PRESS RELEASE
FOR IMMEDIATE RELEASE

Booming real estate market

Buyers and sellers must fully understand the importance of their rights and the consequences of a hasty purchase

Montreal, January 25, 2021 – The real estate market has been booming for months. Given the eagerness of some buyers when facing multiple offers or finding a dream home, the Chambre des notaires du Québec and the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) are joining their voices to remind buyers of the consequences of waiving rights by hastily signing and accepting an offer to purchase.

Several protections for buyers and sellers

In a market where there are many buyers for the same property and where there is growing pressure to close transactions quickly, it is tempting to speed up the process in different ways, especially by ignoring steps that provide security that can be necessary for the buyer in the long term.

Waiving these steps can quickly raise concerns for consumers and have serious consequences, especially financially. It is particularly important to be properly advised and, above all, to be informed about the scope of guarantees and other mechanisms, as well as the consequences of waiving them.

“Despite today’s booming real estate market and the pressure to quickly conclude transactions that may arise therefrom, brokers must ensure that they comply with their ethical duty to advise and inform their clients under all circumstances to protect them. The OACIQ, which oversees their activities, does not tolerate the insistent behaviour of a few brokers who may reduce the legal protections offered to consumers in real estate transactions,” says Caroline Champagne, Vice-President, Enforcement of Practices at the OACIQ. "The deadlines set out in the promises to purchase for fulfilling inspection, financing or other conditions must be long enough to allow the professionals involved in the transactions to provide quality services, and thus help reduce the risks associated with the real estate transaction, which is often the most important transaction in a person's life. Brokers must make every effort to ensure that their clients make appropriate decisions with full knowledge of the risks that may arise from hasty transactions. Otherwise, measures can be taken, up to and including the filing of a disciplinary complaint."

For some time now, the Chambre des notaires du Québec has been seeing an increase in the number of buyers who come to the notary to complete the deed of sale, with waivers of their rights in order to speed up the process. "We are concerned about the situation and wish to reiterate the importance of carrying out each step of a process, which is just as important as the purchase of a property, with full knowledge of the facts. Buying a property is always a big decision, sometimes filled with emotion or excitement, but this decision must be made in an informed manner. It is essential to fully understand the legal scope of our choices from the moment we make an offer to purchase,” says Me Hélène Potvin, President of the Chambre des notaires du Québec.

Three major tools to understand

Inspection: The OACIQ points out that a pre-purchase inspection will allow us to learn more about the condition of the desired building and to identify any problems affecting the building or any necessary repairs to be performed. Under the Real Estate Brokerage Act, a broker must recommend that you have the property thoroughly inspected by a professional or a building inspector who meets certain requirements, in addition to informing your client of the consequences of a waiver.

If the property is being sold without legal warranty of quality, i.e. without any guarantee that it is free of defects, the inspection becomes even more necessary.

The certificate of location: Based on case law, the Chambre des notaires recommends that an up-to-date certificate of location, describing the current state of the building and dating back no more than 10 years, be provided to the buyer by the seller. This document, consisting of a report and a plan, states the land surveyor's opinion on the current situation and state of a property in relation to ownership titles, the cadastre, the laws, regulations and by-laws which may affect it. 

The real estate broker must ensure that the client obtains a recent certificate of location and inform him or her of the consequences of waiving it. In addition, obtaining title insurance does not in any way release the seller from his obligation to provide an up-to-date certificate of location, whether or not the purchase of the property is financed by a loan secured by immovable hypothec.

Legal warranty: The legal warranty includes both the warranty of quality and the warranty of ownership.

The warranty of quality concerns hidden defects. In the real estate industry, this is a defect that affects a building. It could be, for example, a problem with the foundation that was not apparent or known to the buyer but existed at the time of purchase.

The warranty of ownership concerns any defects affecting ownership titles. More specifically, a title defect is one that deprives the buyer of his right of ownership or restricts it. For instance, there would be a title defect if a third party claims to hold a right of way or a right of ownership over a portion of the property sold.

Except in rare cases, waiving the warranty of ownership (warranty of title) is never recommended. However, it is possible to see a waiving of the warranty of quality, including when a property is sold by a succession or following repossession.

As part of his duty to advise and inform, the real estate broker must inform the client of the consequences of waiving the legal warranty. The Chambre des notaires and the OACIQ invite consumers to be extremely careful before accepting a waiver of the warranty of ownership and not to hesitate to seek the help of a professional of their choice to advise them in this regard.  

In addition, many information sites for sale or purchase are available.

 

About the Chambre des notaires du Québec

The Chambre des notaires du Québec is a professional order consisting of over 3,900 notaries. Its main[RT1]  mission is to protect the public by promoting preventive practice of law, supporting quality notarial practice for the public and promoting access to justice for all.

About the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ)

The Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) ensures the protection of members of the public who enlist the services of real estate brokerage professionals governed by the Real Estate Brokerage Act. It is a member of the Real Estate Regulators of Canada (RERC), an organization that brings together all Canadian regulators in the area of real estate brokerage, building inspection, and co-ownership property management for some provinces.

- 30 -

Information:

Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ)
Joanne Beauvais, Director, Communications
medias@oaciq.com
450 462-9800 poste 8453

Chambre des notaires du Québec
Johanne Dufour, Director, Clients and Communications
johanne.dufour@cnq.org
514-629-9116

Last updated on: January 25, 2021
Numéro d'article: 208364