When buying or selling a home in Edmonton, St. Albert, or Sturgeon County, understanding the adjustments on the closing statement is essential. These adjustments ensure that both the buyer and the seller fairly share costs and revenues related to the property up until the closing date. Below, we break down what these adjustments are, when they occur, and what you need to know as a homeowner or buyer in Alberta.
What Are Adjustments on the Closing Statement?
Adjustments are financial calculations made during a real estate transaction to ensure that both parties pay their fair share of property-related expenses. These expenses can include taxes, utilities, condo fees, or other ongoing costs that accrue before or after possession day.
The final statement of adjustments is typically prepared by the lawyers representing the buyer and seller. In Alberta, the adjustments follow provincial norms and are based on the closing date — the day the property officially changes ownership.
Common Types of Adjustments in Alberta Real Estate
- Property Taxes: Since municipal property taxes are often billed annually, the buyer and seller must share the cost depending on the date of possession. If the seller has prepaid taxes, the buyer reimburses them for the unused portion.
- Condo Fees: For condominiums, monthly maintenance or condo association fees may need to be adjusted if they are paid in advance.
- Utilities: Items such as water, gas, or electricity may be prorated, though often these are transferred directly to the buyer’s name at closing.
- Rental Items: If the property includes rented equipment like a hot water tank or security system, those charges may need adjusting or reassignment.
- Real Property Report (RPR) Costs: In Alberta, sellers are generally responsible for providing an up-to-date RPR, but occasionally an adjustment is made if one party covers extra expenses.
Who Calculates the Adjustments?
The adjustments are usually prepared by the lawyers or legal professionals handling the transaction. They confirm all costs associated with the home and prepare a final Statement of Adjustments, itemizing every expense and credit for transparency.
How the Statement of Adjustments Works
- The seller’s lawyer drafts an initial version of the statement, noting the purchase price and any credits or debits owed by either party.
- The buyer’s lawyer reviews the document to confirm all figures align with the purchase contract and community standards.
- Once both parties agree, the final statement becomes part of the closing documents, which both lawyers use to complete the transaction.
Regional Considerations in Alberta
In Edmonton, St. Albert, and across Sturgeon County, local municipalities may follow slightly different taxation schedules or utility billing systems. Buyers should confirm the applicable tax year dates and payment cycles with their local government office. For example:
- City of Edmonton tax payment information
- City of St. Albert property tax details
- Sturgeon County online tax and utility resources
Professional Guidance from Your Realtor
A qualified REALTOR®, as a member of the Canadian Real Estate Association (CREA), can help you navigate these adjustments by clarifying how they affect your closing costs. They can also recommend legal professionals familiar with the nuances of Alberta’s property laws.
Tips for Buyers and Sellers
- Review the statement of adjustments thoroughly before closing.
- Keep copies of all bills, tax receipts, and condo fee statements for reference.
- Ask your REALTOR® or lawyer to explain any unfamiliar charges.
- Ensure that all prepayments and deposits are accurately reflected in the statement.
Conclusion
Understanding adjustments on the closing statement ensures a smooth real estate transaction in Alberta. Whether you’re purchasing a downtown Edmonton condo or selling a country home in Sturgeon County, being aware of these financial details helps prevent future disputes and ensures transparency for both parties. Always work with a qualified REALTOR® and real estate lawyer to guide you through the process with confidence.
