No universal Canadian default answers this — the agreement itself has to say who carries the risk.
Short answer
There is no single rule that decides this for every deal. Whether the buyer or the seller bears the loss when a fire or flood damages the property between signing and registration “depends heavily on the specific wording of your agreement of purchase and sale and any gap or escrow closing arrangement” rather than on any general Canadian legal default. That is precisely why buyers are generally expected to have their own insurance in place from the moment they take possession, rather than waiting for registration.
Agents sometimes assume a fixed rule — "the seller carries the risk until closing" or "risk passes at acceptance" — but neither is a reliable universal answer in Canadian residential practice. your lawyer will need to review the specific insurance and risk-of-loss terms in the agreement to determine whether the party taking possession or the party still holding registered title bears responsibility, and how any available insurance proceeds get applied. That review has to happen on the actual document, not from a general rule of thumb repeated at the office.
This is also exactly the kind of gap that a rushed or boilerplate agreement leaves open. If significant damage happens in the window between an accepted offer and registration, the fact that "the agreement should have addressed this" is not much comfort after the fact — the time to confirm the wording is before the offer is signed, not after a fire.
Push every buyer to have their own insurance effective from the date they take possession, not from the date of registration — this is one of several reasons buyers are generally expected to have insurance in place and effective from the moment they take possession. If damage does occur before closing, tell both sides to get their lawyer and insurer involved immediately rather than trying to negotiate a fix directly — both the legal responsibility and the practical next steps depend on the specific paperwork, and that is not a call an agent should make alone.
A final-walkthrough discovery is the more common version of this problem in practice: a final walkthrough that turns up new damage raises the same "who bears this" question on a smaller scale, and it is worth having the same conversation with clients before the walkthrough, not during it.
See also: what counts as a chattel versus a fixture and a real final-walkthrough damage file.
A 30-minute call is enough to see where your own transaction workflow and client communication would hold up.
