When considering the purchase of a property or exploring mortgage refinancing in Quebec, it is essential to understand the legal aspects involved. Mortgage deeds, easements, and deeds of sale play a crucial role in these real estate transactions. In this article, we will explain the difference between the two types of deeds, their significance for buyers and borrowers, and the central role played by the notary in these processes.
A mortgage deed is a legal document created when an individual wishes to borrow money from a financial institution using a property as collateral. This deed is an agreement between the borrower and the lender, putting a mortgage on the property in question. The mortgage deed is publicly registered at the Land Registry Office and provides security to protect the lender in case of default. The terms of the loan, such as the borrowed amount, interest rate, and repayment schedule, are detailed in the loan agreement, which is not publicly registered.
Deeds of Sale:
Deeds of sale, on the other hand, are legal documents established when a seller transfers a property to a buyer. These deeds formalize the real estate transaction, detailing the sale conditions, including the purchase price, the rights and obligations of the parties involved. These deeds are signed by the seller, the buyer, and the notary. When it comes to deeds of sale, it's important to understand the concept of servitude.
A servitude is a right granted to a person or entity to use a portion of someone else's real estate, even if they are not the owner. These servitudes can impact the use and restrictions of a property.
There are different types of servitudes, each with its own implications. Here are some common examples of servitudes:
Right of Way Servitude: A right of way servitude gives a person the right to cross another's property to access their own property. This can be useful when the only access to a property is through another property.
View Servitude: A view servitude allows a person to maintain an unobstructed view from their property by preventing others from building structures that would block the view.
Public Utilities Servitude: Public utilities such as water lines, power lines, or sewer pipes may require a servitude to pass through private property for access and maintenance.
Conservation Servitude: A conservation servitude is often used to protect the natural or historical features of a property. It may impose restrictions on future modifications or developments to preserve the environmental or cultural value of the area.
Both mortgage deeds and deeds of sale are of paramount importance to buyers and borrowers.
Mortgage deeds provide legal security to lenders, ensuring that the debt will be repaid as agreed. They also formalize the interests of borrowers by setting the terms of the loan and clarifying financial obligations.