Each week, Me Ludovic Le Draoullec, lawyer at De Grandpré Jolicoeur, explains one article at a time, the modifications and additions made within Bill 16.
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Table of content
CHAPTER III DIVIDED CO-OWNERSHIP OF IMMOVABLES
SECTION I ESTABLISHMENT OF DIVIDED CO-OWNERSHIP
Art. 1039. Syndicate of co-ownership
With article 1039, the syndicate already had as a purpose “preservation of the immovable, the maintenance and administration of the common portions.”
The addition brought forward here by Law 16 is not very useful to the experts who had already deduced it from the tribunals’ interpretation of the Civil code of Quebec. However, it will at least allow for the convincing of skeptics: yes, the Board of Directors has effectively the obligation to execute the works that are necessary to the preservation and maintenance of the immovable.
Art. 1053. Act of constituting of co-ownership | Content | Other mentions
With this inclusion to article 1053, the penal clause officially becomes a clause of the constituting Act of a declaration of co-ownership.
This means that its adoption or modification requires a vote from the meeting of co-owners with a majority of 75% of the votes present or represented in the room, followed by a visit to the notary who will receive the act of amendment of the declaration of co-ownership and then publish it at the land Register of Quebec.
It is a major change that gives the penal clause its nobility: it is not merely a by-law of the immovable.
Art. 1060. Registration | Notice of registration
This addition serves to specify the formality required for a new By-law of the immovable or for an existing By-law amendment (Part II of the co-ownership declaration) once it is adopted by the general meeting of co-owners.
The directive is simple: the minutes of the meeting must mention the adopted by-law and the by-law must be included or added to the co-ownership Register, which must contain a file or section specifically dedicated to the By-law of the immovable.
One of the rare provisions of Law 16 that is declamatory, in other words it is deemed to have always existed. This means that syndicates of co-ownership should have always functioned this way. It therefore seems opportunistic for each syndicate to update its By-laws through a consolidation of its By-laws of the immovable, in order to verify if each By-laws applied in the co-ownership is effectively found in the minutes or resolution of a general meeting.
One thing for sure: No more “tacit modifications” !
Passed on June 1, 2022, Bill 96 makes another amendment to Section 1060. It reads as follows:
« The declaration and any amendments to the act constituting the co-ownership or the description of the fractions are filed exclusively in French at the Land Registry Office. The declaration is registered in the land register under the registration numbers of the common portions and the private portions. The amendments are registered under the registration number of the common portions only, unless they directly affect a private portion. However, amendments to the by-laws of the immovable must be made expressly, in minutes or in a resolution in writing of the co-owners, and it is sufficient for such amendments to be filed in the register held by the syndicate in accordance with. The amendments must be made exclusively in French.
The emphyteuta or superficiary, if any, shall give notice of the registration to the owner of the immovable under emphyteusis or on which superficies has been established ».
SECTION IV RIGHTS ANS OBLIGATIONS OF CO-OWNERS
Art. 1064. Contribution of co-owner | Different apportionment
This amendment to article 1064 is a consecration of the case law rendered in this area, particularly in the last decade.
It is now acquired that (1) ordinary repairs and maintenance charges of common portions for restricted use are exclusively paid by the co-owner using them, but that (2) major repairs and replacement charges are paid by all co-owners, unless the declaration of co-ownership provides for a different apportionment, which in practice is increasingly becoming the case.
Art. 1065. Acquisition of a fraction | Leasing of a private portion
The first new element in this renewed article 1065 is the obligation of the new co-owner to advise the syndicate of his acquisition within 15 days following it. This will certainly facilitate contact, begin communications, so that one becomes familiar with the By-laws of the immovable.
The second new element is the specification of an already-existing obligation: that of the landlord to advise the syndicate of the rental. There is also a new delay: 15 days for the owner to advise the syndicate of a rental, counting from the beginning of the lease. Not only is the name of the tenant required, but so is the duration of the lease and the date the By-laws were given to the tenant.
Art. 1066. Required or urgent work | Notice to the lessee
Article 1066, which concerns the impossibility for a co-owner to interfere with the carrying out of work required for the preservation of the immovable or for urgent works, was completed by mentioning the required notice to be sent when the unit is leased.
It is now further completed by mentioning the required notice to be sent when the unit is occupied by means other than a lease. It can effectively happen that an apartment is occupied without the signing of a lease, but that it is also not occupied by the co-owner (example: it is occupied by a family member or an occupant free of charge).
Art. 1068.1. Certificate of the syndicate | Remittance to co-owner | Obligations (not in force as at 28 March 2023)
Article 1068.1 is completely new. It consists of a new obligation of the seller of a condo and of the syndicate:
- The seller must give his/her promised buyer a certificate of the syndicate attesting to the condition of the immovable.
- The syndicate must write and sign this attestation and send it to the seller in the 15 days following the request. We still do not know what it will contain. The government must adopt a regulation on this subject soon.
Art. 1068.2. Documents or information | Owner of the fraction
Article 1068.2 is completely new. It consists of a new obligation weighing of the syndicate towards a promising buyer (the promisor): it must give the promisor any document or information on the co-ownership (removing anything that could harm the privacy of its occupants), with a copy to the seller.
The promisor therefore has the possibility to make this request to the syndicate to enable him to give enlightened consent prior to purchasing the condo.
Contrary to the obligation of having to give an attestation on the state of the co-ownership (article 1068.1 from last week), this article applies even before the transitional meeting (therefore when the developer still controls the administration, on a provisional basis, of the syndicate.
Art. 1069. Obligation of acquirer | Statement of common expenses | Adjustment
Article 1069 is modified but the change is minor. 1069 is the article that obliges all condo buyers to assume the payment of unpaid charges by the selling co-owner.
The change specifies that the buyer must pay the amount due, not only the capital, but also the interest. This specification was already largely accepted, both in jurisprudence and in practice.
SECTION V RIGHTS AND OBLIGATIONS OF THE SYNDICATE
Art. 1070. Register | Other documents | *Description of private portions
Article 1070 is modified. It always concerned the co-ownership Register, more specifically its contents and its availability to the co-owners.
Some of the unnoticed changes deserve our attention.
It is no longer the “address” of the co-owner that must be found in the Register, but his “postal address”. Here is a good mockery of those that thought an e-mail address could be used for everything. Article 1070 protects from afar personal privileged information such as phone numbers or e-mail addresses, which must not be collected or used unless “explicitly consented to”. The respect of digital privacy has found its protector.
It is also amusing to notice that the “name and address of each tenant” is removed from the co-ownership Register. While the Board of Directors must know who the tenants are, their identity is no longer found in the Register.
On a more detailed note, it is also indicated that the Register must also contain the written resolutions of the meetings of co-owners of Directors when a formal meeting is not held, as well as location certificates of the building, maintenance log and the contingency fund study.
Art. 1070.1. Consultation | Other conditions
Section 1070.1 is new. It deals with three aspects of the consultation of the Register of Co-ownership by a co-owner:
- The first aspect concerns the possibility for the board of directors to require the presence of a person of its choosing during the consultation;
- The second aspect concerns the supervision of the consultation, which is provided for by the general meeting of co-owners with detailed By-laws, in particular to provide for hours and access;
- The third aspect concerns the right to obtain a copy of the contents of the Register, the legislator appearing to require payment of a reasonable fee in order to be entitled to it.
The right to obtain copies? Physical presence of a supervisor? Reasonable hours? In 2022, in the age of digital platforms and shared records, this new section seems paradoxically from another time. It illustrates the unfortunate gap between social developments, which are rapid, and legislative changes, which are too rare.
Sanctioned on June 1, 2022, Bill 96 on the French language adds section 1070.1.1. It reads as follows: “The register and documents kept at the disposal of the co-owners, as well as any document drawn up by the syndicate for a co-owner, must be drawn up in French. The Office québécois de la langue française sees to the application of the first paragraph as if it were a provision of the Charter of the French language (chapter C-11). (Emphasis added)
To learn more about what this implies, and to know the list of documents that must be made available to co-owners, in French, consult the following article by Me Clément Lucas ” Les impacts du Projet de loi 96 en copropriété “.
Art. 1070.2. Maintenance log | Content
Article 1070.2 is new. It establishes the obligation of a maintenance log. This document is personalized to each immovable building. Contrary to the contingency fund study which relates to the replacement of common portions at the end of their useful life, the maintenance log rather deals with the maintenance of common areas so that they reach the end of their useful life in due time and not prematurely due to the lack of maintenance or to inherent defect.
We are still waiting for the government regulation that will provide more details on this document, but we already know that it is obligatory and will have to be ordered by the Board of Directors. It will have to be reviewed periodically, just like the contingency fund study.
Art. 1071. Contingency fund | Five-year report | Sums to be paid | Minimum amount (not in force as at 28 March 2023)
Article 1071 is a small revolution in the world of co-ownership. It creates the obligation to obtain a contingency fund study.
It is a fundamental document proper to each immovable building, dealing with the replacement of common areas at the end of their useful life, by establishing in advance its cost to give the syndicate a clear and precise expectation of the costs to come in the next 30 or 40 years. The study thus proposes a long-term assessment schedule.
The contingency fund can now be “partially in cash” as opposed to “entirely in cash” prior to the reform.
It is a change that is largely reduced by the fact the obligation that “its capital be guaranteed” …
A precision is also added that it is the Board of Directors and not the annual general meeting that determines its use. There is therefore no need for the meeting of co-owners to adopt the use of a million dollars from this fund when the time comes to replace such common portions.
Article 1071 brings forth new elements. It notably imposes the obligation by the syndicate to update its study every 5 years, as opposed to a study that could have been kept 30 years without any review. It is therefore better to create now a good relationship with your contingency fund study supplier.
We are still awaiting the government regulation that will give us more details on this document, namely on the identity of the professional and the nature of the recognized professional orders for such studies.
A particularly formidable addition for real estate developers concludes article 1071: when the government regulation will have been published, it will now be up to the developer to obtain the first contingency fund study, and if this is not done, the developer will have to contribute 0.5% of the reconstruction value of the building to the contingency fund, and nothing less! Here is a chilling provision that overall encourages developers to establish the first study as soon as the declaration of co-ownership is published, or as soon as possible after that.
Art. 1072. Contribution to common expenses | Contribution to the contingency fund | Notification to the co-owners
Article 1072 is modified to remove the 5% of the annual budget minimal contribution to the annual contingency fund.
However, the principle of the requirement of a minimal contribution to the contingency fund is not abolished, it is simply moved to article 1071 but does not correspond anymore to 5% of the budget. It now provides that the amounts to deposit are “fixed on the basis of recommendations made in the contingency fund study and taking into account the ongoing developments in the co-ownership, in particular the amounts available in the contingency fund”.
This change is significant as it obliges the syndicate to follow the contingency fund study and not to divert from it. This illustrates the degree of attention required on the part of the syndicate in choosing its contingency fund study supplier, to ensure that everything is provided for, including specific contributions to costs associated to common portions for restricted use that could be included in the declaration of co-ownership.
Art. 1072.1. Consultation
Art. 1079. Resiliation of the lease of a private portion | Termination of loan for use of a private portion
Article 1079 has always provided the right of the syndicate to ask for the resiliation of a lease before the Administrative Housing Tribunal, whether the landlord agrees or not.
The amendment provides for the same right regarding a loan for use and not of a lease. The procedure will not be however before the Administrative Housing Tribunal, but but before common civil law courts.
As surprising as it may seem, it could have been impossible before to exercise such a right on all types of building occupants. Now, however, it is possible.
Art. 1083.1. Plans and specifications of the immovable
It creates a bridge between the syndicate and other actors of the original construction other than the developer, with whom it is not used to deal with: the architect and the project engineer. Since January 10, 2020, it is now possible for the syndicate to require from these professionals the handing-over of the building plans and specifications, in exchange of applicable fees, without the fear of being told that it cannot under the pretext that the “syndicate is not the client.”
Indeed, the syndicate could just as well turn towards its developer, but sometimes, such an entity may have disappeared, may be bankrupt or simply unreachable. Such a secondary avenue is therefore very welcome.
Art. 1086. Disqualification | Replacement
Article 1086 has always existed but its drafting was problematic since it declared that the syndicate could replace a director being in default to pay his condo fees.
The amended article is better since it provides that a co-owner who has been paid his condo fees for more than three months is disqualified for the office of director: the individual cannot be elected and if he is in the office, he ceases to be a director, allowing the syndicate to replace him until the next annual meeting of co-owners. Afterwards, if the individual pays his condo fees, he does not become a director automatically since, as the article says: “he may then once again be elected as a director”.
Art. 1086.1. Minutes
Article 1086.1 is new: it imposes to the Board of Directors the obligation to send the minutes of a meeting to all co-owners within 30 days of the meeting.
This is not entirely accurate: a specification added by an amendment in the parliamentary adoption process gives this article another meaning. In fact, while the first version of the Act indicated the sending of “the minutes of the entire meeting”, the final adopted version now reads “the minutes of all decisions made during the meeting”.
It is therefore clear that the intention was to limit what would be sent to the co-owners, only to the decisions of the Board of Directors.
Art. 1086.2. Annulment or amendment of a decision
Art. 1086.3. Court order
Article 1086.3. is new and addresses conflicts that may arise within the Board of Directors: inability to make a decision, impossibility of reaching a quorum, systematic refusal or opposition of certain directors.
Faced with such situations, it is now possible to turn to the Court on a basis that we can consider urgent, given the delays the Board must often deal with.
The court’s latitude appears to be broad, as it can issue any order it deems appropriate in the circumstances. One can think of the decision itself on a specific subject, the obligation to resort to mediation or arbitration, etc.
Art. 1086.4. Provisional administrator
Article 1086.4 is new and revolutionary: a court may replace the Board of Directors of the entire syndicate by a provisional administrator, who is said to be unique, by setting out the limits of his or her powers.
This article is surprisingly expeditious. Nothing is said about who can request such a replacement or under what circumstances.
Rather than a specific judicial recourse like articles 1086.2 and 1086.3, this article seems to be a request that can be made in any type of procedure in co-ownership, particularly during proceedings because of the provisional aspect of the measure.
It should be noted that the term “provisional administrator” used in this article has nothing to do with the term “provisional administrator” used to designate the status of the promoter when he or she administers the syndicate before the first meeting, being that of transition.
SECTION VII GENERAL MEETING OF CO-OWNERS
Art. 1089. Quorum | Adjournment
Article 1089 remains the same but contains an important addition. It deals with quorum at meetings.
The addition consists of requiring that more than 50% of the votes be cast at all times in order to vote on a decision falling under article 1097 C.C.Q. (i.e., those which are taken with 75% of the votes in the room), and this even in an adjourned meeting.
In other words, adjourned meetings can always be held with less than 50% of the votes, but it will then be impossible to rule on a decision falling under article 1097 C.c.Q.
Art. 1090. Number of votes of co-owners | Presumption
Article 1090 is improved. For a long time, it was unclear whether two co-owners of the same fraction were exempt from signing a proxy for the meeting of co-owners if one of them was not present. Did the mere presence of one carry with it the presence of the entire unit’s share at the meeting?
The answer is now clear: yes. Evidently, it will not be considered as an automatic representation if the absent person has, on the contrary, indicated in writing that he does not want to be represented or that he wants to be represented by another person.
Also, the last provision added at the end of article 1090 will particularly stimulate arithmetical minds! The legislator says that the voting rights of the absent person are distributed in proportion to the rights of the others. This is the case of a unit with 3 or more co-owners. Indeed, in this case, it is necessary to know, for example, how the % of the absent co-owner will be distributed between the two present co-owners.
Art. 1092. et 1093. Number of votes of developer | Reduction | Developer
Articles 1092 and 1093 discuss votes of the developer (promoter) in a co-ownership of more than 5 fractions.
The amendment to these two articles is the same and is very technical. In fact, a reduction of votes will apply to the fractions of the developer under certain conditions, except for the one “which serves as his residence”. This expression is replaced by “occupied by the developer”, to cover residential as well as commercial or industrial condominiums.
Art. 1094. Deprivation of the right to vote
Article 1094 is amended to add the second sentence: it states that a co-owner who has been in default of payment for more than three months loses the right to vote at the meeting but may recover it if he pays everything owed.
This is a perfect example of a bad legislative amendment. First, because it is useless: it was already obvious that a co-owner who loses his right to vote because he was in default of payment could recover it if he paid. But then, and above all, because the use of the term “totality” leads to a most absurd situation: whereas the co-owner who is in default for 2 months will be able to vote, the one who is in default for 4 months but who pays before the meeting for only 2 months, will find himself in default for only 2 months, but will not be able to vote, because he will not have paid “the totality” of what is owed.
Faced with this curious situation, we can only recommend that you apply the loss of benefit of the term to any co-owner who is in default for 1 month or more, as your declaration of co-ownership surely provides.
Art. 1096. Decision of the syndicate
Article 1096 is amended to add that an amendment to the by-laws of the immovable (including an addition to or deletion of a by-law) must be adopted by an absolute majority of the votes of the co-owners present or represented at the meeting, better known as the “50% +1”.
This is the codification of a tradition which has been widely tried and tested for decades.
No more “tacit modifications”!
Art. 1097. Double majority
The double or reinforced majority provided for in article 1097 has been modified and this is major!
Since 1994, the decisions referred to in article 1097 required a double majority including at least 75% of the votes of all. This often led to not even voting on the resolutions concerned because the quorum was below 75%. This is now a thing of the past since the 75% is now calculated based on the votes of the co-owners present or represented at the meeting only.
Art. 1099. Reduction of number of votes
Article 1099 is amended for the sake of simplification.
Firstly, the article is no longer limited to the reduction of voting rights, but is extended to the loss of voting rights, i.e. co-owners who have been in default for more than 3 months.
Secondly, in such a case, the law states that the total votes of the other co-owners, not reduced or lost, are reduced by the same number. This simply means, for example, that if 25 votes are in default, the quorum will not be calculated on 100 but on 75 votes. This is not a major change since the practice already followed this rule.
Art. 1102. Decision without effect
Article 1102 has been reduced. Whereas before, a decision of the syndicate modifying the relative value, destination or use of a fraction without the consent of the co-owner could not be imposed on the co-owner, it is now limited to the relative value and destination.
This means that a decision of the syndicate could impose on a co-owner, without his or her consent, a change in the use he or she can make of his unit. Since the use of the private portions is governed by the by-laws of the Immovable, and such by-laws require a majority of the meeting, it seems useful that such an avenue has been closed.
Art. 1102.1. Minutes
Article 1102.1 is new and sets out the obligation for the syndicate to send to the co-owners the minutes of the general meeting of co-owners within 30 days of its holding.
This is particularly useful in the event that a co-owner contest a decision taken at the meeting, since the document is essential to his recourse.
Some declarations of co-ownership already provide for such a remittance, which is a good omen because it demonstrates the uselessness for a syndicate to include on the agenda of its meeting the item « Reading and adoption of the minutes of last year’s general meeting ». The minutes must be finalized, signed and sent to everyone within 30 days. There is no need to adopt them a year later: the document is sealed and kept in the Register of co-ownership.
Art. 1103. Judiciary annulment of a decision | Action forfeited | Futile or vexatious action
Article 1103 concerns challenges to decisions taken by the general meeting of co-owners. Since 1994, the purpose of the appeal has always been to request the annulment of a decision. Article 1103 is slightly modified to add the possibility of requesting “exceptionally the modification” of the decision. It will be interesting to see how far the courts will go to modify a decision of the meeting of co-owners without even reconsulting it. The time limit for challenging the decision has also been extended from 60 to 90 days following the meeting.
Art. 1103.1. Court Order
Article 1103.1 is new. It establishes a judicial remedy which is modelled on the judicial remedy provided by the new article 1086.3 (within the Board of Directors).
We are talking about the meeting of co-owners. Thus, when faced with situations where a decision cannot be taken or where certain co-owners systematically oppose it, it is now possible to turn to the court.
The court’s latitude appears to be wide, as it can issue any order it deems appropriate in the circumstances.
The cases in which a co-owner may initiate such a recourse are numerous. One thinks especially of decisions which require a legal majority but which do not really need to be rejected: adopting the description of the unit of reference of the private portions, adopting the correction of a material error in the Declaration of Co-ownership, authorising an amendment to the Declaration of Co-ownership concerning water leakage detectors when the insurer requires their installation, etc.
SECTION VIII
LOSS OF CONTROL OF THE SYNDICATE
BY THE DEVELOPER
Art. 1104. Special meeting | Call by co-owner
Article 1104 is slightly amended for terminological purposes. At the transitional meeting, it is intended to refer to an “appointment” of the Board rather than an “election”.
It should be noted that such fine language would have been understandable if the legislator had not also written in the new version of Article 1086 that a director in default of payment could again be “elected director” if he or she paid his or her dues…
The main point here is to indicate that the setting up of the Board of Directors can be done through an election or a designation (depending on the context of your vertical/horizontal/other condominium), all included in the term “nomination”.
Art. 1106.1. Duty of the developer
Article 1106.1 is largely amended to provide a more extensive list of what the developer must provide to the syndicate within 30 days of the transition meeting.
It is pleasing to read that the plans and specifications to be submitted must contain the substantial modifications made during construction. Such a requirement was not previously included anywhere, yet it is essential to receive the famous “as built” plans.
While most of the documents to be submitted are indeed from the developer (plans and specifications, location certificates, description of the reference unit), it is surprising, to say the least, that the maintenance log and the contingency fund study must also be submitted.
One may indeed question the impartiality of the developer in mandating an expert to draw up these documents, and even more so on the momentum of this mandate since, after all, the building and equipment must be fully in place and in operation.
Art. 1785. The preliminary contract | mandatory stipulation; Art. 1787. Information notice
Article 1787 brings a major change to the world of new condos. The information memorandum that must accompany the preliminary contract (promise to purchase) is now mandatory for all condominium projects, and not only for 10 units or more.
Since the information memorandum must contain a great deal of written information about the project, this is excellent news.
Furthermore, the “icing on the cake” is that article 1785 is completed to extend the right to withdraw from a promise to purchase.
Until now, the promisor-buyer of a condo could withdraw from his promise to purchase within 10 days of signing the preliminary contract. From now on, the promisor-buyer may also withdraw as long as he does not receive the information notice, or within 10 days of receiving it. This is a very welcome protection for buyers.
Art. 1791. Budget forecast | Content | Reimbursement by developer
Article 1791 is amended to add a few twists.
It refers to the provisional condominium budget which must be attached to the preliminary contract in projects sold as new.
It states that from now on, the contribution to the contingency fund in the budget must be that recommended by the contingency fund study or, failing that, 0.5% of the reconstruction value. The main purpose of such a measure is to encourage the developer to obtain the study as soon as possible, which is frankly not obvious when nothing is built…
However, the novelty does not stop there: the amendment also introduces a penalty for a developer that would have under-budgeted the expenses of the condominium to better attract buyers, one would imagine. If the expenses in the first year following the transition are more than 10% of those provided for in the initial budget, the penalty applies: the developer must reimburse the syndicate for the difference. This is a curious punishment that applies only once (the first year) and that will be excluded, logically, if the increase is the result of new legal obligations or other events completely beyond the control of the developer. In short, it is a meager compensation for the syndicate that will be the subject of many possible debates in practice…
Art. 1791.1. Protection of deposit | Other means | Return of deposit
1791.1 is new: it establishes the requirement that a deposit paid by a buyer to the developer be protected in its entirety. It also formally requires that the deposit must be returned if the fraction is not delivered on the scheduled delivery date agreed upon by the parties. Beware here of the clauses surrounding this precious date in preliminary contracts.
Art. 1793. Annulment of sale | Errors or deficiencies
Article 1793 is amended to add additional protections for buyers of new units.
Previously, a buyer could request the cancellation of a sale if it had not been preceded by a preliminary contract and if the buyer demonstrated serious prejudice. This was a fairly narrow avenue.
From now on, the absence of a preliminary contract as well as the absence of the information memorandum are covered, and even their gaps or errors! The buyer must still demonstrate that he has suffered serious prejudice, but the sanctions are more varied: the sale may be cancelled, damages may be paid, or the price paid may be reduced.
There is now a specific time limit to sue the developer for such claims: either 90 days of the sale, or 90 days following the transition meeting.