Quebec homeowners looking to renew mortgages could soon pay more in notary fees: MEI

Two people read documents together. (Mikhail Nilov/pexels.com)

Homeowners in Quebec may soon have to pay more in notary fees due to a reform to the province's Notarial Act.

According to a new study published Thursday by the Montreal Economic Institute (MEI), this change could almost double the cost of mortgage transfers in the province.

"There's this new interpretation of the Notarial Act that is currently being pushed by the notaries, which would give a monopoly to notaries on filling forms for mortgage transfers," explains Renaud Brossard, vice president of communications at MEI.

He explains that for people shopping around for the best rate when it's time to renew their mortgage, there are "some forms to fill out."

Until recently, these legal documents were first completed by a specialized processing centre before being checked by a notary at a cost of $850.

"Usually, these would have been filled out by legal assistants and then reviewed by a notary," Brossard said. "Now, notaries are trying to make this into their own monopoly, which significantly increases the cost."

That means homeowners looking to transfer their mortgages may soon have to fork out closer to $1,500 -- a 75 per cent increase in cost, according to the MEI.

This, Brossard notes, is called "rent-seeking."

"What notaries are doing is they're sort of exploiting the legal framework to get additional revenue at the expense of the consumer," he tells CTV News. "When you're renewing your mortgage, we're talking about such massive amounts of money, but notaries are trying to extract a couple of hundred dollars extra from Quebecers' pockets."

With interest rates still much higher than they were a few years ago, Brossard argues not all Quebecers want to pay extra for paperwork.

"When it comes to time to renew, it doesn't mean the same financial institution has the best rates, and that sort of competition between financial institutions has helped keep mortgage rates a little bit lower," he said. "By increasing the fee...it is certainly something bad for a consumer, but it's also bad in another way, where it lessens competition."

In addition, Brossard says diverse organizations are interpreting the reform differently -- and no one knows who's right.

"The notaries are interpreting those changes to the law as saying that they now have a monopoly on filling out these forms," he said. "The treatment centres are interpreting it differently. They're saying that they can still fill out the forms as long as it's still reviewed."

He notes the issue is currently before the courts.

CTV News reached out to the Chambre des notaires du Québec (CNQ), but has yet to hear back.