Following the public consultations held in March, April and May 2012, at which we filed a written submission and have made representations on 7 November 2012, the Advisory Committee on co-ownership has filed its report with the Minister of Justice, Mr. Bertrand St-Arnaud, and the Board of Directors of the Chamber of Notaries of Quebec.
In addition to presenting an overview of the information gathered during these public consultations this report contains recommendations for legislative changes aiming at divided co-ownership in Quebec, which will be considered by the Minister of Justice and which will possibly give rise to legislative changes affecting co-ownership.
In the previous issue we discussed the recommendations to make the task easier for the buyer of a fraction of co-ownership to obtain the information necessary for an informed purchase.
In this issue, we will discuss recommendations aimed at simplifying the representation of co-owners who can not attend the meetings in person, and thus allow that a quorum would be reached easier.
According to the report of the Advisory Committee on co-ownership, it was found during the public hearings that it is sometimes difficult for the syndicates of co-ownership to reach the quorum necessary for holding an assembly of the co-owners, which requires the presence in person or represented by power-of-attorney of a sufficient number of co-owners representing the majority of the votes (over 50%).
According to section 1090 of the C.c.Q. now in force, each co-owner has, at the assembly, a number of votes at his disposal proportional to the relative value of his fraction, and the undivided ones of a fraction exercise their rights in proportion to their undivided share. The term “undivided ones of a fraction” refers to situations where the fraction that includes the dwelling unit (condo) belongs to more than one person, for example a couple no matter what the nature of their union might be, or simply two or more people who buy the whole condo. Therefore, each undivided one has the right to exercise his/her right to vote (e.g. Mr. X and Mrs. Y have an equal share of ownership in a condo to which 2500 votes are assigned by the declaration of co-ownership. Mrs. Y will be entitled to 1250 votes and Mr. X to the other 1250, and this independently one from the other.).
However, for all the votes attached to their fraction to be counted for purposes of reaching a quorum and a vote, it is imperative that they are both present. If one of the persons cannot attend the assembly, he/she must give a written power-of-attorney to the other person to represent him and to exercise these rights to vote in his absence, otherwise these votes will not count, neither as a quorum nor for the vote.
Many co-owners are not aware that one needs a written power-of-attorney so that a member of a couple can validly represent the other member absent at the assembly of the co-owners. It often happens that only one member of a couple presents himself at the assembly and the Board of Directors and is then being told by the leaders of the assembly that the portion of the votes of the absent member cannot be counted at the level of the quorum and of any voting at all on the agenda.
Faced with this situation, the Advisory Committee on co-ownership recommends that section 1090 of the C.c.Q be amended in order to add a rebuttable presumption to the effect that the undivided absent one from a meeting (e.g. one member of a couple of co-owners) gave a mandate to the other one (or to the other undivided ones in the case of more than two owners) to represent him.
So, if this change is implemented by the National Assembly, when one of the undivided co-owners in respect of a fraction is absent from the assembly, he will be deemed to have instructed the others to represent him and to exercise his voting rights, and this without the requirement of a written power-of-attorney to that effect. The proposed amendment retains the right of the undivided absent one to give a written power-of-attorney to a third party for this purpose. So, when one of the undivided co-owners is present at the assembly he shall be deemed to have been given the mandate to represent all the other undivided co-owners of the fraction and all votes attached to this fraction will count for the quorum and at a vote.
We would like to emphasize that all the recommendations of this committee should be studied in detail by the Minister of Justice of Quebec, and if they are used they should follow the usual path of any change in law before receiving final approval of the National Assembly for their entry into force.
We will come back to you in a future article about other recommendations that we consider important for the co-ownership.
In the meantime, we invite you to contact our team of lawyers specializing in real-estate law for any questions on this topic.