The creation of a divided co-ownership

 

From the first day of existence of the co-ownership, that is to say when its declaration of co-ownership is published in the Land Register of Quebec, the co-owners as one body constitute a “syndicate of co-owners”. This legal person must ensure the "preservation of the immovable and manage the common portions." To form this co-ownership several steps involving many protagonists are necessary.

Preparation of a cadastral plan

The land surveyor intervenes from the outset of the establishment of the co-ownership. His mandate is to establish the cadastral plan, so that the declaration of co-ownership can be published. To this end, he must:

  • Depict faithfully the immovable, whose sales may have been made on plan;
  • Divide the immovable by identifying each lot number, so that it is ultimately divided into private and common portions;
  • Display the measurements, superficial area, shape and positioning of all common and private portions of the co-ownership, in relation with one another.

In a residential tower, the surveyor will conduct true measurements of common and private portions, once the construction of the foundation and main walls of the building of the immovable are sufficiently advanced. When the surveyor has completed his work, an application is filed with the relevant municipality, in order that a cadastral operation (subdivision) be authorized.

The plans prepared by the land-surveyor are then deposited at the Ministère des ressources naturelles et de la faune (Ministry of Natural Resources and Wildlife), management of cadastral registrations. This department manages the Cadastre of Québec. Following the cadastral operation that allows the creation of the various common and private portions, an initial certificate of location is prepared.

Drafting the declaration of co-ownership

From the design stage of the project, the developer must ask that the declaration of co-ownership be drafted. This exercise should be entrusted to a notary with an adequate legal knowledge in the field of co-ownership. Thus, he will be able to customize the content of the document to the specificities of the immovable, while respecting the mandatory rules of the law and the constraints of municipal regulations. He will ask the developer and his hypothecary creditor, if applicable, to sign this declaration of co-ownership.

Registration of the declaration of co-ownership

Once the immovable is the object of a cadastral plan, instrumental to the immatriculation of common and private portions, and the co-ownership declaration received by the notary, the latter publishes the declaration of co-ownership in the land register.

Immatriculation of the syndicate

Within 60 days of publication of the declaration of co-ownership in the land register, the syndicate must be immatriculated at the Régistraire des entreprises du Québec (Registrar of entreprises of Quebec).

Startup of the co-ownership and collection of common expenses

The official date of creation of a co-ownership gives rise to the first financial year of the co-ownership. The budget forecast must be established before the publication of the declaration of co-ownership. All prior expenses remain the responsibility of the original owner(s), which is (are) usually the developer(s).

As for subsequent expenses, they should be allocated amongst the lot owners, which requires adjustments of the common expenses between the developer and the buyer in accordance with the dates of the sales. This is why the provisional administrator must collect the contributions to the common expenses of all owners, including those of the developer, who must pay the contributions of unsold fractions.

Startup of the syndicate

The startup of a syndicate is sometimes difficult. As co-owners do not know each other, they might first seek to take possession of their dwelling and neglect the proper management of their co-ownership. This is why it is important to ensure proper startup, which involves due diligence and care.

The problems encountered in the process can be complex, numerous and diverse in nature. From the outset, the provisional administrator appointed by the developer may be partial, in that he may seek to prioritize the interests of the developer. Thus, the provisional administrator may transfer to the co-ownership charges accruing in principle to the developer (ex.: housekeeping costs resulting from the completion of common or private portions).

Moreover, this provisional administrator may have committed the co-ownership in various contracts detrimental to the co-ownership. . However, the Civil Code of Québec provides that within 60 days of the election of the new Board of Directors, the syndicate may, without penalty, terminate any contract with a term of more than one year. The said contracts may concern the maintenance of the immovable or other types of services. This being stated, you are invited to consult the factsheet entitled End of the provisional administration.

 

 WHAT YOU SHOULD KNOW ! Generally, the construction of a co-ownership will start when the sales are sufficient, that is to say, when the developer has signed enough preliminary contracts with buyers-promisors.

 WHAT TO KEEP IN MIND ! A co-ownership, particularly its syndicate of co-owners, only exists once the declaration of co-ownership is published. The said syndicate shall assume the duty of preserving the immovable and of managing the common portions.

WARNING ! The date of birth of a co-ownership is the starting point of its first financial year. Any and all expenses related to the immovable prior to its creation must remain the responsibility of the developer who published the declaration of co-ownership.

 

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