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The importance of the notary in a real estate transaction

July 20 2016 by Multi-Prêts Hypothèques
What you'll learn
  • Understand the relevance of a notary in a property transaction
  • Promise of purchase
  • Title search
  • Bill of Sale

Congratulations, you’ve found your dream home! However, there are still quite a few steps to before you own the property. In Quebec, a notary must execute every residential real estate transaction.

Overview

Unless observed by a notary and executed in an authentic deed, the real estate mortgage is invalid. Not only will you be guided through the legal and financial complexities and requirements, you will have the certainty that the transaction will be difficult to dispute.

Your notary ensures that the format of the Bill of Sale and the mortgage comply with the law, while truly reflecting the intentions of each of the involved parties.

notary and documents

Choosing a notary and the promise of purchase

You’re better off consulting a notary before signing a promise of purchase for the property you have your eye on. You’ll therefore be able to benefit from the advice of a real estate law professional who will certainly be able to make recommendations regarding the document. 

The promise of purchase effectively binds you to the seller; you must therefore respect it. You will only be able to modify the terms or cancel it with the other party’s consent, which is why it’s worthwhile to consult a notary beforehand.

It’s also important to distinguish between a purchase assisted by a real estate broker, and a private purchase. For private purchases, consulting a notary before drafting a promise of purchase may be necessary. On the other hand, if a real estate broker is involved, the purpose of the consultation may be different.

Title search

Once the promise of purchase is signed, the notary examines the title deeds attached to the property (co-ownership declarations, easements and mortgage deeds from previous owners, and payment of property taxes and insurance coverage). This will prevent you having to cover school or municipal taxes left unpaid by the previous owners, and will guarantee that the property is free of any claims.  

The notary will also verify the certificate of location to ensure the house has been built on the right plot of land and that it is not affected by any inconsistencies with current regulations. If everything seems legitimate, the notary will then proceed to draft the deed of sale.

key in the door lock

Drafting the deed of sale

Once the required verification has been performed, the notary will prepare the documents you will sign. They will point out your obligations in regards to your mortgage lender, and will guide you through the financial aspects as well as the rights and responsibilities of each party involved in the transaction.

Registering with the registry office

Finally, it is the notary’s duty to take the money from the buyer and their lender to guarantee the mortgage balance payments and obtain the necessary releases to release the guarantee tied to the property. The notary can then register your notarized documents with the Quebec Land Register.

In addition to your Multi-Prêts broker’s advice, you can rely on a notary’s expertise to enjoy your new home with peace of mind. 

Brief summary, the notary: your key intermediary and ally

When buying a new home, your notary plays a critical role during the homeownership process. After the buyer and seller reach a mutual agreement, it’s now up to the notary to ensure all the paperwork (certificates, deeds, loans, etc.) related to the purchase are in order to finalize the deal. Your notary checks the validity of the terms and conditions of the contract, and will make any enquiries or any changes required by law to finalize the transaction. In the process, the notary becomes the key contact point for all parties in question, while staying impartial to both the buyer and seller – making sure both parties have knowingly and willingly entered into the agreement.

But perhaps more importantly, the notary is responsible for all monetary exchanges during your real estate transaction. They work closely with the mortgage lender to distribute any funds required to complete the transaction. Once finalized, the notary will usually distribute any monetary proceeds from the transaction to the buyer and seller within 48 hours.

Here’s a summary of tasks your notary will execute to complete the transaction:

  • Validate all the conditions of the purchase contract comply with all parties involved, including those made by the lender;
  • Prepare the deed of sale for signing;
  • Validate title deeds and acquired rights for the property in question;
  • Register all declarations of the transaction with the public land register;
  • Execute the distribution of all monetary transactions.
Key takeaways
  • All real estate transactions must be observed by a notary and executed in an authentic deed. Otherwise, they are invalid.  
  • The notary ensures that the intentions of each party involved in the mortgage transaction are protected.
  • It’s best to consult a notary before signing a promise of purchase. 
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