This paper presents the impact of the time duration taken to change the control mode of a microgrid from grid connected operation to islanded operation (control mode transition delay) on the stability of a microgrid. A detailed microgrid simulation model was developed and its frequency and voltage control was designed based on the most generic schemes identified after a profound literature survey on practical microgrids. The simulation study results revealed that the control mode transition delay has a significant impact on the amount of load that need to be shed to preserve the stability of the islanded microgrid. The control mode transition delay also has an impact on the power quality.