Article 4.1 of the standard AREA Purchase Contract permits the parties to the contract to select a “Completion Day”.
You may ask: why is this important to me?
At Navigator Law, we’ve come to recognize the ebb and flow of real estate transactions, and the inevitable repercussions of selecting certain days as your Completion Day. So, in order to avoid any unnecessary headaches and late payment fees, I have a few suggestions for consideration when thinking about closing dates.
- 1. Weekends or Statutory Holidays: Sometimes we see contracts where the parties have selected a weekend or statutory holiday as the Completion Day. This can be problematic because these are normally bank holidays, and mortgage proceeds cannot be arranged for the purchaser on those days.
> This is typically resolved by a simple addendum to the Contract changing the closing date, or by the respective lawyers working out an alternate arrangement (usually by closing the Friday before the original closing date).
- 2. Middle of the Month/End of the Month: In our experience, the most common closing dates are the Fridays or Mondays around the middle of the month and the end of the month. Since these are popular dates, clients may sometimes encounter difficulties in finding a mover who is available on those days, especially in the busier summer months. The banks may also be overwhelmed with requests for mortgage funds on these bottle‑neck dates, and there may be unexpected delays with closings. Couriers can be swamped with deliveries on the busiest days.
> For this reason, if you are flexible about your moving date, you may wish to consider a mid-week Completion Day.
- 3. Last Week of the Year: Other dates you may wish to avoid include the week between Christmas and New Year’s. Although the team at Navigator Law is available, some law offices are closed that week, and banks may be working under limited hours.
If there is a delay from the mortgage lender and funds are not available on the agreed Completion Day, the purchaser might still take possession under article 4.6 in the Contract. The seller may accept late payment of the purchase price plus late interest (normally prime + 3%).
> Again, if you are flexible, consider a Completion Day either before or after this time of the year.