You have just signed a promise to purchase a house and suddenly the seller refuses to follow through on the promise and refuses to sell. What can you do? You can either claim damages for the unilateral termination without right or force the sale by filing a legal claim: an action in passing of title.

“Failure by the promisor, whether seller or buyer, to execute title entitles the beneficiary of the promise to obtain a judgment in lieu thereof.”

Article 1712 of the Civil Code of Quebec

The action for passing title is therefore a recourse available to anyone who is the victim of a seller or buyer who, following a promise to purchase or sell to which the latter has committed, refuses to conclude the transaction. The action for passing of title can be exercised in several fields but most of the actions are in the context of the sale of immovables.

Requirements for an action in passing of title

In order to be able to file an action for passing of title, certain conditions must be met :

• The existence of a valid promise to purchase;
• The transmission of a formal notice to the other party, by which the co-promoter has demanded the respect of the commitments agreed upon in the promise, although its absence is not necessarily fatal;
• The presentation of a deed of sale in conformity with the conditions of the promise to purchase, this requirement being interpreted and applied with a certain flexibility and not in a strict manner;
• For the buyer, demonstrate that he or she is financially able to pay the sale price, i.e. to prove the availability of funds. This requirement has also been made more flexible;
• To have initiated your recourse in passing of title within a reasonable delay.

Reservations

Although in practice, the action in passing of title allows the buyer to force the seller to hand over the titles of ownership of the immovable or to oblige the buyer to purchase the immovable that is the subject of the promise, in certain situations the action in passing of title cannot be exercised :

• When the immovable is already sold to a third party. It would then be impossible to request the nullity of the sale between the seller and the third party, or to force the passing of title.  However, recourse remains possible against the seller, in contractual responsibility. Similarly, against the third party who purchased the property, in extra-contractual liability, provided that the latter is in bad faith, for example, a third party who knew that the seller was violating a promise to purchase by selling him his property would be considered to be in bad faith.
• When conditions were attached to the promise to purchase and they were not met, for example, the impossibility for the buyer to obtain financing or the pre-purchase inspection which is considered a defect.

Time limit and pre-registration

It can take up to 2 years to obtain a judgment in an action for passing of title, so it is important to ask yourself the right questions before undertaking such an action. Given this delay, in order to protect your right on the immovable, it is possible to make a pre-registration in the land register of the action in passing of title in order to temporarily prevent transactions that could be made on the immovable. Do not hesitate to contact our team to discuss your options in the context of an action in passing of title, we will be pleased to advise you.