While the residential real-estate market in the Province shows a healthy level of activity, the divided co-ownership is contributing substantially to it.
The Greater Montreal Real Estate Board - La Chambre immobilière du Grand Montréal (CIGM), indicates that data from the MLS system, shows that the number of transactions concluded in the metropolitan area in July 2011 increased by 6% compared to last year. According to the Board, the dynamism of the co-ownership sectors accounts for much of this growth thanks to a rise of 19% last month. Its analysis of the reasons for this rise indicates that sales of condominiums account for 77% of all real estate transactions, and that the median price for a condominium unit is now $232,000 for co-ownerships, which represents a rise of 5% in one year.
We are delighted by this growth in the popularity of co-ownership in the Province and the fact that many many first time home buyers are choosing this type of dwelling. This type is attractive to people and the families who wish to become homeowners without having to personally take care of the property maintenance and the expenditures that come with owning a single-family home, and the various expenses that an owner must take care of, such as the cost of property insurance.
On the other hand, it's important for those who plan to purchase a condominium to have a good understanding of what ownership of this type of dwelling entails. The co-owner must understand that they are indeed the owner of their private, but in a collective environment with other owners who have the same rights. We often say that a co-owner enjoys has the free enjoyment of his property and benefits from a right of ownership in a collective context. This context is governed by the declaration of co-ownership specific to the building, as well as by the Civil Code of Quebec, both of which create rights and legal obligations for the co-owners individually, and for the syndicate of the co-owners which is a legal entity created by the declaration of co-ownership published in the Land Registry.
It is essential for the co-owner to pay close attention to the declaration of co-ownership because it is the starting point for the co-owner to understand the rights and particular rules applicable to the building of which he owns a divided share which are both individual and collective.
For example, the declaration can contain provisions governing the right of a co-owner to modify his private portion. Such provisions can oblige the co-owner to provide the syndicate with a copy of the plans and specifications for work they wish to do before work begins. The Board may have the right and the obligation to study the plans, and they are usually obliged to approve them if there is no danger that the works would damage the other private portions, or when no modification of the common portions is required. The declaration may specify that the co-owner who proposes to carry out work to change the floor coverings (carpet, hardwood floor, engineered flooring or tile) must use a certain type of material in order not to diminish the existing level of sound-proofing of the building.
The declaration of co-ownership will also specify that the co-owner holds a right of «undivided ownership» in the common portions with the other co-owners. This right is known as “undivided” because no co-owner can claim a right of ownership on an identifiable part of the common portions. This right takes the form of a percentage share whose value is specified in the declaration of co-ownership.
One or more individual co-owners can have a right of use of a part of the building located in the common areas, for example the balcony which adjoins their private portion. The declaration will specify the object of the right of use and will spell out the rules governing the exercise of this right, and especially the fact that the granting of this right of use doesn't extend to the right to modify this element of the building. These areas are fundamentally common areas of the building whose modification by the co-owners personally is prohibited.
It is important for the co-owners to understand their financial obligations towards the syndicate and consequently towards the collectivity of the co-owners. The provisions of the declaration of co-ownership will re-iterate those of the Civil code of Quebec that specify that each co-owner must contribute to the common expenses of co-ownership in proportion to to his percentage share of the costs, which also corresponds to the relative value of his fraction. This value is expressed in terms of a percentage.
Sometimes a co-owner neglects or refuses to pay his contribution to the expenses, citing that he isn't getting the required “services” from the Board of Directors, or from the building manager, should such be the case. In doing so, the co-owner is already heading down the wrong path: the syndicate is not a supplier of goods or services, but rather a legal entity whose purpose and duty is the preservation of the building, the maintenance and the administration of the common portions, the safeguarding of the rights related to the building or co-ownership, as well as all operations of common interest. The syndicate doesn't collect «revenue» in the usual sense, but only has expenses to which all the co-owners must contribute to pay because of their title of ownership.
Take the time to read and understand your building's declaration of co-ownership because it is the cornerstone of the administrative and legal structure in which you live. Certain concepts and nuances of its contents are more difficult to understand than others, but we're here to assist and advise you.