When you buy or sell property, one of the documents prepared by the solicitors is the Statement of Adjustments. This shows the calculations for any expenses above and beyond the purchase price itself that become factored into the final amount of money that will be transferred from the buyer to the seller to complete the purchase.
Property tax is the most common item found on the statement of adjustments. Property taxes are usually due on the first business day in July, but cover the calendar year, so depending on when the sale completes the property taxes may have been paid already by the seller (if the sale happens close to or after July), or they may be due in the future and will be paid by the buyer (if the sale happens before or in early June). The solicitors will ‘adjust’ based on the exact date of the sale for how much the seller or the buyer owes to the other party for the number of days that have already passed in the year and who will ultimately pay the property taxes. This will result in the buyer either paying more to complete the purchase (if the seller has already paid the property taxes and the buyer is reimbursing for some of that cost) or receive a credit and pay less than the purchase price (if the seller has not yet paid the taxes and the buyer will have to pay them).
Other common ‘adjustments’ include things like remaining fuel supply in a storage tank (for properties that have oil or propane furnaces), or credit for pre-paid equipment rentals (e.g. the seller had already paid for a 1 year contract for water supply that includes the rental of a reservoir tank).
Statement of Adjustments
Glossary Terms
AmortizationAppraisal
Assumable
Bank Statements
Blend and Extend
Blended Payment
Borrowell
Canada Child Benefit (CCB)
Closing Costs
CMHC
Co-Signer
Commitment
Conventional Mortgage
CRA Proof of Income Statement
CRA Statement of Account
Credit Bureau
Credit Karma
Debt-Service Ratio
Deposit for Property Purchase
Discharge
Equity
Financial Statements
First Time Home Buyer Programs
Fixed-Rate Mortgage
Foreclosure
Gross Debt Service (GDS) Ratio
Guarantor
High Ratio Mortgage
Holdback
Interest Adjustment Date
Interest Rate Differential (IRD) Penalty
Interim Financing
Joint Tenancy
Letter of Employment
Manufactured Home CSA Labels
Maturity Date
Mortgage Insurance
Mortgage Statement
Mortgage Term
Mortgagee and Mortgagor
Notice of Assessment
Open Mortgage
Pay Statement
Pay Stub
Payment Frequency
Porting
Prepayment Charge
Prepayment Privileges
Principal
Principal, Interest, Taxes (P.I.T.)
Property Tax Notice (Statement)
Refinancing
Renewal
Rent-To-Own
Statement of Adjustments
Statement of Disbursements
T1 General
T4 Statement of Remuneration Paid (slip)
Tenants in Common
Term
Total Debt Service (TDS) Ratio
Variable Rate Mortgage
Void Cheque