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The statement of adjustments is the closing document a real estate lawyer or notary prepares showing the final amount a buyer owes on closing day, after crediting the deposit and prorating items like prepaid property taxes or condo fees between buyer and seller.
The statement starts with the purchase price, subtracts the deposit already paid, and then adds or subtracts prorated items the seller prepaid or still owes — property taxes paid in advance, condo fees, heating fuel left in a tank, or rent collected on an income property — so each party pays their fair share for the days they actually own the home.
The resulting balance is what the buyer’s lawyer or notary combines with the incoming mortgage funds and the buyer’s remaining cash to pay the seller on closing day.
Adjustments are distinct from closing costs like legal fees, title insurance, and land transfer tax, which the buyer pays regardless of what the seller prepaid, and from the interest adjustment date, which prorates interest on the new mortgage itself.
Prepared by the lawyer or notary: the buyer’s and seller’s lawyers, or the notary handling a Quebec file, exchange and agree on the statement of adjustments before closing.
Deposit is credited here: the deposit the buyer already paid on offer acceptance reduces the balance owed, rather than being paid again at closing.
Property tax proration is common: if the seller prepaid property taxes for the year, the buyer reimburses their share for the remaining period through the adjustment.
Separate from closing costs: adjustments settle amounts between buyer and seller, while closing costs such as legal fees and land transfer tax are amounts the buyer pays regardless of the seller.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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