What’s the Difference Between the Completion and Possession Date?

In speaking with friends, colleagues, or even your Realtor, you will likely hear the terms ‘completion’ and ‘possession’ when discussing Real Estate. It is easy to think these terms are interchangeable and relate only to the move-in date, but they are in fact, entirely different from one another. Upon understanding the difference, you will see the strategy involved in choosing the dates and the importance of each one.

In its simplest form, the Completion date is the day that both the sale proceeds and title of the property change hands between buyer and seller. The Seller receives money from the Buyer, and, in exchange, the Buyer obtains legal title to the property.

In contrast, the Possession date is the move-in date or the date the Buyer is presented with the keys.

The importance of distinguishing the dates become apparent when you consider placing possession ahead of completion. If possession came before completion, the Buyer would be contractually entitled to keys before the Seller has received payment for their home.  If you think of yourself as a Seller – would you willingly hand over the keys to your home ahead of being paid? Probably not.

To ensure completion always comes before Possession, these two dates are usually staggered 1-2 days apart – so today could be completion, with tomorrow being possession. With a well-executed strategy, these two dates could fall on the same day, but ensuring the possession date has a time parameter (something like 5PM) to ensure enough time during the day for the transfer of funds and registration of title.

Aside from the transfer of funds and the registration of title, completion specifically speaks to the point at which a property shifts in legal liability.  In other words, on the completion date, the new Buyer is now legally responsible for the property – even though the keys are passed over on a subsequent day.

If for example, fire or flood occurred on the completion date, but the buyer scheduled their insurance policy to commence on the possession date – the day they officially move in – the home would remain uninsured – the new Buyer left wholly responsible for any damage.  Similarly, if an injury occurred on the property and the homeowners were sued, no insurance would be available to cover this – unless the policy was in effect on the completion day – ahead of the possession day.

The possession date provides further significance as it also signals the next opportunity for viewing your new home.  After a sale becomes ‘firm’ or ‘unconditional,' the Seller is not obligated to provide any viewing opportunities until the possession date, unless the contract paperwork states otherwise.

In re-sale properties, it is possible to insert a clause to create additional viewing opportunities between the unconditional date and the possession date; this can be helpful to measure for furniture, plan for interior design, measure, or give tradespeople access to develop quotations if looking to renovate.

It is not common to have regular access to pre-construction properties until the final walkthrough which is scheduled ahead of completion.  In the case of pre-construction contracts, it will be unusual to be permitted to insert a clause for additional viewing opportunities as there would be too much disruption to construction and too much risk due to the building activity.

Looking for advice on when your completion and possession dates should fall on? Our rennie advisors specialize in every neighbourhood across the Lower Mainland and can help you find the home best suited to you.

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