costs, alternative buyers, or a “time is of the essence” clause. Immediate remedies make negotiation realistic.
- Negotiate when the buyer’s delay is short, caused by a bank glitch, or when litigation costs would exceed your loss.
- Always quantify your loss before deciding.
Case examples (what sellers in Halton Hills actually do)
- Seller A included a per-diem clause and collected $1,000 for a five-day delay — enough to cover re-mortgage penalties and a storage unit.
- Seller B had no clause. The buyer was 10 days late and seller kept the 5% deposit and sued for additional costs. The case settled when buyer paid interest and covered seller’s legal costs. Results vary — court action can take months.
Contact a real estate expert who knows Georgetown
When you’re selling in Georgetown you need local eyes and a plan that protects your cash. Tony Sousa is a Halton Hills realtor with deep experience handling delayed closings, negotiated rent-backs, and APS clauses that hold buyers accountable.
Reach out for a no-nonsense contract review and closing strategy:
- Email: tony@sousasells.ca
- Phone: 416-477-2620
- Website: https://www.sousasells.ca
Legal notice: This post provides practical selling strategies and general legal context for Ontario contracts. It is not a substitute for legal advice. Speak with your real estate lawyer for binding contract language and enforcement steps.
FAQ — Delayed closings & the closing process in Georgetown, ON
Q: Can I charge the buyer if they miss closing without a clause in the APS?
A: Not immediately. You can pursue damages in court or negotiate a settlement. The quickest, most reliable path is to include remedies in the contract upfront.
Q: What is a reasonable per-diem rate?
A: Base it on your documented extra costs: mortgage interest, storage, temporary housing, and moving re-booking. In many Georgetown cases, $100–$300/day is used depending on transaction value.
Q: Does “time is of the essence” matter?
A: Yes. It makes the closing date critical. Without it, short delays are often tolerated by courts.
Q: Can I keep the deposit if the buyer delays?
A: You can try, but deposit forfeiture is a remedy for breach and may require legal steps. If your APS specifies deposit forfeiture for failure to complete, that strengthens your position.
Q: How long before closing should I confirm buyer financing?
A: As early as possible. Get lender confirmation once conditions are removed — usually 7–14 days before closing.
Q: Who pays adjustments and municipal charges on delayed closing?
A: Adjustments depend on your APS. If closing is delayed because of the buyer, you can negotiate that the buyer pays applicable adjustments for the delayed period.
Q: Should I include a rent-back clause if I need time after closing?
A: Yes. A rent-back creates a lawful daily rent and clear terms for possession. It’s far safer than an informal agreement.
Q: What local factors in Georgetown increase delay risk?
A: Commuter buyers with lender approval from out-of-town banks, municipal billing cycles in Halton Hills, and coordination with local closing lawyers can cause timing issues.
Q: Is litigation worth it for delayed closing costs?
A: Only if your documented losses exceed legal costs and you have a strong contractual basis. Often negotiation is the faster route.
Selling a home in Georgetown requires two things: rock-solid contracts and fast decisions when buyers slip. Protect your money before you list. If you want a contract checked or a closing-day plan tailored to Georgetown realities, contact Tony Sousa at tony@sousasells.ca or 416-477-2620.
