Notaries’ new monopoly on the preparation of legal documents is driving up the cost of mortgage transfers in Quebec, says the MEI

Montreal, August 29, 2024 – A new interpretation of Quebec’s Notarial Act would almost double the cost of a mortgage transfer in the province, according to a study published this morning by the Montreal Economic Institute.

“With its new interpretation of the Act, the Chambre des notaires has monopolized the preparation of legal forms for mortgage transfers,” states Gabriel Giguère, senior policy analyst at the MEI and author of the study. “Since these documents must now be completed by notaries rather than paralegals, the process is much more expensive than it used to be.”

Until recently, the legal documents required for a mortgage transfer were completed by specialized processing centres and then checked by a notary before they added their signature.

The cost of such transactions was about $850.

But since the adoption of a recent reform of the Notarial Act, the Chambre des notaires du Québec has been advocating a reading of the Act whereby only notaries are authorized to prepare certain legal documents.

The new cost of such a transaction, in which the documents would be completed entirely by a notary, would be somewhere in the region of $1,500, according to the MEI. This represents about a 75% increase in cost.

A representative of the notarial profession confirmed in a parliamentary committee hearing that the processing centres had helped to bring the price of a mortgage transfer down to a point where notarial services were no longer competitive.

The MEI researcher explains that the behaviour of the Chambre des notaires du Québec is a classic example of what is known in economics as “rent-seeking.”

“Since notaries couldn’t compete on price, they used the legislative system to recapture the market share they had lost,” explains Mr. Giguère. “The result is an increase in profits for notaries, at the expense of their Quebec clients.”

The MEI study is available here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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