Completing a real estate transaction in the Province of Québec is generally similar to completing a deal in any other Canadian jurisdiction, except for certain conceptual differences. In practice, this results in the use of some special terminology and a few unique procedures, but mostly the same result is achieved. Québec has responded well to the influence from the rest of North America and its legal system, which is a mix of civil law and common law tradition, can accommodate all the latest structures.
The Civil Code of Québec is the law of general application and governs relations between persons and property. Non-residents are free to purchase real estate in Québec and are subject to the same general restrictions as residents in regard to the purchase of agricultural land and designated cultural properties.
Most real estate transactions involve a review of title, the obtaining of an up-to-date survey and, in some cases, the obtaining of title insurance. Conveyance deeds may be either under private signature or executed before a Québec notary. Québec has a graduated land transfer tax duty, subject to a variety of exemptions, including for related companies.
In Québec, a mortgage is called a hypothec, an easement is called a servitude, a ground lease is called an emphyteusis or emphyteutic lease, real property is called an immovable, a survey is called a certificate of location, an air right is called a right of superficie and a condominium is called a divided co-ownership.
Mortgages are called hypothecs in Québec and must be signed before a Quebec notary if real estate is involved. Québec has a modern central registry system for hypothecs on personal property, leases and conditional sales agreements in which filings and searches can be completed electronically. There is a separate land registry system for title to real estate and hypothecs on real estate. Like other Canadian jurisdictions, Québec has certain fundamental rules which are of "public order" and cannot be waived by the parties. However, in most commercial contexts, the rules of the Civil Code of Québec may be deviated from if desired by the parties.
There is no division of legal ownership and beneficial ownership in Quebec as there is in the common law. It is often the practice in Quebec to register title to real estate in the name of an agency or nominee company and have the nominee enter into an unregistered agency agreement with the beneficial owners. In this way the nominee, even though it is the registered owner, is not vested with any right of beneficial ownership.
Québec law can accommodate all the sophisticated and complex structures being used elsewhere in North America. Indeed, many non-residents own or participate in major development projects in Québec such as shopping centres, office buildings and industrial and multi-residential developments. Québec law can and has accommodated income funds, REITS, trusts, limited partnerships, monetizations and securitizations – all with the usual "joie de vivre" and a few special touches to preserve Québec’s cultural identity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
