Le mardi 08 janvier 2008

DIVIDED CO-OWNERSHIP: THE (VERY) BASIC LEGAL CONCEPTS

By Serge Abud,

lawyer at the PAPINEAU AVOCATS inc. lawfirm.

If you already own a condominium or if you are interested in acquiring one, you should be prepared to let some new words or expressions enter your vocabulary. Here are a few of them:

«Divided co-ownership» is the official legal term that is used to designate condominiums as a type of property. It is called «divided» because a single item, in this case an immoveable or a building, is precisely divided between the rightful owners of its fractions. Each one of them owns his own physical division, which, for our purposes, is an apartment inside the said building. By opposition, undivided ownership of a building would happen when a certain group of persons would only own an abstract share of it that does not correspond to any physical portion of the immoveable. Divided co-ownership involves some necessary undivided co-ownership in order to work properly. Indeed, according to Section 1046 of the Quebec Civil Code, each co-owner has an undivided right of ownership in the common portions.

Those common portions are those indispensable and commonly owned parts of the building which allow each individual owner to use the building without trespassing each others’ property. They include the grounds, the hallways, stairways, parking areas, etc.

A description of the private and common portions and of the building can be found in the declaration of co-ownership, an absolutely fundamental document that is some sort of social contract binding all the divided co-owners together with all the inevitable compromise implied. This declaration is also much more. First of all, the divided co-ownership of a building can only be established through the publication of a declaration at the Land Registry. It must therefore include the act by which the co-ownership is constituted. The law states that the declaration must be in the form of a notarial act. The description and the relative value of each private fraction must also be included in this complex document.

The importance of reading the whole text of the declaration from beginning to end cannot be overstated: when you buy a condominium, you agree to abide to everything (legal) that’s in there. Also, and very importantly, most of the by-laws of the building are included in the declaration. Other by-laws can also be added as time passes. These are all the rules according to which the co-owners agree to conduct themselves in this micro-society they are forming. The by-laws also include the rules by which the building is to be operated and administrated.

The declaration of co-ownership must also include a definition of the destination of the immoveable. The destination of the immoveable is the definition of what is most essential about the building for the co-owners. The most obvious and common examples of this is the definition of the immoveable as «residential», «commercial» or «industrial».

It is a frame that protects individual co-owners against the abusive decisions that could be taken by the majority and the community of the co-owners against possible abuses by individual co-owners. For example, you could be forbidden from practicing psychotherapy in your apartment since your immoveable has a residential (as opposed to commercial) destination. It has been decided by the Superior Court that the residential destination of an immoveable was not sufficient in itself to justify the forbiddance of domestic animals. Co-owners wishing to emphasise absolute tranquility as an essential part of their building could modify its destination accordingly then forbid on this basis domestic animals that could be noisy. As another example of this, some co-owners could propose to change the destination of the immoveable in order to make the ground level commercial. As stated by Section 1098 of the Civil Code, in all cases where the destination of the immoveable is changed, a much stronger majority than the one currently needed to reach usual decisions must be obtained.

Living in a condominium involves a fair share of deliberative democracy. Here, the social body is a moral person named «the Syndicate». As with most moral persons, the decision process in the Syndicate is divided between the co-owners and an elected executive organ (the board of directors). Some of the rules applying to them can be found among sections 1039 to 1109 of the Quebec Civil Code, sections that deal specifically with divided co-ownership.

The future owner of a condominium, should also be prepared to pay his monthly share of the common expenses arising from the coownership, based on the relative value of his or her fraction. A contribution to the contingency fund is also mandatory. This fund must be established by the Syndicate in order to cover the costs of major repairs to the common portions of the building or their replacement. If a co-owner fails to pay his share of the common expenses and/or of the contingency fund for a period of three months or more, he can lose his voting rights at the assembly. After a default of only thirty days, a legal hypothec can be registered by the Syndicate on a co-owners’ fraction.