Who Pays the Notary Fees in a Real Estate Transaction?
There is a common misconception that the purchaser is responsible for paying the totality of the Notary’s fees in a real estate transaction. In fact, both the purchaser and the vendor will have fees to pay, depending on the complexity of their given situation.
The fees for purchasers and sellers are based off a minimum fee (the “base” fee) and vary from there depending on the complexity of the file. The base fees are determined with consideration to the number of hours required to adequately prepare the average file and the exceptional quality of service that the team aims to offer.
Because each file is different, the Notary will not be able to determine the exact amount of fees applicable before examining the entire scope of the file.
If you are a purchaser, you are completely responsible for the fees relating to the work involved on your end of the transaction. This includes the fees for the preparation and the publication of your Deed of Hypothec (your mortgage) and the Deed of Sale. The purchaser also pays for the time the Notary spent performing the title exam on the property, a necessary step to ensure that a clear title is transferred from one party to the next. Finally, the purchaser’s fees include fees relating to the administration of the Notary’s trust account, as well as communications between them and the team.
The fees charges to a purchaser will vary mainly depending on whether you are financing your purchase (cash purchases do not require the preparation and publication of a Deed of Hypothec), as well as the financial institution you have chosen to finance your property. Additional fees are common for purchasers with lenders who are virtual banks (for example: MCAP, First National Financial, Lendwise, Canwise, Manulife, FCT) because of the additional work required on their end. Similarly, if you are working with a brokerage channel (for example: Multiprets) rather than directly with the financial institution, the same can apply.
As a purchaser, you can also be responsible for fees related to any additional work required which is outside the scope of a standard transaction. A few common examples of situations leading to additional fees are as follows:
If you need to be represented by Power of Attorney to sign your Deed of Hypothec or Deed of sale and do not already have a valid Power of Attorney prepared;
If you are participating in the Government of Canada’s First Time Home Buyer Incentive (you are receiving money to put towards your down payment), since this requires the preparation and publication of an additional second-rank mortgage;
If your funding conditions indicate that there are credit cards or accounts that the notary must pay and/or close on your behalf;
If a title insurance is required as a condition of your bank instructions;
If your file is a “rush” file.
If you are a vendor, you are also responsible for the fees relating to the work involved on your end of the transaction. This most commonly includes the fees relating to the preparation and publication of your mortgage discharge. When you sell a property, the Notary is obliged to reimburse your loan in its entirety and request an official discharge (commonly referred to as a Quittance) from your financial institution. The Notary is then required to publish the discharge at the Land Registry.
However, even if you do not have a mortgage to discharge, there will be fees payable by the vendor. The Notary is also obligated to verify that all municipal and school taxes are paid and up to date by obtaining official statements from both the city and the school board. The fees for obtaining these statements will be charged back to the vendor, as well as any fees required to pay any arrears on taxes. Finally, like the purchaser, the vendor’s fees will include fees relating to the administration of the Notary’s trust account, as well as communications between them and the team.
As a vendor, you can also be responsible for fees related to any additional work required which is outside the scope of a standard transaction. A few common examples of situations leading to additional fees are as follows:
If you are selling a condominium, for obtaining and examining all relevant information and documentation from the Syndicate of Co-Ownership;
If your file requires that the Notary orders a title-insurance;
If you require that the Notary transfers funds to another Notary for a future transaction;
If you need to be represented by Power of Attorney to sign your Deed of sale and do not already have a valid Power of Attorney prepared;
If the Notary is required to hold back and administer funds after the closing date;
If the Notary is required to administer and reimburse a bridge-loan on your behalf;
If a separate or additional appointment is required, at your request;
If the Notary must prepare a Declaration of Transmission of an Immovable to be able to sell the property (applicable if the vendor is a Succession and this step has not yet been completed);
If the Notary must pay any tax arrears on your behalf;
If the Notary must made payment to your Land Surveyor, Syndicate of Co-Ownership, or any other additional payment required to settle your file;
If you require that funds be directly deposited into your bank account;
If you require that the sale balance be split separately between multiple vendors;
If your creditor is a private lender rather than a financial institution;
If the Notary must correct a title issue.
As a vendor, you are also required to reimburse the Notary other expenses, notably:
Fees charged by the Syndicate of Co-Ownership or the administration for the preparation and transmission of relevant documents;
The title-insurance premium;
Additional copies of the Deed of Sale, if you have requested them.
Understandably, it can sometimes be daunting to consider all the variables surrounding the notary fees, but it is our hope that this gives a bit more clarity on the topic. If you are unsure whether a particular fee applies to you, don’t hesitate to contact a member of the Babalegal team.
Chambre des Notaires website: « Facturation » https://www.cnq.org/vos-services-notariaux/immobilier/facturation/#faq-1032
Protégez-Vous : « Je vends ma maison : qui paiera les frais de notaire ? » https://www.protegez-vous.ca/partenaires/chambre-des-notaires-du-quebec/je-vends-ma-maison-qui-paiera-les-frais-de-notaire
Code de déontologie des notaires (N-3. r.2) (Version updated on June 15th, 2021) : http://legisquebec.gouv.qc.ca/fr/pdf/rc/N-3,%20R.%202%20.pdf
Notaries Act, N-2 (Version updated on October 31st, 2021) : http://legisquebec.gouv.qc.ca/fr/document/lc/N-2
Notaries Act, N-3 (Version updated on October 31st, 2021) :http://legisquebec.gouv.qc.ca/fr/document/lc/N-3