ImmoMulti — a direct buyer of income properties on the North Shore — knows it well: the price written in the promise to purchase is almost never the exact amount the seller receives at closing. In between sits the statement of adjustments, the document the notary prepares to prorate, based on the sale date, every item paid in advance or in arrears: municipal and school taxes, current-month rents, heating oil or propane in the tank, utility accounts. For an income property, these adjustments can represent several thousand dollars added to — or subtracted from — your final cheque. Understanding each line in advance means signing with no surprises.
What is the statement of adjustments at the notary's office?
The statement of adjustments (état des ajustements) is the document the notary prepares before signing the deed of sale. It prorates, based on the closing date, items paid in advance or in arrears — taxes, rents, heating oil — and derives a net balance that is added to or subtracted from the price. That net amount is what the seller actually receives.
When you sell a plex or a multi-unit building on the North Shore, the closing date rarely falls exactly on the first day of a billing cycle. You may have paid the municipal taxes for the whole year, collected the full month's rents, or had your heating-oil tank filled the week before. The notary's job is to do the accounting: who paid what, for which period, and who owes whom.
According to the Chambre des notaires du Québec, the transaction date, the closing date and the reimbursement date correspond to the date on which the sale is performed — that is, the signing of the deed. This pivot date splits each item between the "seller" period and the "buyer" period. The notary presents the result a few days before signing, so both parties can validate it.
Source: Chambre des notaires du Québec — "The transaction date and closing date correspond to?"
How does the notary prorate municipal and school taxes?
The notary prorates municipal and school taxes based on the number of days each party owns the property during the tax year. The buyer is responsible for taxes from the day they become the owner. If the seller prepaid, the buyer reimburses the portion after closing; if taxes are unpaid, the seller settles them or credits the buyer.
Taxes are almost always the largest adjustment when selling an income property. The logic is simple: taxes cover a full year, but you only own the property for part of that year. The Chambre des notaires du Québec specifies that the buyer is responsible for property, municipal and school taxes as soon as the deed is signed or on the date of taking possession set out in the promise to purchase.
Two scenarios arise depending on whether you have paid:
- Taxes already paid for the year: the seller advanced money for a period the buyer will benefit from. The buyer reimburses the portion covering the days after closing. This adjustment favours the seller.
- Taxes unpaid or partially paid: the seller must settle the balance or credit the buyer for the portion covering their own ownership period. This adjustment reduces the seller's cheque.
The Chambre des notaires also notes that the notary must obtain the official tax statements from the municipality to make sure all municipal and school taxes have indeed been paid by the seller before finalizing the proration. A seller who provides up-to-date accounts quickly speeds up this step considerably.
| Item | Typical situation | Effect on seller's cheque |
|---|---|---|
| Municipal taxes prepaid | Annual account settled early in the year | + (buyer reimburses the balance) |
| School taxes prepaid | Account settled for the school year | + (buyer reimburses the balance) |
| Taxes unpaid | Instalments late or not yet due | − (credited to the buyer) |
Source: Chambre des notaires du Québec — "At what moment do I become responsible for paying property taxes?" and Éducaloi — "Real estate purchase: fees to plan for"
Who keeps the current-month rents at closing?
Rents paid in advance for the current month are prorated. Because rent is generally payable on the 1st, the seller has already collected the full month and credits the buyer the portion covering the days after the sale. Sale on the 15th: the seller keeps the first half, the buyer receives the second.
For an income property, rents are an adjustment specific to selling a multi-unit building. In Québec, dwelling rent is usually payable on the first day of the month. As a result, on the closing day the seller has already collected the full month's rent from every tenant, even though part of that month now "belongs" to the buyer.
So the notary prorates the closing-month rent by number of days. Take a triplex in Terrebonne whose three units bring in $4,200 per month, sold on June 15. The seller collected the $4,200 on June 1 but keeps only the portion from the 1st to the 14th: the portion from the 15th to the 30th (roughly half) is credited to the buyer on the statement of adjustments. This adjustment lowers the net amount the seller receives, but it is perfectly normal — the buyer earns the income from the day they become owner.
Preparing the rent side before closing
- Provide the up-to-date list of leases with each unit's rent
- State the payment date (usually the 1st of the month)
- Flag any late rent or any unit vacant on the sale date
- Hand over the leases and the tenant roster to the buyer
Do tenant deposits have to be transferred to the buyer?
In most cases, no — because security deposits and requiring a last-month deposit are illegal in Québec. A landlord may only require the first month's rent at lease signing. So there is normally no deposit to transfer to the buyer, unlike in other Canadian provinces.
This is where selling a plex in Québec differs sharply from selling a rental building elsewhere in Canada. According to Éducaloi and the Tribunal administratif du logement, a landlord has no right to require a security deposit, nor to make a tenant pay several months of rent in advance. The only amount a landlord may ask for at lease signing is the first month's rent.
In practice, this means a seller of a North Shore multi-unit building normally holds no last-month deposit to hand over to the buyer. There is nothing to adjust on this account: the "tenant deposits" line of a Québec statement of adjustments is usually empty. This is an important difference to know, because buyers used to the Ontario or Western markets sometimes expect a deposit transfer that simply does not exist here.
Watch out for illegal lease clauses
If an old lease contains a "security deposit" or "last month paid in advance" clause, that clause is without effect in Québec. If, exceptionally, such an amount was actually collected from a tenant, it must be disclosed and handed to the buyer via the statement of adjustments, since it remains owed to the tenant. When in doubt, have your notary validate it.
Source: Éducaloi — "The security deposit: illegal, but widespread" and Éducaloi — "Payment of rent"
How are heating oil, propane and utility accounts adjusted?
Heating oil or propane remaining in the tank is measured on the closing day, and the buyer reimburses its value to the seller at current prices. Electricity accounts in the owner's name are generally closed via a meter reading then reopened in the buyer's name, each party paying their own consumption.
If your plex is heated with oil or propane, the fuel left in the tank still belongs to you at closing — you paid for it. So the notary adds an adjustment in your favour to the price: the tank is gauged (or a reading provided) on the sale day, and the buyer reimburses you the value of the remaining fuel at current prices. It is one of the items notaries regularly list among things to prorate, alongside condo fees paid in advance.
For utility accounts — electricity for common areas or an owner-occupied unit — the mechanics differ. Rather than a proration, Hydro-Québec accounts in the owner's name are usually closed at the closing date via a meter reading, then reopened in the buyer's name. Each party thus pays its actual consumption. Where a prepaid contract or a balance straddles the sale date, it may be carried to the statement of adjustments — which is why it pays to confirm the details with your notary.
How can you avoid surprises at signing when selling your plex?
Gather your up-to-date municipal and school tax accounts, the list of leases with rents and their payment date, and the heating oil or propane balance early. A prepared seller receives the statement of adjustments without surprises, validates the net amount quickly and signs with no friction.
Most "surprises" at closing are not errors: they are normal adjustments the seller simply had not anticipated. When selling an income property on the North Shore, a savvy seller keeps in mind that the net amount can differ from the sale price by several thousand dollars, in either direction.
Here is the checklist we recommend to every owner of a multi-unit building before going to the notary:
- Municipal and school tax accounts up to date, with proof of payment — the heaviest line of the statement of adjustments.
- Lease register with each unit's rent, the payment date and any arrears.
- Fuel balance (heating oil or propane) and supplier contact for the gauge reading.
- Utility accounts in the owner's name identified for closing via meter reading.
- Lease review to spot and neutralize any illegal deposit clause.
ImmoMulti: a clear net amount before closing
We are a direct buyer of income properties on the North Shore. Even before signing, we review the adjustment items with you — taxes, rents, heating oil — so your net cheque holds no surprises. No broker, no commission. Get an offer within 48 hours.
To see all the steps and costs that come with a transaction, also read our guide to the costs of selling a plex in Québec and our multiplex yield calculation explained. A seller who masters their costs, taxes and adjustments approaches closing from a position of strength.
Informational content only. Does not constitute legal or tax advice. Adjustment practices and legal requirements can vary; consult your notary for advice specific to your property and transaction.
