July 17, 2023 - The Quebec Court of Appeal recently rendered an important decision on divided co-ownership, in the case of Syndicat des copropriétaires du 310, 320, 330 et 340 Boulevard Industriel c. 9322-0549 Québec inc., which should in principle put an end to a controversy that has lasted for several years.
We know that a declaration of co-ownership is considered a contract, but it is not a simple contract; it is in fact a "social contract" for the people who are subject to it, by becoming co-owners.
When the Civil Code of Québec came into force in 1994, the legislator provided that declarations of co-ownership consist of three distinct parts: the constituting act of co-ownership, the description of the fractions and the by-laws of the immovable. The importance of the first two sections led the legislator to require that any amendment to them be notarized and published in the land register, to allow everyone, especially future buyers, to be informed.
However, an amendment to the by-laws of the immovable did not require such formalism, the legislator considering that this would become too restrictive and costly. Thus, once an amendment to the by-laws of the immovable was duly adopted by the general meeting of co-owners, it was sufficient to file it in the register of co-ownership. However, this was without counting on the fact that condominiums sometimes operate informally, or even deficiently. And that the laxity of administrators and co-owners can cause rules to be flouted or distorted, without the slightest intervention, and without leaving obvious traces. This led to various disputes. However, a 2011 decision of the Quebec Court of Appeal, in the Lavallée v. Simard case, by relying on a general principle applicable to contracts, ruled that the co-owners by their actions – or their waiver of action – had then tacitly modified the declaration of co-ownership. This decision was followed in various cases, creating a controversy decried by the doctrine, in particular because of the uncertainty that this entails for a future buyer seeking to know the state of the regulations in a co-ownership, when no writing is proof of a modification of the applicable rules.
This situation led the legislator to specify, in Bill 16, that any amendment to the by-laws of the immovable by the general meeting of co-owners must necessarily be the subject of an express written decision, which must then be filed with the co-ownership register. The bill even took the trouble to specify that this amendment to article 1060 of the Civil Code of Quebec is intended to be "declaratory", to clearly establish that this should have been the understanding, as early as 1994, and to set aside the Lavallée decision.
However, despite the amendment to article 1060 C.C.Q. and its declaratory effect, in force since January 2020, some subsequent decisions continued to follow the divergent jurisprudential trend, still recognizing that a tacit modification to the declaration of co-ownership had occurred. The most recent decision of the Court of Appeal sets the record straight, to use the well-known expression, and should finally – we hope – put a definitive end to this controversy.
Montreal, July 17, 2023
Therrien Couture Joli-Cœur S.E.N.C.R.L
1100, boul. René-Lévesque O.,
Bureau 2000
Montréal (Québec) H3B 4N4
Tél. : (514) 335-9595 / sans frais 855 633.6326
To read the entire judgment, you can click on this hyperlink.
