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
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.