Horizontal co-ownership

When purchasing an apartment in a high-rise building, the buyer automatically becomes a co-owner in a vertical co-ownership, where the units are stacked on top of each other. However, when acquiring a house (detached, townhouse or semi-detached) located on a shared piece of land with other houses, it typically falls under horizontal co-ownership., where the units are side by side. In this type of co-ownership, the land surrounding the house may be designated as a private portion, but some areas, such as private roads, common spaces, and shared facilities (pool, parking), remain shared among co-owners and are considered common portion.

Common legal regime

Horizontal co-ownerships are governed by the same rules of the Civil Code of Québec than vertical co-ownerships. They are both subject to the registration of a declaration of co-ownership, and governed by Divided Co-Ownership Law, which requires the appointment of one or more directors and holding meetings of co-owners.

Horizontal cadastral plan

To create a vertical co-ownership, a land surveyor must prepare a horizontal cadastral plan, which will allow the allocation of separate lot numbers to each private and common portion. The land so divided in lots includes:

• Private portions: the houses;
• Common portions: the land on which the common equipment is situated (such as: roadways, a swimming pool, park and tennis court).

Contrary to residential towers, the lots are not superimposed; they are side by side. Each private portion includes the entire immovable, the space situated above it, up to a point above the horizon called zenith (in astronomy), along with the ground underneath, to a point situated in the center of the Earth, designated nadir. The boundaries of each lot are only those that make up its perimeter. Consequently, you are the only owner of your house.

Maintenance, repairs and replacement work

Unlike a vertical co-ownership, the envelope and structure of a building in a horizontal co-ownership are not considered common portions. Therefore, no contingency fund will be available to cover the replacement of the roof or windows when their lifespan ends. These works will be the sole responsibility of the owners of the affected units.

However, a contingency fund must be established to cover major repairs and the replacement of common portions, such as sewer or water supply systems. It is important to note that, according to the Civil Code of Québec, a contingency fund cannot be used to finance work on private portions, which includes roofs, windows, or cladding belonging to co-owners. Any attempt to include these elements in the fund could lead to legal challenges and expose the syndicate to fiscal penalties.

As a result, co-owners should individually plan for the maintenance and repair of their private portions to avoid disagreements or misunderstandings regarding the management of necessary work.

Negligence of a co-owner to see to the maintenance of his private portion

Most declarations of co-ownership stipulate that if a co-owner neglects to carry out necessary work on their private section, such as roof maintenance, the syndicate may be required to intervene. Referring to the community of co-owners, and by extension the syndicate, Article 1039 of the Civil Code of Quebec states that the syndicate of co-owners must ensure that the necessary work for the upkeep and maintenance of the building is carried out.

This negligence can not only make the co-owner liable for damages if they occur, but it can also affect the insurability of the building. Therefore, the syndicate has a vested interest in addressing this maintenance shortfall, as it is responsible for obtaining insurance coverage for both the common and private sections. Such a failure could increase the insurable risk, leading to consequences such as higher premiums, increased insurance deductibles, and a requirement to raise contributions to the self-insurance fund, based on the highest deductible.

Insurance coverages

Just like in vertical co-ownerships, syndicates of horizontal co-ownership must subscribe and maintain the insurance coverages required by Law. Yet, it is not a rare occurrence in horizontal co-ownership that the syndicate insures only the common portions. Many co-owners believe, wrongly – especially in co-ownerships comprising semi-detached homes – that they need to get insurance only for their dwelling and that in all logic, the insurance of the syndicate is not required for their private portion. In the case of a loss, the financial consequences can be dramatic for the co-owners and the directors as the latter could be held liable personally and even found guilty of gross negligence. This scenario can also have a negative impact on the resale of the said housing units.

Description of private sections and improvements

Article 1070 of the Civil Code of Quebec, amended in June 2018, requires syndicates of co-owners to establish a description of the private portions that is sufficiently precise to identify any improvements made by co-owners since the creation of the co-ownership. This description, referred to as the "reference unit," must be recorded in the co-ownership register and made accessible to all co-owners.

It is important to note that in a horizontal co-ownership, the building's exterior, including windows, the roof, and the front door, is considered part of the private section. Therefore, when drafting the description of the private portions, which must be submitted to the co-owners' assembly for a vote, it is essential for the syndicate to account for these external elements and their original condition.

Co-ownerships in phases

The concept of horizontal co-ownership is also used in co-ownerships in phases, by the method of concomitant declarations of co-ownership. In such cases, each residential tower (such as: phases I, II and III) will be governed by a vertical declaration of co-ownership. The equipment and land common to the various phases, including the land surrounding the towers, the roadways and the swimming pool, will be governed by an initial or horizontal declaration of co-ownership.

WHAT YOU SHOULD KNOW! Residential towers or small buildings in which at least two private portions are superimposed, are designated as vertical co-ownerships.

WHAT TO KEEP IN MIND: Horizontal and vertical co-ownership are governed by the same articles of the Civil Code of Québec. The administration and the management of a horizontal co-ownership are not different from a vertical co-ownership. In both cases, one must hold meetings of co-owners, appoint directors and prepare a provisional budget to pay the various expenses of the co-ownership.

WARNING! Many horizontal co-ownerships are dysfunctional, either on account of the ignorance of the rules of co-ownership, or by a lack of willingness on the part of the co-owners to manage their co-ownership.

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