Definition : Preliminary contract (promise to purchase) - Deposit

An amount paid in advance by the purchaser to the developer or to the notary, at the signing of the preliminary contract or before the signing of the deed of sale, which shall be deducted from the sale’s price. Notwithstanding any agreement to the contrary, any deposit paid to a builder or a developer toward the purchase of a fraction of an immovable under divided co-ownership must be fully protected by one or more of the following means: a guarantee plan, insurance, a suretyship or a deposit in a trust account of a member of a professional order according to the terms and conditions determined by government regulation.

Webradio du 19 mai 2021: L'achat et la vente d'un condo

L'article 1068.1 du Code civil du Québec, issu du Projet de loi 16, obligera une plus grande transparence lors d'une transaction en copropriété. Le document d'attestation prévu dans cet article posera des questions pointues sur "l'état de la copropriété", afin que les acheteurs sortent du brouillard avant d'acquérir un appartement détenu en copropriété divise.

Projet de loi 16: sept dispositions dans la mire du gouvernement

27 mai 2021 — La ministre des Affaires municipales et de l’Habitation (MAMH), Andrée Laforest, a récemment lancé une vaste consultation visant l’adoption de sept dispositions prévues dans le projet de loi 16. Celui-ci a été sanctionné en janvier 2020.

GUARANTEE PLAN FOR NEW RESIDENTIAL BUILDINGS

The Guarantee Plan for New Residential Buildings differs from the private guarantee plans offered on the market by the nature of the guarantees offered and the mechanisms for asserting its rights. In this regard, the terms and conditions are set out in the the Regulation respecting the guarantee plan for new residential buildings, which is the responsibility of the Régie du Bâtiment du Québec (RBQ). Finally, unlike private guarantee plans, any purchaser of a building covered by this plan automatically benefits from it. As this is a system aimed at the minimum protection of consumers'rights, consumers cannot waive this mandatory guarantee, even if they sign a document to that effect.

Making down payments with the preliminary contract

Building a condominium requires major investments on the part of a developer. This is the reason why a down payment will be required upon signing the preliminary contract for the desired condo unit. The Civil Code of Quebec provides that “any amount paid on the occasion of a promise of sale is presumed to be a deposit on account of the price, unless otherwise stipulated in the contract”.This down payment, which represents the first installment to the seller, varies according to the unit’s total price. Bill 16 introduced provisions to protect down payments made by residential buyers to developers and builders of divided co-ownerships.

What needs to be included in the preliminary contract?

The preliminary contract is an important step in any purchase of new or a property to be built. At all times, the unequivocal will for the buyer to acquire the property must be registered. Although the Civil Code of Quebec specifies the mandatory content of a preliminary contract, the statements contained therein are not exhaustive. To be valid, the preliminary contract must include a certain number of mandatory information, under penalty of nullity. It is also possible to insert various optional clauses in this contract to deepen the conditions of this one.

Definition : Preliminary contract (promise to purchase) - Deposit

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