Anyone who has a scheduled closing date of September 30th for buying or selling properties will have to change that date as a result of a new national holiday announced in June.
Bill C-5 is an act of amendment of various statutes, according to which September 30 of each year is an official federal holiday called the National Day of Truth and Reconciliation. The new law perpetuates the history and long-term impact of Canada’s boarding school system and honors Aboriginal survivors, their families and communities.
The holiday was one of the recommendations of the Truth and Reconciliation Commission. It applies to all federally regulated public and private enterprises, including banks, airports, Canada Post, broadcasting and telecommunications.
Since all banks closed on September 30, closing any real estate transactions will be a challenge.
Last week, Vaughn real estate attorney Mark Weisleder informed me that a number of his clients already had deals scheduled for that date. “The end of the month is quite difficult for real estate transactions,” he said. “The fact that we have this extra leave is causing more pressure to close the day before.”
Weisleder and his clients will have to postpone the closure to September 29, not October 1.
All real estate contracts contain a “time is of the essence” clause, which means that deadlines must be strictly adhered to and cannot be extended without mutual consent. Consequently, existing deals will have to be closed the day before the holiday of September 30th.
Jeffrey Lem, Ontario’s director of title, overseeing the Teraview land registration system, emailed me last week: “The new September 30th holiday … only applies to federally regulated employers who are subject to the Canadian Labor Code. It will not apply to the Land Registry Office or the Teraview system, all of which are provincial.
“If Ontario subsequently does not accept it as a statutory holiday, we will be open … Teraview will be launched for registration, which means it can be scheduled to close on that day (funding may be another issue, but not my issue).”
In theory, closings can take place, but when banks are closed, checks cannot be certified or deposited, and funds cannot be transferred between law firms.
Lem said the September 30 selection “seems like a dangerous closing date to me. Sellers will be able to offer the document to be registered (Teraview is up and running), but buyers will at least be uncomfortable with how to move money on the day the banks are closed. ”
To conclude real estate transactions, you need the ability to transfer funds and draw up documents. If one part of the equation is missing, the system cannot function.
In theory, if the buyer’s checks are certified or funds are transferred before closing, transactions can be completed and registered on a holiday, but banks usually do not issue mortgage funds a day earlier.
Hopefully, buyers, sellers, and real estate agents will celebrate the new holiday on their calendars, so no transactions will be scheduled for the day the banks close.