Definition : Syndicate of co-owners

Whether you are a real estate developer (for a new building) or several owners of an existing building who wish to convert it, the rules for subjecting a building to divided co-ownership are the same. The creation of a divided co-ownership is necessary when an immovable must be divided into lots composed of a private portion and a share  of the common portions, and which belong to one or more different persons. The community of co-owners acquires the status of legal person from the day a declaration of co-ownership is published at the Land registry office (Land Register). The legal person thus constituted takes the name of “syndicate of co-owners”. Its mission is to ensure the " preservation of the immovable, the maintenance and administration of the common portions, the protection of the rights appurtenant to the immovable or the co-ownership, as well as all business in the common interest ". To form this co-ownership several steps involving many protagonists are necessary.

The syndicate of co-owners, as a legal person, has  juridical personality, which allows it to contract with third parties, hire employees, hold and dispose of property or exercise legal remedies to protect its assets and ensure the defense of the collective interests of the co-owners.He plays a crucial role in a co-ownership, as it is its legal representative. A legal person constituted of all the co-owners (the collectivity of the co-owner) and governed by the Civil Code of Quebec.  As such, it has rights, obligations but also responsibilities.  He has for object the preservation of the immovable, the maintenance and the administration of the common portions and the protection of the collective interests of the co-owners. An overview of its role and its various powers.

The powers of the syndicate are designed according to the collective interest of the co-owners and find their limits in respect of the individual rights of the co-owners guaranteed by the declaration of co-ownership and by the Charter of Human Rights and Freedoms (e.g.: the inviolability of the home). These powers of the syndicate are based on four principles: the preservation of the immovable, the administration of the common portions, the protection of the collective rights and the amendments to the declaration of co-ownership. For this, he must ensure the maintenance in good condition of use and enjoyment of all the common portions. The syndicate may also take legal action against a co-owner. The Civil Code of Quebec gives the syndicate of co-owners extensive powers to administer the co-ownership.

The tax status of a syndicate of co-ownership As with any legal person, a syndicate of co-owners has tax obligations to respect under penalty of consequences that could have a significant impact on the financial situation of the co-ownership and the co-owners. Although governed by specific rules set out in article 1039 of the Civil Code of Quebec, a co-ownership syndicate is considered by the tax authorities of Quebec and Canada respectively as: An enterprise under the Taxation Act; A corporation with the status of a non-profit organization under the Income Tax Act  

In the same way as any other natural or legal person, a syndicate of co-owners is likely to incur civil liability towards third parties, including co-owners. Responsibility is the counterpart of power: where authority is, there is responsibility. This responsibility can be translated into the financial contribution of the co-owners, since in the event of a judgment condemning the syndicate to pay a sum of money, this judgement will be enforceable against him and each of the persons who were co-owners at the time the cause of action arose, in proportion to the relative value of their fraction.Therefore the law obliges any syndicate of co-owners to take out insurance covering its civil liability towards third parties.

The Civil Code of Québec confers juridical personality on the community of co-owners. Article 1039 of the Civil Code of Quebec provides that as soon as the declaration of co-ownership is published, the community of co-owners constitutes a legal person called a syndicate of co-owners. Those duties and obligations are mainly aimed to ensure the preservation of the immovable, the administration of the common portions and the protection of the rights affecting the immovable or co-ownership, as well as all operations in the common interest. However, it is essential to understand them well because failure to comply with these duties and obligations towards a co-owner or a third party could lead to the civil liability of a syndicate.

The syndicate acts as a legal person bringing together all the co-owners of the building and not each of them individually. The Civil Code of Quebec (C.c.Q.) provides that the syndicate of co-owners arises, by operation of law, at the time of publication of the declaration of co-ownership in the Land register. With the powers devolved to it by law and exercised by its two decision-making bodies, it thus expresses the autonomy of the community of co-owners. As a result, the co-owners are third parties to the syndicate. The assets of the syndicate are thus distinct from those of each co-owner. Despite the collective nature of this type of co-ownership, the legislator has not attributed to the syndicate the ownership of the common portions, which is distributed among the co-owners according to the relative value of their fraction.