Special rules regarding sale of residential immovables (articles 1785 à 1794)

Written by Me Sébastien Fiset , LL.B., B.A.A.
Friday, 11 June 2010 07:44

(Last update May 27, 2010)



1785. The sale of an existing or planned residential immovable by the builder or a promoter to a natural person who acquires it to occupy it shall be preceded by a preliminary contract by which a person promises to buy the immovable, whether or not the sale includes the transfer to him of the seller’s rights over the land.

A stipulation that the promisor may withdraw his promise within 10 days after signing it shall be included in the preliminary contract.

1786. In a preliminary contract, in addition to the name and address of the seller and of the promisor, an indication shall be included of the work to be performed, the sale price, the date of delivery and the real rights affecting the immovable, as well as any useful information pertaining to the features of the immovable and, where the sale price is subject to review, the terms and conditions of revision.

Where the preliminary contract provides for an indemnity in case of exercise of the right of withdrawal, the indemnity never exceeds 0.5% of the agreed sale price.

1787. Where a fraction of an immovable under divided co-ownership or an undivided part of a residential immovable comprising or forming part of a development which comprises at least 10 dwellings is sold, the seller shall give the promisor a memorandum, at the time of signing the preliminary contract; he shall also furnish the memorandum where a residence forming part of a development comprising at least 10 residences and having common facilities is sold.

A memorandum shall also be given where the same fraction of an immovable under co-ownership is sold to several persons who thereby acquire a right of enjoyment in the fraction, periodically and successively.

1788. The memorandum complements the preliminary contract. It contains the names of the architects, engineers, builders and promoters, a plan of the overall real estate development project and, where applicable, the general development plan of the project and a summary of the descriptive specifications. It also contains the budget forecast, indicates the common facilities and contains information on the management of the immovable and, where applicable, on the right of emphyteusis or superficies affecting the immovable.

A copy or summary of the declaration of co-ownership or indivision agreement and of the by-laws of the immovable shall be appended to the memorandum even if they are draft documents.

1789. Where a fraction of an immovable under divided co-ownership is sold, the memorandum contains a statement of the leases granted by the promoter or the builder on the private or common portions of the immovable and indicates the maximum number of fractions intended for lease by the promoter or builder.

1790. Where the promoter or builder, by granting a lease, exceeds the maximum number indicated in the memorandum, the syndicate of co-owners, after notifying the lessor and the lessee, may demand the resiliation of the lease. If there are several leases in excess of the maximum number, the most recent leases shall be resiliated first.

1791. The budget forecast shall be prepared on the basis of one year of full occupancy of the immovable; in the case of an immovable under divided co-ownership, it is prepared for a period beginning on the date of registration of the declaration of co-ownership.

A budget includes, in particular, a statement of debts and claims, revenues and expenditures and common expenses. It also indicates, for each fraction, the likely amount of real estate taxes, the rate of such taxes and the annual expenses payable, including, where applicable, the contribution to the contingency fund.

1792. The sale of a fraction of an immovable under co-ownership may be resolved without formality where the declaration of co-ownership is not registered within 30 days after the date on which it may be registered pursuant to the Book on the Publication of Rights.

1793. The sale of a residential immovable that is not preceded by the preliminary contract may be annulled on the application of the buyer if he shows that he suffers serious prejudice therefrom.

1794. The sale, by a contractor, of land belonging to him together with an existing or planned residential immovable is subject to the rules regarding contracts for work or services pertaining to warranties, adapted as required. Those rules also apply to sales by a real estate promoter.

Last Updated on Friday, 11 June 2010 07:47

Me Sébastien Fiset
Me Sébastien Fiset