Statement of Adjustments

A Statement of Adjustments is a financial settlement document prepared by the buyer's and seller's conveyancing lawyer or notary public that itemizes the full breakdown of money owing at completion. It credits the buyer for the deposit already paid and adjusts for items such as prepaid property taxes, strata fees, and other costs that must be apportioned between the parties as of the completion date. The final balance shown is the exact net amount the buyer must deliver to their lawyer or notary before keys are released.

BC property taxes run on a January 1 to December 31 calendar year, and the adjustment date is typically the completion date of the sale. If the seller has prepaid the full year's property taxes and the completion date falls partway through the year, the buyer reimburses the seller for the portion of taxes covering the period from the completion date to December 31. Conversely, if taxes have not yet been paid and the seller has occupied the property for part of the year, the seller credits the buyer for that portion so the buyer can pay the full bill when it becomes due.

Under the Strata Property Act (SBC 1998, c. 43), strata fees are typically collected by the strata corporation on a monthly basis in advance. On the Statement of Adjustments, the seller is credited for any portion of the current month's strata fee that extends beyond the completion date, since the buyer will benefit from that prepaid period. The notary or lawyer calculates this daily-rate credit based on the strata fee amount confirmed in the Form B Information Certificate issued by the strata corporation.

In British Columbia, the Statement of Adjustments is prepared by the conveyancing lawyers or notaries public acting for the buyer and seller respectively — it is a legal document forming part of the conveyancing process. A licensed real estate professional regulated under the Real Estate Services Act (RESA) and overseen by the British Columbia Financial Services Authority (BCFSA) does not prepare the Statement of Adjustments, as that function falls within the authorized practice of lawyers and notaries. Licensees should direct clients to their legal representatives for any questions about the statement's contents.

Property Transfer Tax (PTT), levied under the BC Property Transfer Tax Act, is a buyer's obligation and is typically shown on the buyer's side of the Statement of Adjustments as a disbursement payable on registration. The current PTT rates are 1% on the first $200,000 of fair market value, 2% on the portion from $200,001 to $3,000,000, 3% on the portion above $3,000,000, and an additional 2% on the residential portion exceeding $3,000,000. Eligible buyers may qualify for exemptions such as the First-Time Home Buyers' Program (full exemption up to $835,000) or the Newly Built Home Exemption (up to $1,100,000), which would reduce the PTT line on the statement accordingly.

The adjustment date is the date used to calculate how prepaid and accrued costs — such as property taxes, strata fees, and utilities — are divided between buyer and seller, and in the vast majority of BC residential transactions it is set to the same date as the completion date specified in the Contract of Purchase and Sale. Occasionally parties negotiate a different adjustment date, but this is uncommon and must be clearly stated in the contract. The adjustment date effectively marks the point at which financial responsibility for the property shifts from seller to buyer.

If the strata corporation has approved a special levy under the Strata Property Act (SBC 1998, c. 43) that relates to a period before the completion date but has not yet been fully paid, the parties may agree in the Contract of Purchase and Sale that the seller's proceeds will be held back or that a credit will appear on the Statement of Adjustments to reflect the seller's share of that levy. The specific treatment depends on the terms negotiated in the contract and confirmed through the Form B Information Certificate, which discloses any existing or approved special levies. The conveyancing lawyer or notary will reflect the agreed-upon adjustment on the statement.

The deposit paid by the buyer — which under the Real Estate Services Act (RESA) and BCFSA Rules must be held in a brokerage's trust account until completion or other lawful disposition — appears as a credit on the buyer's side of the Statement of Adjustments, reducing the net balance the buyer must bring to completion. If the deposit was paid directly into the conveyancing lawyer's or notary's trust account as permitted by the contract, it is likewise credited on the statement. The remaining balance after applying the deposit credit, mortgage proceeds, and all adjustments represents the exact funds the buyer must deliver on the completion date.

Yes — both the buyer's and the seller's conveyancing lawyers or notaries exchange draft Statements of Adjustments prior to completion so each party can confirm the calculations and raise any discrepancies. Each lawyer or notary has a duty to their respective client to ensure the figures are accurate, including verification of the property tax balance, strata fee amounts, and any agreed credits. It is standard practice in BC for the statement to be reviewed and approved by both sides before funds are transferred on the completion date.

If the seller has prepaid any transferable insurance premium or home warranty coverage that extends beyond the completion date, the parties may agree that the buyer reimburse the seller for the unused portion on a prorated basis, and this credit would be reflected on the Statement of Adjustments. Whether such an item appears depends entirely on what the parties have negotiated in the Contract of Purchase and Sale and whether the relevant policy is actually transferable. The conveyancing lawyer or notary will include only those adjustments that are contractually supported and supported by documentation provided before completion.