PRE-EMPTION RIGHTS GRANTED TO MUNICIPALITIES AND … MORE
Bill 37, An Act to amend various legislative provisions mainly with respect to housing, was sanctioned on June 10th. It amends several Acts, including those in the municipal sector, by amending the Cities and Towns Act and the Municipal Code of Québec. These amendments allow municipalities, intermunicipal boards and transit authorities the power to acquire immovables through a right of pre-emption.
Its operation is identical to that granted to the City of Montreal a few years ago. As such:
By by-law, the municipality shall determine the territory in which its right of pre-emption may be exercised and the municipal purposes for which immovables (other than those of a public body) may be acquired. The municipality may, for these purposes, act as mandatary of other municipal bodies, which are the intermunicipal board and a public transit authority.
This right of pre-emption is exercised subject to the right of pre-emption provided for in the Cultural Heritage Act.
Subsequently, the municipality publishes in the land register a notice of the right of pre-emption and this notice is sent to the owner. The owner identified in the notice may not, on pain of nullity, alienate the immovable if he has not provided a notice to the municipality of his intention to alienate it. The owner may, however, alienate it from a person related to it within the meaning of the Taxation Act or from a public body within the meaning of the Act respecting Access to documents held by public bodies and the Protection of personal information.
The notice is valid for 10 years.
When the owner wishes to dispose of his immovable and, as a result, receives an offer to purchase, he must notify the City. The notice shall indicate:
- the selling price;
- the conditions of the alienation;
- the name of the buyer; and
- if there is a non-monetary consideration, in whole or in part, then the notice must contain a reliable and objective estimate of the value of the non-monetary consideration.
The owner is not expected to provide a copy of the offer received.
The City has 60 days to exercise its right of pre-emption at the price and conditions set out in the notice.
If the notice contained an estimate, the price paid by the City is increased by an equivalent amount.
During the 60 day period, the City may request any information from the owner to enable an assessment of the condition of the immovable and with a notice of 48 hours, the City may have access to the immovable to carry out any study or analysis at its own expense.
If the City refuses or does not send any notification within 60 days, it is deemed to have waived its right and must cancel its notice of pre-emption.
If the City exercises its right of pre-emption, the sale is made within 60 days of the City’s notification to the owner.
If there is a failure to conclude a “notarized contract”, the City becomes the owner of the immoveable by registering a notice of transfer of ownership in the land register, which will be served on the owner at least 30 days before registration in the land register.
If the City acquires the immovable, it must compensate the third party who wanted to acquire the immovable for its reasonable expenses incurred in negotiating its proposed purchase.
As you may know, the term “alienate” includes the term “mortgage.” Such is not the case here. In this instance it is specific to the transfer or sale of a building that is
By Jean Proulx