Definition : Undivided co-ownership (by indivision) - Indivision agreement

Agreement, to determine the modus operandi and the management of an undivided co-ownership. It purpose is without limitation to:

Identify the immovable;
Determine each undivided co-owner’s shares;
Establish the undivided co-owners exclusive rights of use of the immovable;
Develop allocation rules of the immovable’s expenses;
Establish the immovable’s administrative rules and the restrictions on sales;
Govern the undivided co-owners’ rights and obligations in respect to the enjoyment of the premises;
Determine the improvements’ ownership;
Fix the term of the agreement;
Provide the rules governing partition at the termination of indivision.

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.

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.

Divided co-ownership (‘‘condo’’) and undivided co-ownership

If you are shopping for an apartment, ask yourself if it is located in a divided or undivided co-ownership. Although these two concepts are similar, as they ultimately aim to share the same building by several people called co-owners, the legal and financial implications are not the same. These two types of co-ownership thus have very different terms of ownership, ownership and liability between the co-owners of a building. A look at the main distinctions between divided co-ownership and undivided co-ownership.

Undivided co-ownership: an alternative to condos?

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.

Rights of withdrawal and first refusal

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.

Undivided co-ownership: an improving alternative

June 7th, 2010 – As a Notary, I receive on a regular basis mandates dealing with divided or undivided co-ownership.

Definition : Undivided co-ownership (by indivision) - Indivision agreement

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