What You Should Know about the Role of the Notary in Buying a New Condo
What is the notary's role in buying a new condo?
The notary is a key player in purchasing a property, from start to finish. But what exactly are their roles in buying a new condo?
For many first time buyers, the role of the notary when purchasing a condo is somewhat unclear. Here are a few notes to help solve this mystery.
The notary has three main functions in a real estate transaction. They are the ones authorized by law to write the mortgage deeds and deeds of sales. It is also the notary who finalises the transaction between the buyer and seller.
In general, the buyer chooses their own notary. Only in the case of purchasing a new condo or house in a new development is there an exception; in this case, the seller may choose the notary. This provision benefits both parties involved, as the notary is chosen for their knowledge of that particular real estate project. This leads to increased efficiency because of the specifics related to the common areas, contracts and declaration of ownership, for example.
The notary will first verify the property title deeds to ensure the seller legally owns the building and there are no constraints or mortgages on it. He or she will then prepare the deed of sale, the mortgage and the declaration of ownership. It is also the notary who calculates the adjustments between the buyer and seller, such as property taxes and condo fees.
To prepare all the necessary papers, the notary will usually contact the buyer one year in advance in order to get their social insurance number and verify their marital status. They will then contact the buyer one or two months before the purchase date to verify all of the information is still valid.
It all ends with a meeting to finalise the transaction. In the case of Prével projects, this usually occurs the day you take possession of your condo. At this time, the notary will read and explain each document to the buyer and answer any questions. This meeting usually takes around 1½ hours. The client must bring two pieces of photo I.D.
The costs related to this final step usually range from $865 to $1,565 before taxes and are based on the purchase price and type of transaction. For example, if it is a cash purchase, there will be no mortgage contract and the fees would be lower.
There are also additional costs such as the land registration with the City of Montréal. It varies from $100 to $375 depending on the number of buyers and the type of transaction. To complete the transaction the buyer must also pay any amount due to the seller, which is the balance of the purchase price after the mortgage. This sum will be paid to the notary in the form of a bank draft put into a trust account.
Once everything is settled, the moment you’ve been waiting for arrives: you get your keys!!