Property Damaged Between Acceptance and Closing: Who Bears the Risk in Quebec

The promise is accepted, the conditions are lifted, the deed is scheduled in three weeks. Then water damage, a fire or a storm hits the property. Does the buyer still have to pay the agreed price for a home that no longer looks like the one they visited? This article deals with a single question: who bears the loss during that interval, and what each party can do. It does not go through what an insurance policy covers, which is the subject of our article on home insurance for buyers.

Until the deed is signed, the risk stays with the seller

An accepted promise creates the obligation to sell and to buy, but it doesn't transfer ownership. Ownership passes at the deed of sale, which is also when the seller hands over the property. Until then, the seller is still the owner, keeps the keys, and answers for the condition of the property.

The Civil Code of Québec ties the risk of loss to that handover: as long as the property hasn't been delivered, the party who must deliver it continues to bear the risks. In an ordinary residential sale, this means damage that occurs before signing is first the seller's problem, not the buyer's.

What the promise says, and why to read it before anything happens

The law sets the principle, the promise to purchase organizes it. The form brokers use contains a clause on the condition of the property at signing and on what happens if it's damaged before the deed. That clause will say, in your particular file, which options open up for the buyer and within what time they must be exercised.

Reading it at acceptance, not on the day of the loss, changes everything. A buyer who knows the clause knows what to ask for, and from whom, on the very first call. A buyer who discovers it under stress negotiates without knowing what they're entitled to.

Minor damage, major damage: the line that decides

Not all damage has the same effect. A broken window or a stain on the ceiling gets repaired before the deed, and the sale proceeds. A loss that reaches the structure, makes a unit uninhabitable or changes the property's value opens a different discussion: the buyer didn't promise to buy that property.

The difficulty is that the line isn't a number. It depends on what was promised, on the intended use and on what it will cost to restore the premises. That's why the damage should be documented, ideally by an expert, rather than eyeballed by one of the parties.

Checking before signing: the final visit

Nothing forces the buyer to discover the damage after the fact. A visit in the days before the deed lets them check that the property is in the condition in which it was promised. If something has changed, it has to be raised before signing, not after receiving the keys.

Once the deed is signed and the property handed over, the loss moves to the buyer's side. Damage noticed the next day becomes a question of proving when it occurred, which is much harder to settle than a finding made the day before in the broker's presence.

If signing has to wait: repair, adjust or withdraw

When the damage is significant, three outcomes come up in practice. The seller repairs before the deed, and the date is postponed by amendment for the duration of the work. The parties agree on a price adjustment or an assignment of the seller's insurance indemnity. Or the buyer exercises the right the promise gives them not to proceed.

Each is settled in writing, with precise dates. A postponement granted verbally, or an adjustment agreed by email without a signed amendment, leaves both parties exposed if tension rises again before signing.

What the buyer prepares from acceptance

Three simple steps avoid improvising. Keep the photos and the inspection report, which establish the property's condition at the promise. Reread the promise's clause on damage and note its deadline. And agree with your broker on a visit in the week before the deed.

The seller, for their part, has every reason to keep their insurance in force until the keys are handed over and to report any loss right away. They bear the risk: they're the one with the most to lose from damage they kept quiet about.