In co-ownership, the rights of withdrawal and of preemption may disrupt the course of a real estate transaction. In my practice, I had to intervene a number of times before proceeding with a sale, often to the astonishment (and sometimes displeasure!) of the parties, to safeguard their rights.
The statement of earnings is essential for performance assessment and informed decision-making. This statement is expressly required by the article 1087 of the Civil Code of Québec. It states that the income statement, in addition to the balance sheet, the budget and the statement of debts and claims, must accompany the notice of the annual meeting.
November 1st 2016 - A condominium syndicate has the obligation to report its operations using the fund basis of accounting. The article 1071 of the Civil Code of Quebec imposes indeed the creation of a contingency fund. Every condominium has to set up accounts distinguishing the general fund for common operations, sometimes called the administration funds, and the contingency funds.
October, 8, 2016 - Article 1039 of the Civil Code of Québec stipulates that the syndicate of coowners is responsible for the preservation of the immovable, its maintenance and the administration of the common portions. As a result, the initiative to undertake work in common portions comes from the syndicate, acting through its Board of Directors. This applies both to work intended to correct construction defects and work for the rehabilitation of the immovable, following a loss caused by a co-owner.
September 23, 2016 - You hire a "contractor" to replace your kitchen and to save money, it is understood that the work will be paid cash that is to say without paying the usual taxes.
The work is progressing swiftly and you pay your "contractor" under the table. Nearing completion and all agreed sums disbursed, you find out the cabinets do not close properly, are improperly installed and to add insult to injury, some components are of different colors. In short, it's a disaster!
September 21, 2016 – on August 19, 2016, an interesting decision has been rendered by the Court of Québec (Honorable Pierre A. Gagnon, j.c.q.). It retains the liability of a contractor holding of a license from the Régie du bâtiment du Québec(Quebec Building Board) and operating since 1998, and condemned him to pay damages including damages to compensate the moral prejudice suffered by his clients, based on Charter of human rights and freedoms. Here are the facts.
In my practice, many clients consult me to convert an immovable comprising several apartments into divided co-ownership. Unfortunately this does not always prove possible, more particularly because of the very high costs such a process implies (such as subdivision taxes known «Parkland taxes» applicable in certain boroughs of Montreal or other municipalities) and vested rights in favor of tenants.
CASH BASIS OF ACCOUNTING
A cash basis of accounting consist of recording the transactions of the syndicate when the receipt or disbursement related to the transaction occurs. It is a faithful reproduction of the bank statement, broken down into various asset, liabilities, income or expenses accounts. Moreover, instead of talking about income and expenses, one should speak of receipts and disbursements. This basis of accounting has many limitations.
May 19, 2015 - I am sometimes asked for how long documents filed in the co-ownership register should be kept by the syndicate. This is a fair question, since the legislator has given no explicit directions on this subject in the Civil Code.
It could be that its silence means, "You must keep everything, permanently !” As far as I am concerned, I rather lean in that direction.
Your condo does not necessarily need a Chartered Professional Accountant to present its financial information, whether it is the financial statements, financial forecasts or funding requests. Competent administrators or contractors supervised by the directors could do the job and present the required financial information.
The need however could however be felt if the owners have doubts about the work done, the skills or the honesty of the current administration. Internal reporting to co-owners may also be absent or deficient. It is also possible that the general by-laws require the production of certified financial statements.