Adjustments – What are the usual adjustments?

In most house resale transactions the only adjustment will be for property taxes and, in the case of a condominium apartment or townhouse, the monthly maintenance fees (also known as common expenses). Essentially, an adjustment is repayment to the seller for any amounts that the seller has paid relating to the period after closing. For instance if the closing takes place on April 15th and property taxes have been paid in advance by the seller to June 30th then the seller would be entitled to an adjustment in the seller’s favour of approximately 2.5 months taxes. Similarly, if the home being sold is a condominium apartment or townhouse, the maintenance fees are always payable on the 1st of the month. Accordingly, the seller would be entitled to reimbursement of approximately one-half a month’s maintenance fee. As a matter of law, the day of closing is the responsibility of the purchaser and not the vendor. Accordingly, in the example above the vendor would be responsible for payment of expenses for 14 days in April (from April 1st, to April 14th), and the purchaser would be responsible for 16 days (from and including April 15th to April 30th).

Other adjustable items include:

  • fuel oil
  • flat rate water bills
  • tenant’s current month rent
  • tenant’s last month rent