Closing funds in Ontario are the money your lawyer must hold, in final form, before your purchase can close: the balance of the price, land transfer tax, adjustments and fees, less any mortgage advance. Lawyers increasingly ask for a wire because a wire sent through Canada’s Lynx system is final and cannot be reversed, while cheques and bank drafts clear through a system where the bank can still take the credit back. If your money is coming from abroad, send it early, because banks can hold incoming international wires before releasing them.
This article draws on a LAWPRO presentation on “good funds” by Ray Leclair, LAWPRO’s Vice President of Public Affairs, at the Ontario Bar Association’s 2026 Ontario Legal Conference, checked against the Payments Canada Lynx By-law, the Law Society of Ontario’s by-laws and FINTRAC’s public guidance. Where we describe the speaker’s views, we say so.
Key Takeaways
- ACSS carries about 99% of Canadian payments by number, including cheques and bank drafts, and its credits can be reversed. A settled Lynx wire is final and irrevocable.
- “Good funds” means money your lawyer can safely pay out. A bank releasing a hold does not mean the money has settled.
- A Lynx wire has a Payment Confirmation Reference Number (PCRN) beginning with “LVTS”. The receiving bank must provide it on request.
- Wires from overseas pass through other banks and can be held. Build in extra days.
- Your lawyer must ask where the money came from. Keep the paper trail.
How are closing funds in Ontario paid on a home purchase?
On a typical Ontario purchase, your deposit is paid when the agreement is signed. Before closing, your lawyer sends you a statement showing the balance you must provide. You send that money to your lawyer’s trust account, your lender advances the mortgage to the same account, and on closing day your lawyer pays the seller’s side and registers the transfer.
The balance usually covers more than the price, including Ontario land transfer tax, adjustments and legal fees. Our step-by-step guide to buying property in Ontario covers the whole transaction. This article covers only how the money moves.
What is the difference between ACSS and Lynx?
ACSS (the Automated Clearing Settlement System) is Canada’s retail batch system for cheques, bank drafts, direct deposits, online transfers and debit payments. Lynx is the high-value system for wires. An ACSS credit can be reversed later; a Lynx payment is final once settled. Both are run by Payments Canada.
LAWPRO reports that in 2023 ACSS handled 99% of payments by number but only 8% by value, while Lynx handled 1% by number and 92% by value. With ACSS, your bank usually gives you credit right away, before the banks have settled. If the item is counterfeit or the payment fails, that credit can be taken back.
Lynx works differently. Under the Payments Canada Lynx By-law (Canadian Payments Association By-law No. 9, SOR/2021-182), section 33, a payment between banks is “final and irrevocable” once it settles through Lynx.
What does “good funds” mean for a real estate closing?
Good funds are funds your lawyer can pay out without any risk that the bank will later reverse them. On an Ontario closing, your lawyer pays out large sums the same day. If the money behind that payment is later reversed, the lawyer’s trust account is short and other clients’ money is exposed.
The speaker’s central point was that seeing money in an account is not the same as having good funds. LAWPRO’s guidance says a bank’s decision to release a hold, or not to place one, is a limit on the credit the bank is extending to its customer, not proof that the payment has settled. LAWPRO describes a significant claim arising from exactly that situation. LAWPRO’s view is that the only way to confirm a deposit is irrevocable today is to obtain the PCRN.
What is a PCRN and why does it matter?
A PCRN (Payment Confirmation Reference Number) is a unique code the Lynx system creates for each wire it processes. According to LAWPRO, it is 16 characters long and begins with “LVTS”. Its presence confirms the payment went through Lynx and is irrevocable. Under section 39 of the Lynx By-law, the receiving bank must give the PCRN to the payee on request.
The speaker’s practical complaint was transparency: bank portals often label a deposit “wire” without saying how it was sent, and banks do not always volunteer the PCRN. LAWPRO encourages lawyers to include the PCRN in the receipt they send when they wire funds. This is why your lawyer may ask for your wire receipt or call the bank before treating your money as available.
Why does my lawyer ask for a wire instead of a bank draft?
Many Ontario lawyers ask for closing funds by wire because a bank draft or certified cheque clears through ACSS and can be reversed if it turns out to be counterfeit or defective. A Lynx wire, once settled, cannot. Each firm sets its own policy, so ask your lawyer early which forms of payment they accept and by when.
Counterfeit certified cheques and drafts are a well-known fraud against lawyers. The speaker’s slides summarized the pattern as “cheque in + wire out”: a bad cheque goes into the trust account, money is wired out, and the deposit is reversed afterwards. LAWPRO’s coverage for this risk requires, among other conditions, a wait of several business days before relying on a draft unless the bank confirms it is valid. A draft delivered the day before closing may simply arrive too late.
Cash is more limited still. Under Law Society of Ontario By-Law 9, section 4(1), an Ontario lawyer cannot accept more than $7,500 in cash from a person on a single client file, subject to narrow exceptions such as cash from a bank or for legal fees. Do not bring cash to close a purchase.
Why would a bank hold a wire from overseas?
A wire from another country usually passes through one or more intermediary banks before it reaches the Canadian bank, and it may need currency conversion. The receiving bank may then hold it for its own checks before crediting it. Banks do not always explain a hold or say how long it will last.
Delays in wires and holds on trust funds were among the problems the speaker listed. Two points matter for buyers sending money from abroad:
- Banks have reporting duties. FINTRAC’s guidance says financial entities must report when they finally receive an international electronic funds transfer of $10,000 or more, and smaller transfers within 24 hours can be added together. Splitting a transfer does not avoid reporting and can look unusual.
- Arrival is what counts. Your lawyer needs to know when the money is in the trust account in usable form. Confirm whether they need Canadian dollars, and by when.
If you are not a Canadian resident, other rules may apply to the purchase itself, such as the federal ban on non-Canadians buying residential property. See our guide to buying property in Ontario as a non-resident.
What source-of-funds questions will my lawyer ask?
Your Ontario lawyer must ask where your closing money came from. Law Society of Ontario By-Law 7.1, section 23(2), requires a lawyer who receives, pays or transfers funds for a client to obtain information about the source of those funds. Expect questions about the account, the country and the person sending the money.
It helps to keep:
- statements for the sending account, in your own name where possible;
- records showing how the money got there, such as a property sale, savings or a gift;
- if a relative is helping, their details and any gift letter your lender requires (confirm with your lender).
These questions are part of the lawyer’s regulatory duties, not an accusation.
How can buyers sending funds from abroad avoid a closing-day problem?
Send your funds early, by wire, to an account whose details you have confirmed directly with your lawyer’s office, and keep the receipt. Confirm timing with your lawyer and your bank, because processing time differs between banks and countries.
- Ask your lawyer at the start how they want closing funds paid and the latest date they need them.
- Confirm the trust account details by phone, using a number you already have for the firm. Do not rely on changed banking instructions received by email.
- Ask your sending bank how long a wire to Canada usually takes and whether intermediary fees will be deducted.
- Send the wire receipt to your lawyer.
- If the money is in a foreign currency, agree with your lawyer and bank where it will be converted.
What changes when the Real-Time Rail launches?
Payments Canada says its new Real-Time Rail (RTR) is approaching launch in the fourth quarter of 2026. The speaker described it as expected to be irrevocable and available around the clock, with open questions about limits and what recipients will see. Ask your lawyer before using it for closing funds.
Frequently Asked Questions
Can I pay my closing funds with a bank draft in Ontario?
Some lawyers accept drafts, often with an earlier deadline so they can clear. Others require a wire. Ask your lawyer at the start of the file.
Why is my money showing in my lawyer’s account but they still say it has not cleared?
A credit is not always settled money. Unless the payment came through Lynx and your lawyer can confirm it, the bank may still be able to reverse it.
How long does an international wire take to reach a lawyer’s trust account in Canada?
It varies by bank, country and currency, and banks can hold incoming wires. Confirm with your bank and your lawyer, and send funds several days early.
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Disclaimer: This article is for general information only and is not legal advice. Ontario real estate, tax and estates law change frequently, and every matter turns on its own facts. Reading this article does not create a lawyer–client relationship. Obtain advice tailored to your situation before you act.
Talk to an Ontario lawyer. BridgePoint Law advises individuals and businesses across Canada — and on Canada–US–China cross-border matters — on Ontario real estate purchases and closings. Book a consultation with our team in Toronto and Kingston. We work in English, Mandarin, and Cantonese.
