More often than not, a notary drafts the indivision agreement. Its contents can be adapted in accordance with the needs of the undivided co-owners and the characteristics of the immovable. It is a contract that can be amended only with all of the co-owners’ consent.
When shopping for an apartment, you must find out if it is in a divided or undivided co-ownership. Even though both concepts are similar in that their ultimate goal is the partition of an immovable between several persons called co-owners, the financial and legal commitments are different.
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The conversion of a immovable to divided co-ownership (condos) is subject to strict formalities and municipal by-laws, which can restrict the conversion or make it subject to certain conditions.. 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.
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In undivided co-ownership, the rights of withdrawal and of first refusal may disrupt the course of a real estate transaction. It is important to know that other co-owners may take precedence over a potential purchaser. The title of the latter could be precarious for some time: a buyer who acquires rights in an undivided co-ownership without first receiving the approval of all the undivided co-owners is therefore liable to have his share redeemed and thus be excluded from the indivision.
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June 7th, 2010 – As a Notary, I receive on a regular basis mandates dealing with divided or undivided co-ownership.
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WHAT YOU SHOULD KNOW ! The indivision agreement is optional and does not create indivision. Although the law does not make it compulsory, it must be published in the land register so that it may be set up against third parties.
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