Amortization
Period required to pay back a mortgage loan in full through regular
payments. The amortization is usually based on fixed terms of 10,
15, 20 or 25 years.
Association des courtiers et agents immobiliers du Québec
Organization established under the Real Estate Brokerage Act whose
main mission is to protect the public by overseeing the activities
of all real estate brokerage professionals practising in Quebec.
Brokerage contract
Agreement under which a person authorizes a real estate broker to
act on his behalf, for a given period of time, as intermediary in
the purchase, sale, rental or exchange of immovable property. The
brokerage contract formalizes the rights and obligations of the
broker and his client by mutual consent.
In an exclusive brokerage contract the client agrees, for the term
of the contract, not to use the services of a broker other than
the one with whom he signed the contract. Usually, the exclusive
brokerage contract also states that the client who is party to the
contract cannot sell or buy the immovable himself.
Building inspection
General verification and assessment of the state of the main components
of an immovable (foundation, structure, roof, heating system, electrical
system, etc.).
Cadastral designation
Information concerning an immovable (location, area, value, etc.),
contained in the cadastre (land registry) for a given region.
Cadastre
Public register containing the technical data on each immovable
in a given region (lot). A lot number used to publish the applicable
rights is assigned to each property indexed in the cadastre.
Certificate of location
Document containing a report and a plan in which the land surveyor
expresses his opinion on the location and condition of an immovable
in terms of the titles, the cadastre and the applicable laws and
regulations.
Certificate of practice
Operating permit issued by the Association des courtiers et agents
immobiliers du Québec (ACAIQ) to any natural person, partnership
or legal person who meets the legal requirements to carry out real
estate brokerage activities in Quebec. The granting of a certificate
by the ACAIQ is conditional on the successful completion of a series
of specialized real estate brokerage courses and an entrance examination
for the profession.
Charge
Amount to be paid according to a preset deadline. For example, tax
payable on the use of a public utility.
Co-ownership property
Immovable in which the ownership is divided between several owners.
Right of ownership shared between several persons concerning a single
property or a group of properties.
Co-ownership is considered to be undivided when the right of ownership
does not entail a physical division of the property.
Co-ownership is deemed to be divided when the right of ownership
is divided between the co-owners in fractions (lots), each containing
a physically divided unit and a portion of the common area.
Co-ownership fees
Expenses related to the maintenance and management of the common
areas of a co- ownership property. Monthly payment, usually fixed,
used to set up a fund to pay for current and unforeseen expenses
(repairs, equipment replacement, etc.).
Counter-proposal
A proposal presented in response to a promise to purchase or to
another counter-proposal and which in itself constitutes a new promise.
Note: The main purpose of the counter-proposal is to signify
refusal of a proposal by the other party to the transaction.
Deed of sale
A contract, usually drawn up by a notary, used to formalize the
sale of an immovable to a buyer.
Deposit
A sum of money that accompanies a promise to purchase an immovable.
The deposit must be placed in a trust account and will be deducted
from the balance payable upon the signing of the deed of sale, or
it will be returned to the party who made the promise to offer if
the sale does not go through.
Description sheet
Document used by a real estate broker or agent to present the features
(construction year, taxes, measurements, etc.) of an immovable covered
by a real estate brokerage contract.
Down payment
Personal contribution of the buyer to the financing of an immovable.
Cash portion deducted from the selling price, which determines the
amount of financing required to complete the purchase.
Note: If the down payment for the purchase of the immovable
is less than 25% of the purchase price, the loan must be insured
by the Canada Mortgage and Housing Corporation (CMHC) or by GE Capital
Mortgage Insurance Canada.
Easement
Restriction of the right of ownership for reasons of private interest,
general interest or public use. Right of access or use of land by
others for a defined purpose (passage, parking, public utilities,
etc.).
Evaluation
Process that consists of estimating the market value of an immovable
based on the general condition of its components and its specific
features. The evaluation is often the result of a comparison with
similar immovables that are up for sale or were recently sold in
the same area.
Financing
Means used by a buyer to acquire an immovable. Financial resource,
often in the form of a mortgage loan provided to the buyer by a
financial institution for the purchase of an immovable (see Mortgage
loan).
Fonds d’indemnisation du courtage immobilier
Body created under the Real Estate Brokerage Act, to which all real
estate brokers and agents in Quebec contribute in order to compensate
consumers who may be victims of fraud, dishonest transactions or
misappropriation of funds or other property which, under the Real
Estate Brokerage Act, must be deposited in a trust account.
Indirect costs
Additional expenses to be paid when buying an immovable, including
building inspection, property evaluation, loan application, notary
fees, taxes, insurance, etc.
Interest rate
Percentage representing the amount of interest produced by an amount
of one hundred dollars. A 6.5% interest rate will produce an interest
amount of $6.50 payable to the lender for every $100 borrowed.
The interest rate is used to calculate the amount to be paid to
the lender in exchange for financing to allow the buyer to purchase
an immovable.
Mortgage
Real right granted to a creditor on an immovable as collateral for
a debt. This right creates an obligation on the part of the borrower
to abide by the loan payback terms by tying the immovable to the
agreement (see Financing and Mortgage loan).
Mortgage loan
Method of financing in which the immovable is used as collateral
for debt repayment.
Mortgage loan insurance
Insurance taken out by the buyer of an immovable in order to guarantee
the payment of the monthly instalments required to reimburse a mortgage
loan in full.
Note: If the down payment for the purchase of the property
is less than 25% of the purchase price, the loan must be insured
by the Canada Mortgage and Housing Corporation (CMHC) or by GE Capital
Mortgage Insurance Canada.
Net proceeds from the sale
Residual amount deriving from the sale of an immovable once all
selling expenses have been deducted, i.e. mortgage loan balance,
broker commission, legal fees, tax adjustments, etc.
Principal
Amount of money borrowed through a mortgage loan.
Professional liability insurance
Professional liability insurance is a security taken out by real
estate brokers to protect themselves against the financial consequences
of any fault, error, negligence or omission which their representatives
or themselves could be responsible for in the course of their activities.
Promise to purchase
Undertaking by a person to purchase an immovable under certain conditions
set by that person. Contract through which the seller agrees to
sell the immovable once he/she has accepted the promise to purchase.
Real estate agent
A natural person who holds a certificate issued by the Association
des courtiers et agents immobiliers du Québec authorizing
him/her to carry out brokerage transactions for the purchase, sale
or rental of immovables.
A real estate agent is only authorized to act for and on behalf
of a broker. He/she acts as a representative of the broker.
Real estate broker
Natural person, partnership or legal person who holds a certificate
issued by the Association des courtiers et agents immobiliers du
Québec authorizing them to carry out brokerage transactions,
for compensation, on behalf of others for the purchase, sale, rental
or exchange of immovable properties. A real estate broker may employ
real estate brokers or agents to represent him/her. By law, the
broker has full responsibility for the professional actions of the
persons who represent him/her.
Real estate brokerage
Professional activity of real estate brokers and agents. Brokerage
transactions and professional acts carried out by real estate brokers
and agents in regards to the purchase, sale, rental or exchange
of immovable properties. Profession which can only be practised
by holders of a certificate issued by the Association des courtiers
et agents immobiliers du Québec.
Right of ownership
Recognition that gives a property owner the right to use, enjoy
and freely and fully dispose of the property, to the extent of the
limits and conditions imposed by law.
Right of withdrawal
Privilege which a natural person has to withdraw from a real estate
brokerage contract for the sale of his/her immovable within three
days following receipt of the contract duplicate signed by both
parties, unless there is a written waiver. After this period, if
the contract is marked “irrevocable”, it cannot be cancelled
under any circumstance nor can the term be changed unless the broker
or agent agrees.
Note: The right of cancellation applies when the contract involves
a predominantly residential building containing less than five dwellings.
Selling expenses
Additional expenses to be paid when selling an immovable, including
mortgage loan balance, real estate broker commission, notary fees,
tax adjustments, etc.
Transfer tax (Welcome tax)
Tax levied by a municipality on any transfer of right of ownership
within its territory.
Trust account
Deposit account at a financial institution in which a real estate
broker can deposit sums entrusted to him/her in the course of a
real estate transaction.
When presenting a promise to purchase, the buyer often gives the
listing broker a deposit on the purchase of the immovable. This
deposit must be placed in a trust account.
Source: Association des courtiers et agents immobiliers
du Québec, july 2004.
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