Closing day marks the final step in buying or selling a home—when legal ownership of the property officially transfers. It’s when legal ownership of a property is officially transferred. After navigating BC’s fast-moving real estate market, you’ve finally made it to the end. Well, almost. Closing day is an exciting milestone, but it’s also one of the most legally complex stages of a real estate transaction. To the dismay of many buyers and sellers, even minor issues with financing, title, documentation, or scheduling can lead to last-minute delays. These delays create stress and irritation for all parties involved and can sometimes jeopardize the entire deal.
There is, however, good news: most of these problems can be avoided when parties are proactive and carefully follow the proper legal procedures. In this blog, we’ll outline five of the most common legal issues that delay closing in BC real estate transactions, and what you can do to prevent them.
1. Financing
Financing issues are one of the leading causes of delayed closings. According to Canadian Real Estate Magazine, these affect 35% of real estate closings. These complications generally fall into three main categories:
a) Financing hurdles
Even when a buyer’s been preapproved, lenders may request documents at the last moment or perform additional checks before releasing funds.
b) Payoff delays from existing lenders
If the seller still has a mortgage on the property, the lender must provide a “payout statement” confirming how much is owed on closing day. When the statement is either late or inaccurate, it can prevent the seller’s lawyer from discharging the mortgage and consequently delay the closing.
c) Property appraisal shortfalls
If the property appraises for less than the agreed-upon purchase price, the lender may refuse to finance the full amount of the loan. This can leave the buyer short on funds at a critical moment. In these cases, the buyer may need to increase their down payment, renegotiate the purchase price, or explore other avenues for financing.
Each of these represents a significant challenge in the closing process. There are, however, concrete steps you can take to prevent them:
- Get your mortgage approved early in the process.
- Avoid any major financial changes, including making large purchases and applying for new credit, prior to closing.
- When asked for documents, respond and submit them quickly.
2. Title and Registration Problems
Title and registration problems are another source of closing delays. Before ownership can officially transfer from seller to buyer, the property must have “clear title,” i.e., be free of liens, judgments, or legal claims.
These issues are more likely to occur in specific situations, such as older homes, properties that have transferred through estates, or newly constructed or renovated properties.
Common examples of title and registration problems include:
- Outstanding mortgage liens
- Informal agreements between owners that are not properly recorded on title
- Incorrect legal names listed on title
- Property or boundary disputes
Even a small administrative error can cause the Land Title Office to reject documents, leading to delays.
To avoid title and registration issues:
- Have your lawyer conduct a title search early in the transaction
- Resolve or discharge old charges before closing
- Confirm that all registered owners are available and authorized to sign the necessary paperwork
3. Strata Documentation
In BC, strata housing refers to properties where individual owners have exclusive ownership of their units (strata lots) but share ownership and maintenance responsibilities for common areas. This includes residential properties like condominiums, townhouses, and duplexes, as well as commercial and mixed-use developments.
When purchasing a strata property, buyers are expected to review a significant amount of documentation, such as bylaws, meeting minutes, financial statements, insurance certificates, etc. These documents are crucial because they could reveal issues that may have been missed earlier in the purchase process, including:
- Planned special levies
- Upcoming major repairs (e.g., roof replacement or plumbing upgrades)
- Restrictions on pets, rentals, or short-term use
- Insurance increases or claims history
Discovering any of these problems can lead to closing delays.
To avoid this risk:
- Carefully review the full strata documents
- Ask your lawyer to identify and explain any red flags before the deal is finalized
4. Damage to Property
Accidents happen. But what if the property gets damaged—whether from a leak, appliance malfunction, or weather event—before the buyer takes possession? Who covers the repair costs?
In BC, the seller is responsible for the property up until the property is transferred. This is reflected in the standard Contract of Purchase and Sale used in BC, which states that the property remains at the seller’s risk until completion.
To prevent any disputes that might arise out of damage to the property, buyers should:
- Do a walk-through to inspect the property before taking possession
- Document the property’s condition at the time the offer is made
- Address any issues in writing, and include clear timelines and expectations for repairs
5. Document Signing
Closing involves signing numerous legal documents, generally in the presence of a lawyer. If this step is postponed, or if one of the parties is unable to attend, this can result in delays.
The minimize this risk:
- Schedule your signing appointment well before the closing date
- If you plan to travel, tell your lawyer ahead of time and arrange for remote signing (where permitted)
Proactively Addressing Closing Issues Helps Streamline Real Estate Transactions
A successful real estate transaction rarely occurs without a few hiccups along the way. Whether it involves financing, title and registration, strata documentation, property damage, or document signing, there are many potential causes for delays at closing.
Fortunately, as we’ve shown in this blog, most of these issues are foreseeable. With careful attention to the details of the transaction—and the guidance of a skilled real estate lawyer—challenges can be identified and addressed well in advance. This proactive approach reduces stress, prevents last-minute surprises, and ensures the smoothest possible closing experience for both buyers and sellers.
Contact CM Lawyers for Trusted Real Estate Services in Vernon & Salmon Arm
The knowledgeable real estate lawyers at CM Lawyers understand the complex nature of buying and selling property in BC. understand that buying or selling property in BC is one of the most significant financial decisions you’ll ever make. From reviewing contracts and negotiating terms to resolving title issues and ensuring a smooth closing, our team is here to guide you through every step of the process.
With convenient locations in Vernon and Salmon Arm, CM Lawyers proudly represents clients in real estate transactions throughout Northern Okanagan and Shuswap. To schedule a consultation, please contact us online or call us in Vernon at 250-308-0338 or Salmon Arm at 250-803-9171.