How to read a statement of adjustments

The adjustment date is the closing date. Under the standard Ontario agreement of purchase and sale, costs and income are shared to the closing date, and the closing day itself belongs to the buyer.

In this sample, the seller is responsible up to and including October 29, and the buyer from October 30 on.

The price in the agreement of purchase and sale, including any amendments. It’s money owed to the seller, so it’s a credit to the vendor.

Everything else on the statement adjusts this number up or down to reach the amount that is paid on closing.

Your mortgage and the real estate commission aren’t on this statement. I pay them out of the balance due on closing (see the last line).

The deposit you paid when your offer was accepted. It’s part of the price and you’ve already paid it, so it’s credited to you.

The buyer’s deposit. It’s credited to the buyer because it has already been paid toward the price.

The listing brokerage usually holds the deposit in trust until closing. It applies the deposit to its commission. The seller’s lawyer pays any commission still owing, or receives any surplus, on closing.

Property tax is billed for the calendar year, and each side pays for its own days. The seller has already paid more than their share, so the buyer pays the difference back through this credit to the vendor.

If the seller had paid less than their share, the difference would be credited to you instead, and you would pay the remaining bills for the year yourself. Your lawyer confirms the figures with a tax certificate from the City.

Tell me if you pay property tax by pre-authorized payments or through your mortgage. It affects how much you’ve paid, and pre-authorized payments must be cancelled after closing.

Condo fees are paid monthly in advance. The seller paid October’s fee, but the buyer owns the unit on October 30 and 31, so the buyer pays those two days back.

The status certificate confirms the monthly fee and whether the seller’s payments are up to date. Any special assessment is dealt with as the agreement provides, and if the seller is responsible for it, it appears here too. What the status certificate tells you →

The seller collected October’s rent on October 1. The buyer is the landlord on October 30 and 31, so the seller credits the buyer for those two days.

The tenant paid a last month’s rent deposit to the seller when the tenancy began. The buyer becomes the landlord and must honour that deposit, so the seller hands it over as a credit to the buyer.

Confirm the amount with the lease and a signed acknowledgement from the tenant before closing.

An Ontario landlord owes the tenant interest on a rent deposit every year, at the rent increase guideline rate. The seller owes the interest for the time since the last anniversary of the tenancy. The buyer will owe the tenant the full year’s interest at the next anniversary, so the seller’s part is credited to the buyer.

Buying or selling with a tenant in place? Read my guide to tenant-occupied homes →

The amount the buyer’s lawyer pays to the seller’s lawyer on closing. It’s placed in the purchaser column so that the two columns add up to the same total.

It isn’t the amount you bring to closing. Your mortgage covers most of it, and your lawyer adds land transfer tax, legal fees and title insurance on a separate statement. See If you’re buying below.

It isn’t the amount you receive. I pay your mortgage and the rest of the commission out of it first. See If you’re selling below.

The two columns always add up to the same amount. That’s the first check on any statement. If they don’t balance, there’s a mistake.