This is the story of a couple who realized their dream of owning a luxurious second house, a vacation home they would occupy on an occasional basis, but one that also offered substantial rental income. That idyllic situation turned into a nightmare shortly after they purchased the secondary residence, when the buyers learned that because of the rules of the owners’ association as well as an easement registered on the title deed, they could not rent out their unit as planned. In a very detailed Superior Court[1] ruling, Judge Bureau concluded that there was a joint responsibility shared by all the parties involved in the real estate transaction: the real estate agent, the notary and the sellers.
As regards the real estate agent, the court was of the opinion that her professional responsibilities and her duty to advise required that she provide relevant, precise answers to the questions posed by the purchasers, who had clearly expressed their intentions.
The sellers also had a responsibility, given the evidence of their misrepresentations. As for the buyers, even though the court felt that they had conducted as much verification as possible and had clearly revealed their intentions to the real estate agent, had discussed their intentions with the sellers, had checked with municipal authorities and had requested a title search, it would have been more prudent to state in the offer to purchase that buying the residence was conditional on commercial rental of the unit, and also to specifically inform their notary of same.
The court concluded that the notary had not conducted a proper title research and that she was not able to provide complete and sufficient information to the buyers regarding the restrictions imposed on use of the residence.
The moral of the story? Each actor involved in any type of real estate transaction has an important role to play and must do his or her homework!
Me Annie Tremblay
Cain Lamarre
[1] Hayes c. Cuthbert, 2017, QCCS 609, Cour Supérieure, Judge Martin Bureau, 22 February 2017