Notaries are not known to be particularly loud and argumentative. But these days they are organizing to make their discontent known in Quebec. Since the end of October, Law 34 has signed the death warrant to modernize their profession… remote signatures. Customers have to move around their offices again like they did before the pandemic. A decision that will not be accepted.
Published at 6:30 am.
Notary Cassandra Vermette, owner of an office in Mirabel, can’t believe that she can no longer meet her clients via Teams and have them sign their wills remotely.
“I am very upset about the remote signing. My company does 95% of its book signings remotely. This changes the situation significantly. » The young notary looked for her clients on Instagram and particularly emphasized the importance of a notarized will for new parents. His customers are located throughout Quebec.
PHOTO PROVIDED BY CASSANDRA VERMETTE
Notary Cassandra Vermette has an office in Mirabel but worked almost exclusively remotely before October 24th.
Physical proximity doesn’t play a role in a will, she believes. “With a screen you can build a very strong relationship of trust. »
Notary Magali Drouin, who practices at the CMVR law firm in Beloeil, also does not understand this change in the law. When she learned on October 24 that the new law would come into effect that same day, she rushed to express her dissatisfaction on Facebook, which spawned “a monster.” Since then, I have learned that hundreds of notaries have taken it upon themselves to write a letter for MPs, in collaboration with law firms who also disagree with this part of the law.
The notaries believe that returning the signatures in person is “contrary to the spirit of accessibility and modernization” of their profession and that it “leads to inequality between citizens based on their geographical location,” their letter said.
The group then plans to start a petition that will be sent to Justice Minister Simon Jolin-Barrette.
PHOTO MARTIN CHAMBERLAND, THE PRESS
Notary Magali Drouin
“I don’t know anyone who is happy,” a third notary, Caroline Bessette, told me. In the offices with 12 notaries, three resigned because they were working 100% from home and lived too far away to meet in person. Others are forced to return to work in the evenings to accommodate clients who cannot travel during the day.
“The ultimate contradiction is that people come to my office to sign documents with their cell phones,” complains notary Jasmin Nicol from the SJJN law firm in Sainte-Julie. I can already see that my business customers are asking me if I’m deceiving them! »
Even though documents now have to be signed in person, there is no longer any need to pull out a pen. The law to modernize the notarial profession and promote access to justice puts an end to notarial documents in paper form. Digital media is becoming the norm. The Chamber of Notaries is also tasked with maintaining a digital central register.
Specifically: Once the documents have been read on a screen, customers receive an email and click on a link that acts as a signature. Sometimes the signing is done on a tablet. Only people who request this will receive a paper copy of their marriage or real estate purchase agreement.
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The “dematerialization of documents” is viewed very positively by the Professional Association of Quebec Notaries (APNQ), since more than 100,000 notarial documents were destroyed in the Lac-Mégantic tragedy. We see this as a necessary step towards modernity.
On the other hand, the return to face-to-face events – apart from exceptional cases, according to the law – is perceived by notaries as a big leap into the past.
PHOTO FROM KEVIN HOULE’S LINKEDIN PAGE
Kevin Houle, President of the Professional Association of Quebec Notaries
AFNQ President Kevin Houle told me that he had never heard of any “catastrophic cases” that could have justified ending remote signing, which has been allowed since the start of the pandemic. “So we were very surprised [par la décision de Québec]. » In his opinion, Simon Jolin-Barrette undoubtedly wanted to avoid having a notary work under the tropical sun since “the notary must have a shop window for ethical reasons”.
“100% virtual” notaries violate “the regulations that already apply.” We don’t need another law to achieve this,” adds Jasmin Nicol.
In Mr. Jolin-Barrette’s office, I was told that “opinions on remote signing vary greatly” and that the latter entails “risks regarding the validity of the notarial deed signed remotely.” Furthermore, international experience shows that this is not an acceptable and common practice in most Latin-type notarial offices.
In fact, Quebec was one of the few places in the world where it was possible to sign notarial deeds remotely, reports professor and director of the master’s program in notarial law at the University of Laval, François Brochu. This practice carries risks, he judges, since we do not have a national identity card, as is the case in Europe.
Do notaries make a storm in a glass of water? Before the pandemic, everyone went to the notary and everyone got along.
However, it is true that expectations have changed with the introduction of telecommuting, remote medical calls and mortgage negotiations with banks via video conference. For three years, notaries have adapted to the new reality, which their clients have appreciated. A return to the methods of the past, even if not so long ago, has not been without problems, as many employers who have asked for their employees to return to the office have discovered.
PHOTO ALAIN ROBERGE, LA PRESS ARCHIVE
The new Law 34, which modernizes the notary profession, risks significantly reducing the attractiveness of non-bank lenders, also known as virtual or “alternative”.
A new bill to extend the mortgage soon?
To benefit from a better mortgage rate, more and more Quebecers are turning to non-bank lenders, also known as virtual or “alternative”. However, there is a risk for mortgage brokers that the new Law 34, which modernizes the notary profession, will significantly reduce its attractiveness.
To attract customers, virtual lenders such as First National, Manulife, MCAP and MERIX cover the approximately $800 fee required to prepare the legal documents required in mortgage renewals.
By default, most of the work is entrusted to paralegals from two Ontario-based firms, First Canadian Title (FCT) and Fidelity National Financial (FNF). Once the files are ready, they are sent to notaries in Quebec who ensure that the necessary signatures are collected and the people’s identities are confirmed. They receive a share of the $800 for their services.
This practice, which had been practiced for years, became illegal on October 24th when Law 34 came into effect immediately.
From now on, only notaries are authorized to prepare mortgage files and must carry out all phases of the process themselves. The new law also requires them to obtain their customers’ signatures in person. Remote signatures are no longer permitted, except in certain exceptional cases.
Mortgage brokers fear that the combination of these two innovations in the law will have unfortunate and costly consequences for their clients.
“If the notary costs are too high, it is no longer worth changing lenders to get advantageous conditions,” complains Louis-David Lafortune-Boulard from Momentum. When real estate prices and interest rates are high, every tenth of a percent makes a big difference.
As an example, he cites the interest rate for a 4-year fixed-rate loan with virtual lenders is currently 5.64%, compared to 6.09% with banks. For a $300,000 mortgage, that’s about $80 per month, or $3,850 at the end of the term. Half of the savings are without the work of FCT and FNF notary fees, argues Mr. Lafortune-Boulard.
“What was interesting? [avec FCT et FNF], is that the transfers cost nothing. All savings went to the customers’ families. “They weren’t even aware of the costs,” adds the responsible manager and co-founder of apoint Hypothèque, Simon Lupien. Between 20 and 25% of customers choose a virtual lender (subrogation in technical jargon) as part of a mortgage extension.
In general, it is already disadvantageous to extend with your own bank, he continues. “If you stay with the same lender, it’s rare that you’ll get the best rate. […] Once the banks are not challenged, they won’t give a great interest rate. »
Apparently changes at the lender bring grist to the mill of the brokers…
However, it is not far-fetched to believe that the systematic inclusion of notary fees could harm consumers. Why should a bank offer the most attractive interest rate to a practically tied customer?
Like notaries, mortgage brokers are lamenting the return to in-person signings, which will force some of their clients to take time off work to travel. This could become an additional argument for not changing lenders if savings are minimal.
The question of fees also concerns brokers, especially in regions where notaries are used to setting up files with Desjardins and the National Bank, the province’s two main lenders. Some notaries charge $500 more if the lender is virtual, others completely reject these files, which are considered more complex.
Signing in person is a problem because the fee differences vary significantly depending on the region. “Notaries are twice as expensive in Gaspésie as in Montreal,” notes Simon Lupien. Is there an advantage to meeting a notary five minutes from home that costs twice as much? »
By signing documents remotely, mortgage brokers were able to easily find a notary who was familiar with this type of transaction because geographic location was not a factor.
From now on the mission becomes more difficult since the notary must have an office at a reasonable distance from the client. In regions without notaries, this could lead to “abuse”.
“In a region where Desjardins and the National Bank are very strong, notaries may say they don’t like virtual lenders because they require more work and charge $2,000 for a transaction.” [un renouvellement] » predicts Louis-David Lafortune-Boulard. His colleague Philippe Béland, owner of a brokerage firm affiliated to the Consortium Hypothécaire, fears that in certain regions it will simply be impossible to find a notary willing to draw up a file through a virtual bank.
At the moment some questions remain unanswered.
Will virtual lenders agree to transact business directly with notaries? Do they pay part of the bill or the entire bill? Will they turn their backs on the Quebec market because of its specificity (the profession of notary does not exist in the other provinces)?
So far, despite the law coming into force and the clear instructions from the Chamber of Notaries, FCT and FNF are continuing as before, a mortgage broker and a notary who work for these two companies confirmed to me.
The Ontario company FCT emailed me saying it can continue its work and that it “intends to do so.” […] in a manner that respects Quebec law.” She judges the “interpretation” made by the Chambre des notaires du Québec (CNQ) of Law 34 as “regressive and excessive.”
FCT also considers that the Chamber has “exploited” the amendments to the Notarial Law to reopen the debate on the legitimacy of the activity it carries out, even if its arguments were rejected “by the three levels of courts”. In fact, the case went all the way to the Supreme Court in 2019. The Chamber of Notaries ruled that the services provided by FCT usurped the profession of notary.
In reality, it is the entire mortgage industry in Canada that is responding to Bill 34. The Mortgage Professionals of Canada, which brings together brokers, lenders and insurers, wrote to the justice minister because it believes “unfortunately the law contains the following.” “There are some problematic elements regarding mortgage transactions,” it wrote in a letter to its members.
The vision is at odds with the Professional Association of Quebec Notaries (APNQ). “The notary is not just the person responsible for taking oaths. The minister [Jolin-Barrette] “I got it,” says its president Kevin Houle happily.
Obviously, neither the Supreme Court decision nor Bill 34 will have put an end to the dissent.