ImmoMulti — a direct buyer of income properties on the North Shore — regularly meets owners who are surprised to learn, at the moment of selling, that their building sits on an emphyteutic lease. Emphyteusis is a real right that lets you hold and operate a building on land owned by someone else, for a long term — from 10 to 100 years — on condition of improving it. Selling such a property does not mean selling full ownership: you transfer your emphyteutic right. This distinction changes everything about the price, the financing and how the transaction closes at the notary. Here is what a seller needs to understand, verified at the source in the Civil Code of Québec.
What exactly is emphyteusis?
Emphyteusis is the right that allows a person, for a certain time, to use fully an immovable belonging to another and to draw all its benefits from it, provided the person does not endanger its existence and on condition of making constructions, works or plantations that durably increase its value. That is the exact definition of article 1195 of the Civil Code of Québec.
In practice, an emphyteutic arrangement involves two players: the owner of the land (sometimes called the ground owner) and the emphyteutic lessee, the one who holds the right to operate the building. The lessee usually pays a rent to the owner and undertakes to improve the immovable durably — to build, renovate, maintain. It is precisely this obligation to improve that distinguishes emphyteusis from an ordinary lease.
Emphyteusis is established by contract or by will, and its term is capped: under article 1197 of the Civil Code, it may not be less than 10 years nor more than 100 years. If the deed provides for a longer term, it is reduced to 100 years. This is therefore a very long-term commitment, often passed from one owner to the next through successive sales.
Source: Civil Code of Québec, articles 1195 and 1197 (emphyteusis), LégisQuébec — Government of Québec.
Selling the property: you transfer a right, not the land
When you sell a property held under emphyteusis, you do not transfer full ownership of the land: you assign your emphyteutic right for the remaining term of the lease. The buyer becomes the new emphyteutic lessee and inherits your obligations toward the owner of the land.
This is the point most misunderstood by sellers. An ordinary property combines the land and the building in a single full ownership. An emphyteutic property is a building you operate on someone else's land. At the time of sale, the notarial deed transfers the emphyteutic right — nothing more, nothing less.
Article 1200 of the Civil Code sets out how far your right extends: the emphyteutic lessee has, in respect of the immovable, all the rights attached to the status of owner, subject to the limitations of the chapter and the deed constituting emphyteusis. In other words, you operate, lease and collect the rents almost like a full owner — but your right is time-limited and framed by the original contract.
For the buyer, this means the deed constituting emphyteusis absolutely must be examined: remaining term, amount of the rent, renewal conditions, maintenance obligations, resolution clauses. A notary will verify these elements in the land registry, where the emphyteusis is published. It is this title examination that brings out all the particularities of the file.
What to verify before listing your property
- The remaining term left to run on the emphyteutic lease
- The amount and indexation of the rent paid to the owner
- The renewal or non-renewal clauses
- Your improvement and maintenance obligations still owing
- The identity and rights of the owner of the land
How emphyteusis affects the value of your plex
All else being equal, a plex or multi-unit building held under emphyteusis generally sells for less than a comparable property in full ownership, because the buyer does not receive the land and the right is limited in time. The shorter the remaining term, the steeper the discount.
The logic is simple from the buyer's standpoint: they are paying for a right that will expire. A property with 80 years left on its emphyteusis approaches full ownership; a property with 12 years left is worth considerably less, because the buyer knows they will soon have to return the immovable to the land owner or renegotiate. This erosion of value accelerates as the expiry approaches.
Two other factors weigh on the value of your emphyteutic multi-unit building. First, the rent paid to the land owner reduces net operating income — and therefore the price an investor can justify based on yield. Second, the uncertainty around end-of-lease clauses makes some buyers hesitant, which shrinks demand. To objectively estimate the effect on yield, a tool like ImmoMulti's yield calculator helps isolate net income after the rent.
Mind the remaining term
Do not assume your property is worth the "market price" of an equivalent plex in full ownership. On an emphyteusis with a short remaining term, the gap can be significant. Establish the exact term in the land registry before setting your sale price.
Financing and mortgage: the points to watch
The emphyteutic right is a real immovable right that can, in principle, be mortgaged. But many lenders are more cautious: they factor in the remaining term of the lease and the clauses of the constituting deed, which can make financing shorter, harder or more expensive.
For a buyer who needs a loan, emphyteusis adds a layer of analysis. Many institutions require the loan amortization to end well before the emphyteusis expires: they do not want a mortgage balance that would remain after the extinction of the very right securing the loan. A short remaining term can therefore reduce the amortization available, increase the required down payment, or even lead to a refusal.
This reality has a direct consequence for you, the seller: your pool of buyers narrows. A buyer who could have obtained conventional financing on a plex in full ownership may hit a refusal on the same building under emphyteusis. Note too that, to sign a mortgage in Québec, using a notary is mandatory, and the deed is published in the land registry.
Emphyteusis versus full ownership: the comparison table
For a seller, it helps to visualize how an emphyteutic property differs from a plex held in full ownership. Here are the main gaps that influence the sale of a multi-unit building.
| Criterion | Full ownership | Emphyteusis |
|---|---|---|
| Land | You own it | Belongs to another (the owner) |
| What you sell | Land + building | The emphyteutic right only |
| Term of the right | Unlimited | 10 to 100 years (art. 1197 C.C.Q.) |
| Rent to pay | None | Yes, to the land owner |
| Management rights | Those of the owner | All those of the owner, framed by the deed (art. 1200) |
| Financing | Standard | More cautious, often shorter |
| End of the right | Does not exist | Return of the immovable or renewal |
This table does not replace the analysis of your constituting deed: every emphyteusis has its own clauses. Some emphyteuses may in fact be renewed without the lessee being required to make new constructions, under article 1198 of the Civil Code, in the cases it provides for.
"Emphyteusis is the right which, for a certain time, allows a person to use fully an immovable belonging to another and to draw all its benefits from it […] on condition of making constructions, works or plantations that durably increase its value."
— Article 1195, Civil Code of Québec
Selling an emphyteutic property on the North Shore
The sale of an emphyteutic right closes by notarial deed published in the land registry, like an ordinary sale, but with an added review of the constituting deed and the remaining term. Some traditional buyers hesitate; a specialized buyer can assess these files faster.
If you hold a plex, a triplex or a larger multi-unit building under emphyteusis on the North Shore — Terrebonne, Mascouche, Blainville, Boisbriand, Saint-Jérôme, Saint-Eustache or Deux-Montagnes — the sale calls for a little more preparation. Gather the constituting deed, proof of rent payment and the history of improvements: these documents reassure the buyer and speed up the notary's title examination.
This is precisely the kind of particular file where a direct buyer makes a difference. Where a traditional buyer gets discouraged by the complexity of emphyteusis or runs into a financing refusal, ImmoMulti analyzes the remaining term, the rent and the deed clauses to make a realistic offer — no broker, no commission, with a proposal within 48 hours. To explore your options, see our page on selling an income property on the North Shore or write to us directly.
Whatever path you choose, one rule holds: consult a notary for your specific situation. Emphyteusis is a technical right, and every constituting deed is unique. A professional opinion will spare you unpleasant surprises at closing.
Informational content only. Does not constitute legal or tax advice. Civil Code provisions are cited from the official source; consult a notary for your specific property and situation.
