By purchasing a condo (apartment) in a residential tower, you automatically become an owner in a vertical co-ownership. You can also be in a divided co-ownership, if you purchase a house (semi-detached or townhouse), built on the same lot than other individual homes. It is then called a horizontal co-ownership.
If this is the case, you may not be the sole owner of the land surrounding your home. You will therefore share with others the ownership of the private streets leading to the homes and common areas, and the common equipment such as the swimming pool and collective parking.
A common legal regime
Horizontal co-ownerships are governed by the same rules of the Civil Code of Québec than vertical co-ownerships. They are both subject to the registration of a declaration of co-ownership, and governed by Divided Co-Ownership Law, which requires the appointment of one or more directors and holding meetings of co-owners.
Horizontal cadastral plan
To create a vertical co-ownership, a land surveyor must prepare a horizontal cadastral plan, which will allow the allocation of separate lot numbers to each private and common portion. The land so divided in lots includes:
Private portions: the houses;
Contrary to residential towers, the lots are not superimposed; they are side by side. Each private portion includes the entire immovable, the space situated above it, up to a point above the horizon called zenith (in astronomy), along with the ground underneath, to a point situated in the center of the Earth, designated nadir. Consequently, you are the only owner of your house.
Just like in vertical co-ownerships, syndicates of horizontal co-ownership must subscribe and maintain the insurance coverages required by Law. Yet, it is not a rare occurrence in horizontal co-ownership that the syndicate insures only the common portions. Many co-owners believe, wrongly – especially in co-ownerships comprising semi-detached homes – that they need to get insurance only for their dwelling and that in all logic, the insurance of the syndicate is not required for their private portion. In the case of a loss, the financial consequences can be dramatic for the co-owners and the directors as the latter could be held liable personally and even found guilty of gross negligence. This scenario can also have a negative impact on the resale of the said housing units.
Maintenance, repairs and replacement work
Contrary to vertical co-ownership, the envelope and the structure of the building in a horizontal co-ownership are not common portions. Therefore, there will be no need for a contingency fund to provide for the replacement of the roof or the windows, when they reach the end of their useful life. Furthermore, the work to keep the building up to standards will be carried out by the owner of each residential unit. Nevertheless, a contingency fund must be implemented to ensure the funding of the major repairs or the replacement work of common portions (such as: the replacement work of the sanitary sewer pipes).
Co-ownerships in phases
The concept of horizontal co-ownership is also used in co-ownerships in phases, by the method of concomitant declarations of co-ownership. In such cases, each residential tower (such as: phases I, II and III) will be governed by a vertical declaration of co-ownership. The equipment and land common to the various phases, including the land surrounding the towers, the roadways and the swimming pool, will be governed by an initial or horizontal declaration of co-ownership.
WHAT YOU SHOULD KNOW! Residential towers or small buildings in which at least two private portions are superimposed, are designated as vertical co-ownerships.
WHAT TO KEEP IN MIND: Horizontal and vertical co-ownership are governed by the same articles of the Civil Code of Québec. The administration and the management of a horizontal co-ownership are not different from a vertical co-ownership. In both cases, one must hold meetings of co-owners, appoint directors and prepare a provisional budget to pay the various expenses of the co-ownership.
WARNING! Many horizontal co-ownerships are dysfunctional, either on account of the ignorance of the rules of co-ownership, or by a lack of willingness on the part of the co-owners to manage their co-ownership.
CONSULT THE PUBLICATION: Purchase and sale of a condo: Everything you should know at pages 62 and following.