In a context where co-ownership in Quebec is facing major challenges in terms of transparency and financing of maintenance work, Me Yves Joli-Cœur, distinguished lawyer and president of the Regroupement des gestionnaires et copropriétaires du Québec (RGCQ), was recently highlighted in an article in the newspaper La Presse written by journalist Marie-Ève Fournier. The article, entitled “Transparency should shake up condo prices,” highlights the importance of the reforms introduced by Bill 16 and their potential impact on the real estate market.
By addressing the structural shortcomings in the management of co-ownership syndicates, these legislative changes represent a major turning point in ensuring the sustainability and value of co-ownership buildings in Quebec.
Towards responsible management of co-ownership properties
The average age of co-ownerships in Quebec, estimated at approximately 30 years according to the RGCQ, underscores the urgency of reviewing current practices regarding the management of contingency funds. These funds, intended to cover the costs of major work, are often insufficient, placing many co-ownership syndicates in a precarious financial position. Me Joli-Cœur, in his leadership role within the RGCQ and as founder of the Condolegal.com website, has been a strong advocate for the need for rigorous contingency fund studies and 25-year maintenance plans, now mandatory thanks to Bill 16.
Challenges faced by co-owners due to insufficient contingency funds
In his interview, Me Joli-Cœur predicts that buildings without appropriate asset management plans will be “downgraded” on the market. This means that the properties concerned could suffer a significant drop in value, creating additional pressure on co-ownerships that have not yet adopted such measures. The financial consequences for owners will be severe, particularly for those who must cover significant capital deficits. Me Joli-Cœur insists that transparency, although it may seem restrictive, is essential to avoid situations where buyers find themselves faced with unexpected bills.
The article also highlights that nearly 40% of co-ownership buildings do not have a sufficient contingency fund. This reality, long denounced by Me Joli Cœur, exposes co-ownerships to major economic risks. “We are talking about a [condo] stock in distress in Quebec,” he laments. The implementation of management plans and increased transparency should prevent these problems from getting worse.
Fairness in co-ownership: Bridging the financial equity gap
The issue of financial fairness between co-owners is at the heart of this reform. As the article points out, some co-owners enjoy common portions for years without contributing enough to the contingency fund, leaving new arrivals to bear the burden of major expenses. Bill 16 aims to restore this balance by imposing clear and binding rules for asset management.
Solutions for a sustainable future
Furthermore, co-ownerships that choose to ignore these new obligations could face skyrocketing management costs and insurance premiums. Me Joli-Cœur points out that these reforms are not just an administrative formality. They aim to preserve the value of real estate and protect owners from serious financial consequences.
The La Presse article also mentions the practical solutions discussed for co-ownership syndicates, which recommends not waiting for the law to come into force to undertake their contingency fund studies. This proactive approach could reduce costs and minimize negative impacts on current and future co-owners. In addition, implementing financial management strategies, such as investing contingency funds in high-yield accounts, is essential to optimizing available resources.
Conclusion: A proactive approach to protect co-ownership
Thanks to Bill 16 and the leadership of the Regroupement des gestionnaires et copropriétaires du Québec (RGCQ), co-ownership management in Quebec is undergoing a transformation. By adopting proactive strategies such as contingency fund studies and long-term maintenance plans, co-ownership syndicates can better anticipate future challenges and protect their members.
To learn more about these reforms and their implications, we invite you to read Marie-Ève Fournier’s article published in La Presse titled "Transparency Should Shake Up Condo Prices." Access the full article here: Link to the article.
Montreal, January 12, 2024.
