Seizure, Judgment or Prior Notice Found in the Title Search: Who Must Get It Removed

A few days before closing, the notary calls: the title search has turned up an entry in the land register that nobody had mentioned. A judgment against the seller, a seizure, or a creditor's notice that it intends to exercise its hypothec. This article explains what these entries change for the sale, who must get them cancelled, and what the buyer shouldn't accept. For the notary's general role in a transaction, see our guide to the real estate notary in Quebec.

The title search doesn't only look for the owner

The notary checks who owns the property, but also everything that encumbers it. The land register keeps the rights registered against a property: hypothecs, servitudes, and entries that arise from debts or proceedings aimed at its owner. An entry of this kind follows the property, not the person. If it isn't cancelled, the buyer acquires it along with the property.

That's what sets these discoveries apart from the seller's bank mortgage, known in advance and settled routinely on closing day. Here, the entry wasn't expected, its creditor isn't a party to the sale, and the amount isn't known yet.

Three entries that stop a sale

First, the judgment. A creditor who has obtained a judgment against the seller can register it on the property, where it becomes a hypothec securing the amount owed. Then the seizure: an enforcement proceeding registered against the property, preparing its forced sale for the creditor's benefit. Finally the prior notice of exercise: the notice by which a hypothecary creditor announces it will exercise its remedies on the property if the default isn't cured.

All three have one thing in common for the buyer: a careful notary won't close while one of them remains on title. They aren't settled by a clause, they're settled by a cancellation.

Who must obtain the cancellation: the seller, not the buyer

The seller committed to transferring a property free of rights they didn't declare. Entries arising from their own debts are therefore their responsibility. It's up to them to reach an agreement with the creditor, pay what's owed and obtain the document that allows the entry to be cancelled, or failing that, a court decision.

The buyer doesn't have to pay someone else's debt to receive what they bought. Nor do they have to negotiate with the seller's creditor: their counterpart remains the seller, through the brokers and the notary.

A judgment creditor isn't a bank: the amount and the undertaking in writing

In many cases, the debt can be paid out of the sale price on closing day. That still requires two documents the creditor has no obligation to produce quickly: a written statement of the exact amount owed on the scheduled date, costs included, and its undertaking to consent to the cancellation once paid.

Without those two documents, the notary can neither calculate what to hold back from the price nor assure the buyer that the entry will disappear. That's often where the timeline slips: not because of the debt itself, but because of the time it takes to put a figure on it and obtain the undertaking.

When the price isn't enough to clear everything

Things get complicated when the registered debts exceed what's left of the price after the seller's mortgage is repaid. The seller then has to find the difference elsewhere, or get the creditors to accept less. Until they manage it, they can't deliver the title they promised.

For the buyer, the closing date becomes uncertain, and the promise remains the framework: its deadlines, its conditions, what it provides if the seller can't sign. If the deadlock lasts, the remedies are those against a seller who doesn't sign, covered in our article on the seller who refuses to close.

What the buyer shouldn't accept

Signing "in the meantime", on the mere promise that the cancellation will follow. Paying part of the price directly to the seller so they settle with their creditor themselves. Or accepting a postponement without a new written date, which turns a delay into an open-ended wait.

The rule fits in one sentence: the price goes through the notary, and the deed is signed once the entry is cancelled or once the notary holds what's needed to have it cancelled. Anything else shifts onto the buyer a risk that belongs to the seller.