Verifying right of ownership restrictions and consulting the online land register
(Update of the article published on March 17, 2006)
Just as he must verify the features of an immovable, the real estate broker must know and verify the characteristics of the immovable’s right of ownership under private and public law.
Sub-section a) of clause D.2.6.of the Declarations by the seller of the immovable form (hereinafter referred to as “Declarations by the seller”) provides examples of restrictions of private law that can encumber an immovable: hypothec, servitude, etc. Sub-section (b) provides examples of restrictions of public law that can encumber the immovable, i.e. municipal zoning and subdivision by-laws, the Cultural Property Act, environmental regulations, etc. The broker must also, for the purpose of clause D.4.3, make sure that a notice of soil contamination was not published in the Land Register.
However, such verifications can no longer be limited to the restrictions mentioned in the documents provided by the seller, as used to be the case. Verification tools have evolved considerably with the advent of the Internet and access to the online land register. The correct way to verify right of ownership restrictions is to consult the Québec Online Land Register. The index of immovables must be verified in order to ensure that no act restricting the right of ownership has been registered subsequent to the publication of the owner’s title of acquisition. This index will also enable the broker or agency to know for certain whether the seller has one or more hypothecs or whether prior notices of exercise by the hypothecary creditor or contamination notices have been published.
The real estate broker must verify the ownership documents provided by the seller or published by the Land Registry Office in order to identify any restriction. This will enable him to make sure that the selling owner made all the relevant declarations concerning his immovable.
For example, if the immovable being sold has a servitude of view in favour of a neighbouring immovable, this information must be mentioned in the Declarations by the seller. By consulting the act of acquisition, the real estate broker will also know about the seller’s declarations that do not involve restrictions of public law.
In case of doubt, he must direct the seller or the buyer to an expert in the field, such as a notary. Here are some examples of how to enter restrictions of private or public law under the Declarations by the seller.
Restrictions of private law:
- ''Mortgage deed bearing number 343434 granted in favour of Caisse populaire d’Albertville”
- ''Servitude of view bearing number 343433 granted in favour of the neighbouring lot 1234567”
Restrictions of public law:
- ''The property is located in a flood zone'';
- ''The property is located in an agricultural zone.
Restrictions have a major impact and real estate brokers must take these into account to inform the parties. For instance, in the example where a property is located in an agricultural zone, the seller must obtain the Commission de protection du territoire agricole’s authorization before alienating all or a portion of the immovable sold. He must find out how long it takes to get this authorization from the Commission, complete the Declarations by the seller form and attach it to the promise to purchase and add the following statement under clause 12.1: “Notwithstanding the provisions of clause 10.3, the immovable is sold subject to restrictions set out in clause 2.6 of the DS form attached hereto.” Remember also that the information regarding restrictions must appear not only on the Declarations by the seller form and the promise to purchase, but also on the immovable’s detailed description sheet.