Right to cancel the preliminary contract

Real estate developers who are not the holders of the appropriate license for the construction of the Régie du Bâtiment du Québec may have a legal existence, be listed in the yellow pages and advertise in newspapers or on the Web. However, before signing a preliminary contract for the purchase of an apartment in a new construction, make sure that the chosen developer is accredited by Garantie de construction résidentielle (GCR) and holder of the sub-category of a license from from the Régie du bâtiment du Québec (RBQ), depending on the type of buildings (house or condo) you want to acquire.

The right

You should know that in the context of a preliminary contract, that is to say when the sale of a building for residential use, built or to be built, is made by a builder to a natural person, the In certain circumstances, the buyer can have a sale canceled if the contractor who is to build it does not hold an appropriate license.

Building Act

A priori, the wording in Article 50 of the Building Act allows the conclusion that a preliminary contract can be canceled, in the absence of an appropriate license that a contractor must hold. However, a paragraph states that "a request for cancellation cannot be received if it is established that the requester knew that the contractor was not in possession of the appropriate license".

A judgement

The Court of Quebec, small claims division, has already rendered a decision on this issue. She ruled in favor of a future buyer, who demanded the cancellation of his preliminary contract signed two years earlier, as well as the reimbursement of a deposit in the amount of $ 10,000. His request was motivated by the fact of non-execution or delay in execution of the works, as well as a non-existent building license.

In this case, the buyer does have a license number listed in his preliminary contract. But after doing some research at the Régie du bâtiment du Québec, he discovered that this number did not belong to the builder. And that its real owner was not authorized to build new residential buildings. Relying on the buyer's ignorance of the lack of license, as well as on said article 50, the judge therefore canceled the preliminary contract and ordered the reimbursement of the aforementioned deposit.

WHAT YOU SHOULD KNOW! Article 50 of the Building Act stipulates in particular the following: "A person who is not himself a contractor who has entered into a contract for the execution of construction work with a contractor who is not the holder of the appropriate license may request its cancellation ".

WHAT TO KEEP IN MIND: To consult the decision rendered by the Court of Quebec, small claims division, click on this hyperlink.

WARNING! The lack of a building license or an adequate license will not (systematically) be grounds for canceling the preliminary contract. To obtain this cancellation, the future buyer must demonstrate that he was not aware of a non-existence of a license, when signing the preliminary contract.

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Keywords: Preliminary contract (promise to purchase), Developer, Régie du bâtiment du Québec (Québec Building Board), Licence, Retractation, Garantie de construction résidentielle (Residential Construction Guarantee)

Right to cancel the preliminary contract

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