What happens if there’s a problem between the promise to purchase and the deed of sale?

The period between signing a promise to purchase and the final signature at the notary’s office can seem long and sometimes anxiety-provoking. This is normal – there are delays for financing, inspectionsand notary formalities. But what happens if, during that time, something goes wrong: water damage, fire, storm, or even the death of the seller? Here’s a practical, straightforward guide that explains how to react, what steps to take and what options are available to you.

Why there is a delay between the promise to purchase and the deed of sale

The promise to purchase commits the parties to the main terms, but several steps still need to be completed before the property can be officially transferred:

• Obtain and confirm financing (mortgage conditions).
• Due diligence: inspection, survey report, certificate of location.
• Preparation of the notarial deed, verification of title and registration of mortgages or charges.
• Coordination of dates between buyer, seller, lender and notary.

This time lapse is normal, but it also creates a window during which unforeseen events can affect the property.

Common scenarios and their consequences

Many types of unforeseen events can occur. Here are the most common ones and what they usually involve:

• Material damage (flood, major leak, damaged roof): this can affect the value and habitability of the property.
• Natural disasters (local tornado, landslide): depending on the extent of the damage, the transaction may be delayed or renegotiated.
• Death of the seller: the succession may complicate or delay the signature. The notary and the heirs will have to validate the continuation of the transaction.
• Acts of vandalism or claims covered by insurance: the insurance company will intervene according to the cover taken out.

Insurance and liability: who does what?

It is essential to understand the role of insurance and the obligations of the parties:

• Current owner (seller): In general, the seller is liable for any damage that occurs as long as he remains the registered owner. He or she must report claims to his or her insurer and to the parties involved.
• Buyer: the buyer must also be proactive. Inform your real estate broker or notary of any changes, and check your insurance if you have already transferred coverages or made arrangements for home insurance at the date of the deed.
• Insurance companies: they assess the claim, offer compensation, or order repairs according to the policy. Some offers include a cheque, others send contractors to carry out the work.

Important: Notify the insurers and inform the other party promptly. Communication is often the key to a simple resolution.

The pre-signing visit: your safety net

A pre-possession visit or inspection at the notary’s office just before the deed of sale is a common and recommended practice. This visit enables you to see the condition of the property at the time of official delivery.

Tour objectives :

• Check for major new damage (flooded basement, collapsed roof, major leak).
• Confirm that the agreed repairs have been carried out.
• Ensure that the general condition of the property corresponds to that observed at the time of the promise to purchase.

If a problem is detected, you have several options: ask for repairs before signing, ask for financial compensation, delay the deed of sale to allow repairs to be carried out, or, if the promise allows, withdraw from the transaction.

What if a claim occurs after the promise has been made?

Here are the practical steps to follow if you discover a problem between the promise and the deed:

1. Inform your real estate broker and notary immediately. Don’t let silence make the situation worse.
2. Contact the seller’s insurer (the seller should do this too). If you are the buyer and have already taken out insurance, inform yours too.
3. Document everything: photos, videos, expert or inspection reports. Keep written communications (e-mails, text messages).
4. Arrange another visit with the notary or your representative to see the extent of the damage.
5. Evaluate your options: repairs before signing, price reduction, postponement of the deed, or cancellation if the promise allows.
6. Consult a professional (notary or lawyer) if the situation is complex or if the parties disagree.

Most of the time, an open discussion and collaboration with the insurer can resolve the situation quickly and easily. As I often say: let us know. We’re flexible and ready to find a solution.

Just give us a call. As buyers, we’re approachable and pragmatic, and we’ll find a solution together.

Useful clauses to include in the promise to purchase

To protect yourself even before a problem arises, it’s wise to include certain clauses in the promise to purchase:

• Suspensive condition clause (financing): cancels the promise to purchase if the mortgage loan is not obtained.
• Inspection clause: deadline for carrying out inspections and requesting corrective action.
• Condition clause: the property must be delivered in the same condition as at the time of the promise, with the exception of normal wear and tear.
• Insurance clause: specify who is responsible for repairs in the event of a claim between the promise and the deed, or how insurance indemnities will be handled.
• Pre-closing inspection clause: to allow a final inspection and define the consequences if significant damage is found.

A good real estate broker or notary can help you draft clauses tailored to your situation. These protections avoid many misunderstandings and give you leverage in the event of an incident.

Examples of negotiated solutions

Depending on the severity of the loss and the willingness of the parties, the following solutions are often chosen:

• Seller arranges for repairs to be carried out before signature, with invoice or proof of conformity.
• The price is reduced to reflect the cost of repairs.
• The notary delays the deed to allow an insurance claim to be processed.
• If the promise contains an exit option in the event of a major loss, the buyer renounces the purchase without penalty.

When should you consult a notary or lawyer?

Consult a notary or lawyer if :

• The seller disputes responsibility for the loss.
• The seller’s succession complicates the transaction (death).
• The insurance company refuses compensation or questions coverage.
• You’re hesitating between several options and want to know your precise rights under Quebec civil law.

The notary is often the most appropriate contact for questions of title and succession, and for adapting the deed to the situation. A lawyer may be necessary if a dispute arises.

Practical checklist to follow if something unexpected happens

• Immediately notify the broker and notary.
• Contact the seller’s insurer and your own if applicable.
• Document with photos, videos and reports.
• Request a new pre-closing visit.
• Get repair quotes if necessary.
• Discuss renegotiation options (price, deadlines, repairs).
• Consult the notary to adjust the deed or activate a contractual clause if required.

Useful resources (Quebec and Canadian sites)

To find out more abouthome insurance, notarial obligations and rental or estate regulations in Quebec, consult these official resources:

• CMHC (Canada Mortgage and Housing Corporation): https://www.cmhc-schl.gc.ca
• Autorité des marchés financiers (insurance information): https://www.lautorite.qc.ca
• Chambre des notaires du Québec: https://www.chambre-notaires.qc.ca
• Administrative Housing Tribunal: https://www.tal.gouv.qc.ca
• Official portal of the Quebec government (housing): https://www.quebec.ca

Conclusion

The unexpected between the promise to purchase and the deed of sale can be stressful, but it’s manageable. The key: communicate quickly, document the damage, notify insurers and call in the notary or broker to find a suitable solution. Most of the time, a pragmatic, collaborative approach can preserve the transaction or negotiate adjustments acceptable to all parties.

Essential reminder: if a problem occurs, don’t panic. Inform the right people and take the necessary action. A rapid response reduces risk and paves the way for an easier resolution.