Humber/Ontario Real Estate Course 4 Exam Practice

What is the primary reason the date of completion is used in real estate transactions?

1. It helps determine the seller's responsibility when apportioning costs.

2. It is frequently used as the date for reading water and utility meters to reduce adjustments.

3. It is a term often established exclusively by the seller.

4. It is the required date for the buyer to be given vacant possession of the property.

5. It aligns with the date for arranging mortgage payments.

6. It represents the finalization of the purchase agreement.

The correct answer is: It is frequently used as the date for reading water and utility meters to reduce adjustments.

The primary reason the date of completion is used in real estate transactions is that it is often the date designated for reading water and utility meters. This date is significant because it helps to establish a clear cutoff for calculating consumption and costs up to the point of transfer between the buyer and the seller. Accurate meter readings taken on the completion date ensure that both parties are appropriately billed for their respective periods of occupancy. By utilizing the date of completion for these readings, it simplifies the financial settlement process and minimizes disputes over the allocation of utility charges. This is especially important in transactions where utility costs may fluctuate significantly between the time of the contract and the time of actual ownership transfer. The correct understanding of this context is crucial for real estate professionals to facilitate smooth transactions and prevent any potential issues related to utility management after the property changes hands.