Divided co-ownership is a specific form of ownership. To avoid unpleasant surprises during the purchase or sale process, a notary can guide you through each step.
The process of buying a property held in divided co-ownership is very complex. Consult a notary before signing anything.
Property is said to be held in divided co-ownership when it is split into two or more fractions. Each fraction may belong to one or more people. The best known example of divided co-ownership is a condominium building.
Private portion Each owner of a fraction has exclusive ownership of a private portion of the property (the condominium).
Common portion Each owner holds a share in the common areas of the property belonging to all the co-owners. This share is proportional to the relative value of the private fraction. This value is indicated in the declaration of co-ownership that the seller gives to the buyer and that is filed with the land registry.
Common portions for restricted use The common portions for restricted use belong to all the co-owners. However, only one of them, or only a few of them, is authorized to use them, in accordance with the declaration of co-ownership.
The co-owner does not have the right to convert a common portion for restricted use, which is subject to the rules relating to common portions. Only co-owners with access to these common portions for restricted use must contribute financially to their maintenance and ongoing repairs. However, all co-owners will have to contribute financially to carrying out major repairs and replacing portions, unless the declaration of co-ownership provides for a different distribution. For example, the declaration of co-ownership could state that only co-owners who benefit from these portions contribute to their major repair and replacement costs, as is now allowed under the new provisions of the law. Each person’s contribution is proportional to the relative value of their property or according to the distribution provided for in the declaration of co-ownership (e.g. in equal shares among the beneficiaries of these spaces).
For example, if you buy the second-floor unit of a three-storey condominium building, you become the sole owner of that unit (your private portion or condo). At the same time, you also become co-owner, with your neighbours on the first and third floors, of a share of the common portions of the property. This means that you hold an undivided portion of the land, the outside walls and the roof. Other portions, although common, are for restricted use, such as a balcony, parking space or basement locker. These portions are private insofar as you are the only person who can use them.
The following diagram illustrates what belongs only to you (in grey) and what belongs to the three co-owners (in white).
For more information on the fraction of a divided co-ownership, visit Lacopropriété.info
Declaration of co-ownership Any divided co-ownership is governed by a document called a declaration of co-ownership. It contains the essential rules for living in co-ownership and helps prevent many conflicts. This declaration must be notarized and filed with the land registry.
Selling and mortgaging a property held in divided co-ownership Each co-owner is free to sell or mortgage their fraction. However, the declaration of co-ownership may contain restrictions in this regard. Each mortgage is separate. None of the co-owners are affected by the mortgage situation of their neighbours.
Purchasing a divided co-ownership unit requires several additional verifications that notaries can do for you.
The private and common portions of a divided co-ownership are governed by a notarized declaration of co-ownership. The buyer must always read and understand it before making a commitment. A notary will help you understand the contents of this very important document. When signing the offer to purchase, the buyer must also:
- Obtain a copy of the declaration of co-ownership and its amendments; ;
- Read the condominium’s rules and have the contents of the declaration of co-ownership validated by legal counsel ;
- Obtain a copy of the location certificate
- Obtain proof of insurance from the syndicate of co-owners
- Check the insurance premium for individual insurance*
- Bring in an inspector
- Check whether the syndicate of co-owners has a contingency fund study
- Consult the minutes of previous meetings
- Check if the syndicate of co-owners has a maintenance log
- Read the financial statements
- Find out about condominium fees** and special assessments
- Check whether the seller has paid the condominium fees and contributed to the contingency fund
- Check if the syndicate of co-owners has a self-insurance fund*
- Check whether there are any legal proceedings in progress or about to be initiated that may affect the private area
- Check if there are any major renovation projects in progress or planned for the building
- Check the way the building is managed
* For more information on individual insurance, visit Lacopropriété.info. **For more information on condominium fees, visit Lacopropriété.info. ***For more information on self-insurance funds, visit Lacopropriété.info.
For new constructions, the buyer should ascertain the contents of the warranty and the conditions of its implementation, including the mechanism for handling complaints and resolving disputes.
Include a reasonable period of time, from 7 to 10 days, in your purchase offer for obtaining the necessary documents and carrying out verifications relating to the building.
For more information on what to verify when purchasing a condominium unit, visit Lacopropriété.info.
For more information on the preliminary contract, visit Lacopropriété.info: http://www.lacopropriete.info/acheteur/section/9-le-contrat-preliminaire.html; http://www.lacopropriete.info/acheteur/section/35-achat-dun-condo-dun-constructeur-ou-promoteur.html.
For a list of key questions to ask the syndicate before buying, consult Lacopropriété.info.
The notarized declaration of co-ownership includes the constituting act of co-ownership, the building by-laws and a description of the fractions.
Dividing the right of ownership of an immovable into fractions is achieved with a notarized declaration of co-ownership. It includes the constituting act of co-ownership, the building by-laws and a description of the fractions.
The constituting act of co-ownership specifies the relative value of each fraction and explains how the value was determined. It also establishes the contribution of each fraction to the common expenses of the property and the mandatory contingency fund. This fund is a reserve of money for major repairs and replacement of common portions. It also allocates the number of votes attached to each fraction. The constituting act defines the purpose of the property, i.e. the use (residential, commercial or industrial) the owners may make of it, as well as the designated purpose of the private and common portions. It also sets out the powers and duties of the board of directors of the syndicate of co-owners and of the general meeting of co-owners.
For more information on the rights and obligations of the board of directors and the directors, visit Lacopropriété.info: http://www.lacopropriete.info/conseil-administration.html; http://www.lacopropriete.info/administrateur.html
The building by-laws stipulate rules on the use, enjoyment and upkeep of private and common portions and common for restricted use portions. For example, they may prohibit the presence of certain animals in apartments, Airbnb-type short-term rentals, the use of cannabis, etc. These same by-laws contain rules concerning the operation and administration of the co-ownership, including the composition of the board of directors and the conditions relating to being a director.
For more information on building by-laws, visit Lacopropriété.info.
Description of the fractions
The description of the fractions contains the cadastral description of the private portions and the common portions of the property. It also contains a description of the real rights charging the property and those in its favour.
The syndicate of co-owners’ mission is to ensure the property is preserved, maintained and administered.
Syndicate of co-owners
The syndicate of co-owners is created as soon as the declaration of co-ownership is filed with the land registry. Its mission is to ensure the property is preserved, maintained and administered. The board of directors acts on behalf of the syndicate. In particular, the directors adopt the budget for the condominium property.
For more information concerning the rights and obligations of the syndicate of co-owners, visit Lacopropriété.info
L’assemblée de copropriétaires
The general meeting of co-owners considers matters of interest to all co-owners. Each co-owner may exercise their right to vote according to their number of votes.
For more information on the general meetings of co-owners, visit Lacopropriété.info.
Given the complex nature of this procedure, you are urged to consult a notary.
It is possible to convert a rental building into divided co-ownership (condominium) but the owner of the building must respect certain rules. One of the first steps for the owner is to obtain a document from the municipality where the property is located to determine whether the conversion can take place. The conversion of an immovable to divided co-ownership must also be authorized by the Tribunal administratif du logement (formerly the Régie du logement) if it has or had at least one dwelling in the 10 years preceding the authorization request.
Communauté métropolitaine de Montréal
Under current legislation, conversion to divided co-ownership is prohibited within the Communauté métropolitaine de Montréal (Montreal Metropolitan Community), unless the municipality where the property is located has passed a by-law permitting it. In this case, the owner should check with the municipality to enquire about filing a variance request and the applicable fees.
Other Quebec communities
Conversion is permitted in other Quebec communities, unless a municipal by-law prohibits it. The owner must obtain a resolution authorizing the conversion or a certificate attesting that no by-law restricts conversion within the municipality.
Dwellings occupied by undivided co-owners
In the event that all the units in a property targeted for conversion are occupied by undivided co-owners, the property may be converted to divided co-ownership, provided authorization is obtained from the Tribunal administratif du logement if the property has had at least one dwelling in the 10 years preceding the authorization request.
Notice of intent and application for authorization
Before proceeding, the owner must give each tenant written notice that complies with the law, informing them of the intention to convert the building. The owner must also submit to the Tribunal administratif du logement a copy of each notice and a request for authorization to convert within the stated deadlines.
The law establishes the rights and obligations of the owner who has converted the property, as well as those of the tenants.
For more information on converting a rental property to divided co-ownership, visit the Government of Québec website at Tribunal administratif du logement (formerly the Régie du logement).