Sellers, buyers and even mortgagees are all concerned by the question of the certificate of location. Why is this document so important?
First, let's return to the very source of its necessity. Article 1719 of the Civil Code of Québec states that "The seller is bound to deliver to the buyer the titles of ownership in his possession and, in the case of a sale of immovables, a copy of the deed of acquisition of the immovable, as well as a copy of the previous titles and certificate of location in his possession.
Please note that this is not just any kind of certificate of location, but a document demonstrating the current factual and legal situation. This is why most promises to purchase, as well as the lending financial institution, require the seller to provide a certificate demonstrating the current situation of the premises.
The certificate of location is issued by a land surveyor. As part of a real estate transaction, it must be up-to-date and show the current state of the property. It represents the physical and legal state of the property, which means that all buildings, structures, hedges, fences, entrances, easements, flood or risk zones must be shown. What's more, the surveyor's report must describe the applicable laws and regulations, and indicate their impact on your property. A certificate of location may even be required for a vacant lot!
The need for an up-to-date certificate of location depends on a number of factors. You need to know what is stipulated in the signed offer to purchase, the mortgagee's requirements, when the last certificate was drawn up and any subsequent changes to it. It is assessed on a case-by-case basis, and the notary is the real estate lawyer who determines whether a new one is required.
Even if the certificate of location appears to be fully compliant with the current state of the premises, the notary has a professional responsibility to examine it rigorously. If he has the slightest doubt about its conformity with the current state of the property, or if the certificate is 10 years old or more, he will ask for another one. Why 10 years old? Because in the space of a decade, there's a good chance that legislative changes or regulations have been introduced, often without the owner's knowledge, even if the visual appearance of the building doesn't seem to have changed.
To answer this question, we need to go back to the pre-contract, i.e. the offer to purchase or the promise to sell. This is the document that gives rise to the sale, and usually determines certain commitments on the part of the seller and buyer.
The pre-contract generally stipulates that "the seller will provide the buyer with a true copy of his title of acquisition (for example, a deed of sale) as well as a true copy of a certificate of location indicating the current state of the property. Any new certificate of location will be at the buyer's expense if it does not reveal any changes to the certificate provided by the seller".
The overheated real estate market is causing a lot of hassle for buyers. It also happens that a seller who receives multiple offers refuses to produce a new certificate of location. If you give in to pressure, be aware that you will still have to provide the notary with this certificate, usually at the request of your creditor, and at your own expense. The title insurance often offered in the event of a missing or out-of-date certificate can sometimes be useful, but will not protect you from the unfortunate consequences of any anomalies that may appear on the certificate. This insurance will only cover the costs involved in bringing your building up to standard.
For example, suppose a solarium was built without a permit. In such a case, you wouldn't be able to obtain a minor variance from the municipality, because the latter can't bring into compliance a structure built illegally in the absence of a permit. You could even be forced to demolish it! In this case, title insurance would only cover the cost of demolition, not replacement. When the building is resold, the buyer could also demand that the property be brought up to code, and you would then have to pay the cost of correction without being able to appeal to title insurance.
So, are you convinced of the relevance of a certificate of location? In any case, ask your notary for advice. He or she is the only legal expert who can guide you through the entire process of what will often be the most important acquisition of your life.
