Real estate law

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Azran & Associates has an extensive expertise in the field of real estate law and property law, most notably with regards to latent defects and substandard work. Our attorneys will tenaciously represent you through all your real estate transactions, whether or not they involve litigation.
Our attorneys are experienced in all areas of real estate law, including:

  • Latent and apparent defects
  • Inscription of hypothecs
  • Inscription of prior claims
  • Motion to enforce sale of property
  • Syndicate of co-ownership
  • Negotiation and drafting of agreements
  • Representation before the courts

The Real Estate Broker’s Obligation With Regards to a Property Inspection

At the time of the purchase of a house, there is a well‑known principle to the effect that a seller is bound to warrant to the buyer that the property is free of latent defects.  But, in accordance with Article 1726 of the Civil Code of Québec:  “The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can … [Read more...]

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The Real Estate Broker’s Obligation With Regards to a Property Inspection

At the time of the purchase of a house, there is a well‑known principle to the effect that a seller is bound to warrant to the buyer that the property is free of latent defects.  But, in accordance with Article 1726 of the Civil Code of Québec:  “The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance.”.

Thus, in a situation where a latent defect is perceived after the sale without the buyer having had an inspection done, it can be difficult to establish the type of defect (latent or not) because the seller can allege that there were visible indications that revealed the defect was apparent.  Without the proof of a professional to contradict the seller’s allegations, the chances of succeeding before the courts are grandly diminished. With the same perspective, there is a disposition under the Real Estate Brokerage Act as well as in its rules of application that was adopted with a view to protect the public.  Indeed, Article 81 of the Regulation Respecting Brokerage Requirements, Professional Conduct of Brokers and Advertising provides that: “A broker or agency executive officer must recommend to the person proposing to acquire an immovable that the person have a full inspection performed by a professional or a building inspector who  (1)        has professional liability insurance covering fault, error and omission; (2)        uses a recognized inspection service agreement; (3)        performs inspections according to recognized building inspection standards; and (4)        submits a written report to the party that requested the inspection services. The broker or agency executive officer may furnish a list of more than one professional or building inspector meeting the requirements of the first paragraph.” (the underlining is our emphasis). As we can see, a real estate broker has the obligation to recommend to his/her client, prior to acquiring an immovable, that a property inspection be performed by a professional, but it is always the client who takes the final decision.  This obligation is conditional upon the four (4) above‑mentioned conditions which exist with the objective to ensure that the client hires a competent professional who has liability insurance.  Thus, with the perspective that the broker adequately explains to his/her client all the legal obligations that will arise from the decision that will be taken, his/her obligation will have been met. Moreover, the broker does not have the obligation to provide to his/her client a list of names of professionals.  A broker with several years of experience will often have more facility to give professional contacts than a less experienced broker.  And of course, the client will always appreciate this aspect of his broker since it will avoid him/her from doing this task. But, it is obligatory for a broker to respect the following two (2) rules when providing such a list to his/her client:  recommend an inspector that will respect the four (4) criteria stipulated at Article 81 of the Regulations and to propose a list of property inspectors to his/her client containing more than one (1) name.  Thus, a broker cannot direct its client towards a specific inspector, despite the fact that he/she is re‑known, since he/she will be putting at stake his/her professional responsibility. In conclusion, we note that the law does not oblige a presale inspection before acquiring an immovable.  But, in order to avoid the burden and useless expenses for defect repairs, we consider essential that all diligent buyers proceed with a presale inspection.  Thus, the real estate broker has an important role in the process of assuring that his/her client is accompanied during the inspection of his/her future immovable by a recognized inspector. Maître Karl De Grandpré Azran & Associés Avocats Inc. + Consulter les articles de la même thématique
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The Contingency Fund

The payment of the common expenses (or condo costs) probably constitutes the most recognized obligation of a co‑owner.  When visiting a condo that is for sale, one of the main questions that potential buyers ask is what is the monthly amount that must be paid for the common expenses?  Indeed, no one wants to pay a big amount and we often give a high importance to the immovable where the condo … [Read more...]

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The Contingency Fund

The payment of the common expenses (or condo costs) probably constitutes the most recognized obligation of a co‑owner.  When visiting a condo that is for sale, one of the main questions that potential buyers ask is what is the monthly amount that must be paid for the common expenses?  Indeed, no one wants to pay a big amount and we often give a high importance to the immovable where the condo costs are low.  But, often in these situations the reserve fund is insufficient.
Generally, this perception of co‑ownership does not correspond to a healthy and effective administration.  Article 1064 of the Civil Code of Québec establishes the principle foundation to the effect that:
"Each co‑owner contributes in proportion to the relative value of his fraction to the expenses arising from the co‑ownership and from the operation of the immovable and the contingency fund established under Article 1071(…)".
Thus, it is Article 1071 of the Civil Code of Québec that stipulates that:
"The syndicate establishes, according to the estimated cost of major repairs and the cost of replacement of common portions, a contingency fund to provide cash funds on a short term basis allocated exclusively to such repairs and replacement.  The syndicate is the owner of the fund."
Finally, Article 1072 of the Civil Code of Québec indicates how the contribution to the common expenses is established:
"Each year, the board of directors, after consultation with the general meeting of the co‑owners, fixes their contribution for common expenses, after determining the sums required to meet the expenses arising from the co‑ownership and the operation of the immovable, and the amounts to be paid into the contingency fund.  The contribution of the co‑owners to the contingency fund is at least 5 per cent of their contribution for common expenses.  In fixing the contribution, the rights of any co‑owner in the common portions for restricted use may be taken into account."

By reading these three (3) articles, we note that the common expenses can be divided two (2) ways:  the common costs for the daily expenses and those for the major repairs and the cost for replacement of common portions that will be deposited in the contingency fund.

The amounts in the contingency fund cannot be applied to anything other than what is provided for in the law.  Thus, it is forbidden to:

  • pay a supplier from this fund that rendered services to the co‑ownership,
  • pay attorney or notary professional fees,
  • pay anything related to the general administration of the co‑ownership.
If an unforeseeable expense is too costly to be paid with the sums from the general account, the directors must ask all co‑owners for a special contribution to provide for this insufficient reserve. Another disposition that often comes back in immovables held in divided co‑ownership is the respect of the minimum percentage provided for in the law for the contribution to the contingency fund.  Thus, the directors content themselves to ask five percent (5%) of the contributions for the common expenses and consider themselves satisfied to be in conformity with Article 1072. Nothing is more false.  According to Article 1071, the syndicate must establish a contingency fund that is based on the approximate cost for major repairs and the replacement cost for common portions.  The best way for the syndicate to proceed is to have a maintenance notebook wherein, with the assistance of a professional, a list can be addressed with regards to the common portions of the immovable and their approximate life expectation.  For example, if it is established by an engineer that a roof’s life expectation is 10 years and the cost of replacement is estimated at $20,000, the syndicate could establish for this specific element an annual contribution of $2,000 for the next 10 years, which will assure that the required amount at the time of performing the corrective work is available and so forth for each common expense.  This way of proceeding will permit to realize that the legal minimum percentage is often insufficient to ensure the life expectation of the immovable.
Consequently, it is important to ensure that the contingency fund is well garnished at all times.  The sums deposited will serve at the given time for major repairs to the common portions without having to ask the co‑owners for a special contribution.  Thus, when future condo buyers realize that the common expenses are high with respect to their share, their first impression will be that it is a possible good indication that the contingency fund is well administered, the whole subject to the necessary verifications. Maître Karl De Grandpré Azran & Associés Avocats Inc.
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