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YOUR NOTARY AND YOUR MONEYdeposits in trust accounts

In the exercise of their profession, notaries are often called upon to temporarly hold funds belonging to a company or individual which are to be paid to another person. Such funds may be the savings of someone who is buying property, the proceeds of a mortgage loan (hypothcary loan) or liquid assets from an estate.

Why is the notary required to hold your money ?

When you signed the deed of sale for your property at the notary's office, for example, you do not receive your money that same day.

Before your notary can remit the sale proceeds to you, he or she must file copies of the deed with the registry office, where the necessary entries will be made in the register to transfer the ownership of the property, a process which normally takes only a few days.

A vendor is deemed to have fulfilled his or her obligation to furnish clear title only when the notary can verify that the changes have been entered in the government registers. The sale proceeds are not given to you until it has been established that the title is clear.

Where is the money deposited ?

Notaries must immediately deposit money entrusted to their care by or on behalf of their clients into a special account called a trust account. The account may be opened in a bank, credit union or trust company. Whichever financial institution is used, it must be a member of the Régie de l'assurance-dépôt du Québec (Quebec Deposit Insurance Board), which regulates and insures such accounts.

The Chambre des notaires also exercices strict control over the administration and auditing notaries' trust. I a notary leaves the practice, the Chambre immediately appoints another notary to act in his or her stead, to prevent any delay from adversely affecting clients.

Sometimes a deposit remains in the trust account for quite a while before payment is ultimately made. This is the case in the settlement of most estates. In such situations the notary may recommand opening a special exclusive trust account to permit the calculation of interest earned thereon. If you ask your notary to open a special trust account for you, he or she may charge administration fees and is entitled to professional fees for such work.

As a rule, however, money is turned over to a notary for a short time only, which does not justify opening a special account. In fact, professional and administration fees for a sepcial trust account often exceed the interest earned on the money deposited.

For this reason, the notary places most client deposits in a general trust account. Interest generated by this account must, by law, be paid to the Chambre's Notarial Studies Fund.

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