Possession and transfer of risks

The transfer of ownership will take place at the signing of the deed of sale, as well as the taking of possession which usually takes place on the same day. In return for the payment of the sum agreed to the seller, the buyer will have the full enjoyment of the property sold. In addition, during the transfer of ownership, the seller transfers all the risks associated with the building. In this regard, the deed of sale usually includes a risk transfer clause which stipulates that once you have signed the deed of sale, you become responsible for the risks and losses related to your newly acquired property. It is therefore important to take out the necessary insurance (such as home insurance) from day one.

Taking possession

The taking of possession of the purchased building usually occurs on the day of the signing of the deed of sale at the notary’s office. If the apartment is occupied by the seller, the latter must give you the keys and release the premises, most often, on the day of the deed of sale. In the event that the apartment is rented, the seller must give you a copy of the lease. Furthermore, it is possible to provide in the taking possession clause that it will occur at a further date than the date of the signing of the deed of sale. Thus, it could be agreed that the seller occupies his apartment for a more or less long period after the sale, and this in return for compensation to be determined.

Transfer of risks

The transfer of risk is generally linked to the transfer of ownership. The buyer assumes the risks relating to the immovable in accordance with article 950 of the Civil Code of Quebec from the signing by both parties of the deed of sale. The loss of the thing as a result of a loss is thus borne by the owner at the time of the occurrence of the disaster. It is therefore important in the transfer of ownership of a building, to be able to precisely date the transfer of ownership. The deed of sale received by a notary (authentic act) is an essential tool to be able to prove the date and time of the transfer in the event of a claim. But who says "transfer of risks" says  " “liability insurance and insurance for the improvements which have been carried out in the private portion”. There must therefore be a concomitance between the date of signature of the deed of sale and that of the entry into force of the various insurance coverages.

Remember that civil liability insurance for co-owners became mandatory (Art.1064.1 of the Civil Code of Quebec) on October 15, 2020. The minimum amount of liability insurance that a co-owner must hold is:

  • 1 million, if the building has fewer than 13 fractions used or capable of being used as a housing unit or for carrying on a business;
  • 2 million, if the building has 13 or more fractions.

In addition, insurance for improvements to a unit is not mandatory under the law. However, most declarations of co-ownership require co-owners to subscribe and maintain such insurance coverage. Moreover, they must prove that this insurance is still in force - each time they renew their insurance contract or change insurer - by giving a certificate of insurance to their board of directors.

WHAT YOU SHOULD KNOW! When the promising buyer wishes to take possession of the property before the signing of the deed of sale by means of, if applicable, the payment of rent, the offer to purchase must contain a clause defining the conditions relating thereto.

http://www.condolegal.com/images/Boutons_encadres/A_retenir.pngWHAT TO KEEP IN MIND: The transfer of ownership usually takes place at the notary's office at the signing of the deed of sale, as well as the taking of possession which usually occurs on the same day. Even after the transfer of ownership, the buyer benefits from a number of guarantees, including the guarantee against hidden defects.

WARNING! The deed of sale usually includes a risk transfer clause which stipulates that once the deed of sale has been signed by both parties, the buyer becomes liable for the risks and losses related to his newly acquired property. It is therefore important to take out the necessary insurance coverage from day one.

 

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