Real estate transaction

Why do you have to go before a notary to buy a condo or a house?

In Quebec, it is mandatory to go through a notary to buy a house or a condominium and to grant security to the mortgage lender. The notary will review the offer to purchase to ensure that it complies with the wishes of the parties. By analyzing the chain of title deeds, the notary’s work will prevent you from being responsible for the mortgage debt of your seller, or previous sellers, and ensure that the seller is not selling a property that does not belong to him. By managing the sums of money through his or her trust account, the notary protects the sums of money of the stakeholders (buyers, lenders). Among other tasks, he or she ensures the validity of the various documents required such as the certificate of location, checks the payment of municipal and school taxes, and communicates with the co-owner’s syndicate to obtain useful information in the case of a condominium. Finally, the notary records the deed of sale at the Registry Office upon signing of the sale, to guarantee the buyer’s and lender’s rights.

Who chooses the notary?

The custom is that the buyer chooses the notary who will document the real estate transaction. However, in the case of a new condominium project, the notary is chosen by the promoter of the real estate project, in the preliminary contract, for reasons of efficiency and simplicity for the promoter.

The seller or buyer of a new condominium may, at his own expense and if he wishes, ask his notary or the notary of his choice to confirm the deed of sale prepared by the chosen notary.

Who pays the notary?

The buyer of a condominium or house pays the notary’s and legal fees related to reviewing the property’s title deeds, preparing the mortgage deed and the deed of sale, and registering them in the Land Registry.

The seller pays the notary’s and legal fees related to cancellation of his mortgage (discharge) as well as the services rendered to him at the time of the transaction. Cancellation of the mortgage (discharge) allows the seller to sell a house or condominium free of all charges and hypothecs, as required by the Civil Code of Quebec. Note that even if your bank or financial institution gives you a letter or receipt indicating that your loan has been fully repaid, you must still obtain a discharge of your mortgage and register it with the registry office.

The “price” of a notary for a real estate transaction

It is important to understand the difference between the transaction or legal fees, and the notary’s fees.

Disbursements or legal fees are the fees advanced by the notary to public or parapublic bodies such as the registry office, the municipality and the school board. Legal fees provide, among others, for accessing former titles, registering the deeds of mortgage and sale with the registry office, and checking property taxes. They also include, among others, the cost of consulting and copying the index of buildings, consultation fees of deeds in the land registry, fees for management of the notary’s trust account, etc.