5 things to know about action in passing of title
- What is an action in passing of title?
- When a buyer pays for the immovable property, the seller transfers the ownership of the property to the buyer and thus, there is a “passing of title.”
- Possible obstacles:
- What happens when a buyer decides NOT to buy the property?
- What happens when a seller refuses to transfer the title to the buyer?
- Both parties have a right of recourse when put in a prejudiced position.
- For an example of a dispute, please visit: https://schneiderlegal.com/2016/10/03/action-en-passation-de-titre/
- Can a promise to purchase be withdrawn?
- The OACIQ states that a promise to purchase is irrevocable until the deadline indicated on it. In other words, as soon as the seller has the promise to purchase in hand, the buyer can no longer withdraw it, for as long as the promise to purchase is valid.
- However, the C.C.Q. provides the buyer with a small window in which he can withdraw the promise, i.e. the period between the moment when the promise to purchase is signed and the moment when it reaches the seller.
- Where the seller receives a revocation before the promise to purchase, the promise lapses (see art. 1391 C.C.Q.).
- Responsibilities of the broker:
- A broker must:
- At all times inform a buyer that his promise to purchase binds him to the seller as soon as he signs it;
- If a buyer informs him that he no longer wishes to buy the immovable or present the promise to purchase, the broker must indicate to the buyer that he must send to the seller, as soon as possible, a revocation of his promise to purchase, given that the broker is obligated to submit any transaction proposal he receives as soon as possible;
- When submitting the promise to purchase, the broker must inform the seller of the buyer’s intention not to proceed with the transaction.
- If a broker fails to fulfil his duties and obligations, the prejudiced party reserves all rights and recourse against the broker.
- In order to prove a valid passing of title, the formalities required are as follows:
- Proof of the existence of a valid promise: legally binding between a buyer and a seller as soon as it is signed.
- Letter of demand: allows you to formally put the party in default to respect his/her obligations (whether to sell or to buy), therefore strengthening your action.
- Deed of sale in conformity with the promise to purchase: notarized deed of sale outlining all of the aspects of the promise to purchase. This notarized deed of sale must be signed by the Plaintiff.
- Tender and deposit of the selling price: the buyer that wishes to succeed in his action in passing of title must demonstrate his capacity to pay the agreed price of the property and his intention to conclude the sale. To do so, he must produce a certified check, a letter of credit or a proof of mortgage financing that matches the said purchase price.
- In conclusion, to be successful in proving a passing of title case, the court will evaluate 2 important aspects:
- Was there a meeting of the minds?
- Are the conditions of the promise to purchase regarding the formalities a. to d. hereinabove respected?
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The above noted text should not be construed as providing legal advice or a statement of your claim. The process highlighted above are merely parameters and barometers and do not constitute any warranties and guaranties with regards to your file at hand. We strongly recommend that you seek legal advice with a licensed attorney from the Barreau du Quebec or a notary at the Chambre des Notaires. Each case must be seen and analysed on its merits as the legal process may be complex and cumbersome.