Life in a co-ownership has its advantages. First, the cost of buying a co-ownership unit is, on average, less than a single family home. With co-ownership, certain costs—such as maintenance or building repairs—can be divided among the co-owners.
However, in recent years, many co-ownership professionals and managers have noticed that too often buildings are in bad shape because of poor management. In this context, running a co-ownership has always been subject to some legal limitations, and, since 2018, even more new rules have been adopted. Not only do real estate brokers specializing in the sale and purchase of co-ownerships know these new rules inside and out, they can also give you good advice about rules that will have a decisive impact on your transaction. Two of the new rules are explained below.
Co-ownership insurance
A number of rules regarding co-ownership insurance have been created. Notably, the syndicate of co-owners now has the obligation to take out “insurance against ordinary risks providing for a reasonable deductible and covering the whole of the immovable, except improvements made by a co-owner to his portion”[1]. With regard to the previous point, the syndicate must also include in its register a “description of the private portions that is sufficiently precise to allow any improvements made by co-owners to be identified”[2]. The amount insured must cover the reconstruction of the immovable in accordance with the standards, usage and best practices applicable at the time. This amount must be evaluated every five years by a member of the Ordre des évaluateurs agréés du Québec[3].
Furthermore, the syndicate must establish a self-insurance fund to pay the deductibles provided for by the insurance taken out and “to make reparation for injury caused to property in which the syndicate has an insurable interest, where the contingency fund or an insurance indemnity cannot provide for such reparation”[4]. The syndicate must also take out civil liability insurance that meets certain criteria for members of the board of directors, officers of the general meeting and co-owners[5].
Maintenance log and contingency fund
Since the Civil Code of Québec took effect in 1994, the syndicate of co-owners has had the obligation to maintain a contingency fund “according to the estimated cost of major repairs and the cost of replacement of common portions” and exclusively for such repairs and replacements[6]. New rules have since been added to this obligation.
Bill 16, passed in December 2019, stipulates that, every five years, the board of directors must obtain “a contingency fund study establishing the sums necessary for the fund to be sufficient to cover the estimated cost of major repairs and of replacement of common portions”[7]. This study will help the syndicate to make an informed decision as to the amount to be paid into the contingency fund. This study must also be “conducted in accordance with the standards established by a government regulation, which designates among other things the professional orders whose members are authorized to conduct such studies.”[8].
In addition, the syndicate’s board of directors has the obligation to establish a maintenance log for the immovable in which maintenance that has been done or needs to be done is described[9]. The log must be kept up to date and reviewed periodically. “The form and content of the maintenance log and the manner in which it is kept and reviewed, as well as the persons who may establish and review it, are determined by government regulation”[10].
Brokers affiliated with RE/MAX’s Coproprié-T program
The content in this article is only a short summary of the new rules that have taken or will soon take effect, but the process of buying or selling a co-ownership has become increasingly complex. There are a number of things that potential buyers have to check if they want to make sure the co-ownership being considered is managed soundly; and the seller has to be able to reassure them about this.
RE/MAX is a network of real estate brokers specializing in the sale, purchase and rental of divided co-ownerships throughout Québec. These professionals are able to obtain and review all documentation relevant to the transaction and advise you accordingly. Brokers affiliated with RE/MAX’s Coproprié-T program have access to an exclusive training program called Coproprié-T, which has been specially designed for co-ownership and allows them to maintain high quality service standards for transactions involving divided co-ownerships. This program is also offered in partnership with the founder and president of CondoLegal.com, an authority in co-ownership law in Québec.
The program also provides brokers affiliated with the Coproprié-T program with useful tools to ensure that they cover all facets of this type of real estate transaction.
Good to know ! Would you like to be assisted by a qualified professional with buying or selling your co-ownership? Look for a broker affiliated with the Coproprié-T program on the RE/MAX website! https://www.remax-quebec.com/en/real-estate-brokers
Me Julie Smythe, MBA
Legal Affairs Director
RE/MAX Québec
https://www.remax-quebec.com
For the list of our Coproprie-T Affiliated brokers : https://www.remax-quebec.com/en/real-estate-brokers?Copropriet=1
[1] Article 1073 C.C.Q.
[2] Article 1070 C.C.Q.
[3] Article 1073 C.C.Q.
[4] Article 1071.1 C.C.Q.
[5] Articles 1064.1 and 1073 C.C.Q.
[6] Article 1071 C.C.Q.
[7] Article 1071, paragraph 2 C.C.Q., not in force
[8] Article 1071, paragraph 2 C.C.Q., not in force
[9] Article 1070.2 C.C.Q., not in force
[10] Article 1070.2 C.C.Q., not in force
