What you need to know about statement of adjustment

When selling a property in Mississauga, Brampton, or Toronto, one of the key documents prepared by the seller’s real estate lawyer is the Statement of Adjustments. This document acts as a balance sheet that lists all financial adjustments to the purchase price. Once these calculations are complete, the final amount that the purchaser must pay on closing can be determined.

How the Statement of Adjustments Works

In a typical real estate transaction, the seller’s real estate lawyer prepares the Statement of Adjustments to ensure both parties pay their fair share of property-related costs. The seller receives credit for the sale price and for any prepaid expenses that should be transferred to the buyer. For example, if the seller has already paid property taxes for the year and the buyer will own the property during part of that period, the seller will receive credit for the overpayment.

Buyer’s Credits and Adjustments

On the same statement, the buyer receives credit for payments made prior to closing, such as the deposit. The buyer may also receive credit for any outstanding payments the seller owes, including underpaid property taxes, utility bills, or other relevant expenses. Accounts related to tenants or rental income are also adjusted through the Statement of Adjustments to ensure that all financial responsibilities are fairly divided.

Why Legal Oversight Matters

Having a real estate lawyer review the Statement of Adjustments is essential for both buyers and sellers. This ensures that all costs and credits are accurate and that no expenses are overlooked. If you believe that certain costs were not properly adjusted or that you overpaid for specific expenses, it is important to consult a real estate lawyer in Mississauga. A qualified lawyer can review your closing documents, confirm that the calculations were done correctly, and protect your financial interests.