Gynet Gloria KOZUB
Why is my Notary requiring a new Certificate of Location?
If you find yourself asking this question, know that you’re not alone in this inquiry. This is a very common question amongst Vendors.
There are various criteria that determine whether your Certificate of Location is valid, and not having made physical changes to the property is just one of the many criteria that the Notary will look at when determining the validity of the Certificate of location. The following are a list of criteria the Notary will use to evaluate the validity of the Certificate of Location:
1. Is the Certificate of Location less than ten (10) years old at the time of the transaction?
A certificate of location that is more than ten years old is automatically invalid, even if no physical change has been made to the property since the document was prepared.
In 2017, the Supreme Court of Canada’s decision Ostiguy v. Allie, confirmed that a certificate of location that is more than 10 years old cannot ensure a clear title because of the legal concept of Acquisitive Prescription.
Section 2910 of the Civil Code of Québec defines Acquisitive Prescription as “a means of acquiring a right of ownership, or one of its dismemberments, through the effect of possession”, and determines that if a person exercises possession on a property for a period of ten (10) years, they may acquire the ownership of it by judicial application. This means that a neighbor or other third party may, through the obtention of a judgment, claim ownership of property that did not originally belong to them simply by continuously, peacefully, and publicly using property with the intention of acting as the holder of the right of ownership.
A Vendor is obligated to ensure a clear title to their Purchaser, or a “valid title of ownership”. Land Surveyors, when preparing a Certificate of Location, report on any encroachments or occupation issues that could potentially lead to Acquisitive Prescription. The result of Ostiguy v. Allie is that a seller cannot ensure a clear title, that is, a title free and clear not only of any liens and hypothecs, but also of any encroachments or occupation issues that could affect the purchaser’s title, unless the Certificate of Location is less than ten years old.
2. Does the certificate of location represent the current state of the property?
This is a two-fold question that encompasses many factors. We must ask ourselves if the property has changed in any way since the Certificate of Location was prepared. This includes both physical as well as legal changes to the property.
A Vendor is obligated to provide the Purchaser with a certificate of location “describing the entire state of the immovable”, or, in the case of a condominium, with a certificate of location “describing the current state of the entire co-ownership and including the private portion or, failing this, a certificate of location pertaining to the private portion only”.
a) Was the construction building complete when the Certificate of Location was prepared?
It is possible that a Land Surveyor be asked to prepare a Certificate of Location during the construction process so that a builder can have the document on hand for transactions. When you purchase directly from a builder, it is possible that you forfeit your right to a new Certificate of Location. However, if you are a Vendor and you are a physical person or a company, your certificate of location must describe a completed immovable. If the Land Surveyor notes, either in their report or on their plan, that the property described is “under construction”, either partially or completely, or uses any language that can lead the Notary to conclude that the document does not represent a completed property, you will be required to order a new one.
Note that this is particularly common with recently built condominiums. Unfortunately, if you have provided a Global Certificate of Location (one that includes your private portion and the common portions) but any portion of the property is not fully built at the time of the preparation of the document, you will be required to provide a new Certificate of Location since the current one would no longer describe the current state of the property. This will be the case even if the private portion being sold was complete at the time. However, as a Vendor, you will only be required to ask a Land Surveyor to prepare a new Certificate of Location for your private portion(s) only.
b) Have you made any physical changes to the property since the Certificate of Location was prepared?
This element is usually quite easy for a Vendor to determine. Think of the work you have done on the property since you have acquired it. Have you put in or removed a pool? Have you installed or removed a deck, patio, or have done any major landscaping? Have you made any changes to the structure of the property that would normally require a permit? If so, you will need to have a Land Surveyor prepare a new Certificate of Location to reflect the changes made to the property.
c) Have any servitudes or other rights been published against your property at the Land Registry since the Certificate of Location was prepared?
A servitude is a right that is imposed on an immovable property in favour of another immovable property or person. If a servitude is registered against your property in favour of another entity, you are required to tolerate certain acts of use or abstain yourself from exercising certain rights of ownership.
Consider the most common example of a Servitude in favour of Hydro-Québec and Bell Canada: when this type of servitude is registered against your property, this means that a certain portion of the property is reserved for the use of Hydro-Québec and Bell Canada. This affects your ownership right because you are, technically speaking, not permitted to obstruct their access by blocking the portion with a shed, deck, pool, or any other structure. A Land Surveyor will map out precisely where the servitude affects the property (this will be discussed in their report and shown on their plan) and will discuss in what ways the servitude affects the property. It is important that your purchaser is aware of this situation because it could affect their ownership title.
A servitude is a legal change to a property because it will be registered against the property. The notary will be able to discover it when performing a title exam on the property. Therefore, even if you have not made a physical change to the property, it is nevertheless a change which must be reflected in the Certificate of Location. You will be asked to provide a new one for your purchaser.
d) Has a Declaration of Co-Ownership or a modification to it been published against your property at the Land Registry since the Certificate of Location was prepared?
Divided co-ownership is created by the publication of a Declaration of Co-Ownership at the Land Registry. The Declaration of Co-Ownership constitutes the Co-Ownership, the by-laws of the immovable, and the description of the fractions. The Declaration of Co-Ownership specifies the relative value of each fraction, the share of the common expenses, the votes attached to each fraction, determines the powers of the board of directors and the syndicate of co-ownership, amongst other things.
Often, the Declaration can be amended or modified, and these subsequent modifications must also be registered at the Land Registry.
Therefore, if a subsequent Declaration, amendment, or modification was published after the preparation of the Certificate of Location that you possess, it cannot be considered as representing the current state of the property. As we have already discussed, it is stipulated in the promise to purchase that the seller is obligated to provide the buyer with a Certificate of Location reflecting the current state of the property. Section 1038 of the Civil Code of Québec states that the publication of a Declaration of Co-Ownership at the Land Registry creates the divided co-ownership regime (or, in the case of a concomitant Declaration of Co-Ownership, complete or modify it). Publishing an amendment or modification to the Declaration of Co-Ownership therefore constitutes a change in the legal situation of the property. As such, when the said Declaration or modification is published after the preparation of the Certificate of Location, an update is required.
Who is responsible for paying the new Certificate of Location?
We have seen in the promise to purchase that a Vendor is obligated to provide the Purchaser with a certificate of location “describing the entire state of the immovable”, or, in the case of a condominium, with a certificate of location “describing the current state of the entire co-ownership and including the private portion or, failing this, a certificate of location pertaining to the private portion only”.
We have also seen that the Vendor is obligated to ensure a “valid title of ownership” and that this cannot be accomplished without an up-to-date Certificate of Location.
As a Vendor, you are therefore responsible for mandating a Land Surveyor and for the payment of the fees associated with the new Certificate of Location.
Additional resources: Importance of an up-to-date certificate of location | OACIQ
Civil Code of Québec, sections 1038 and beyond.