December 20th, 2022 – In the case of a real estate transaction in a divided co-ownership, the certificate of location of the private portion is not always sufficient. A certified copy of the certificate of location of the entire building could also be requested. It is this certificate of location that will inform the buyer of the compliance of the overall property with respect to laws and regulations, encroachments, easements, as well as possible restrictions regarding the addition of a pool, sheds, for example.
In divided co-ownership (“condo”), the land surveyor will prepare one or several of the following documents:
a certificate of location, designatedas “global”, dealing with the entire immovable (including all the private and common portions);
a certificate addressing only the private portion, which means the representation of one specific apartment and the corresponding parking area and locker , as the case may be;
During a sale of a unit in co-ownership, the standard practice is to supply only a certificate on the private portion. This practice is based on cost based risk management and is legally unsound.
Firstly, I consider that it is unjustified not to request a certificate of location for the common portions (main components of the building, land, outside lockers, etc.) in a small co-ownership (six to eight units or less). The cost of obtaining such a certificate is reasonable, and the delays for its preparation are approximately the same as for a similar building in full ownership. It is also advantageous to give this mandate to the land surveyor at the same time as the mandate to prepare a certificate of location for a private portion, therefore avoiding the file opening fee, traveling expenses and additional delays.
For co-ownerships of medium and large size (more than six to eight units), it is not reasonable to impose upon a vendor or a purchaser the cost of preparation of a global certificate, and the lengthy delays of preparation it entails.
What is a purchaser to do? Should one be satisfied with legally perfectible documents and leave to chance the possibility or not of the occurrence of legal problems with serious monetary consequences?
One also has to take into account that if irregularities are revealed by the said certificate of location, it may delay and/or impede the closing of the transaction.
The creation of a co-ownership is the occasion, in most instances, of the preparation of a global initial certificate. Failing obtaining an up-to-date certificate, consulting the initial certificate will, nevertheless, supply relevant information and, accordingly improve the buyer’s situation. As a first step, the buyer should verify if a copy of this document has been supplied by his notary at the occasion of the transaction. As a next step, he should try to obtain said certificate from the members of the Board of Directors, from a former owner, the notary who has received the declaration of co-ownership, the land surveyor who has filed the cadastral plans in the Land Register or from the initial hypothecary creditor who has participated in the development of the project.
This being said, I suggest that the legally acceptable and cost effective compromise is to proceed as follows:
To fulfill its administrative duties towards the common portions and the safeguard of the rights related to the co-ownership, the syndicate of co-ownership should require, every five years or upon any other regular interval not exceeding ten years, or at the occasion of any significant alteration to the immovable or change in its use, the preparation of a new certificate on all the common portions or, at least, on the common portions situated outside the building. This certificate should be kept in the register of the co-ownership for the benefit of all the co-owners, and the cost of its preparation should be a common expenses.
The vendor should supply, at its cost, to his purchaser a certificate on the private portion or private portions sold showing his apartment, the parking space and the locker attached thereto, as the case may be. A copy of this certificate should, on a compulsory basis, be remitted to a member of the Board of Directors, to be filed in the register of the co-ownership. This practice would allow the Directors to be informed of any modifications carried out in the private portion, if any, and of their consequences on the common portions (encroachments, non-conformity to the applicable regulations, etc.).
These obligations should be imposed by the declaration of co-ownership to ensure that the syndicate and the co-owners are compelled to abide to them. For existing co-ownerships, a vote of the co-owners to amend the declaration of co-ownership accordingly could be held at the next meeting of the co-owners.
The professionals in this field – notaries, lawyers, land surveyors, real-estate brokers – are well aware of the necessity of these changes. Thus, the Order of Land Surveyors and the Chamber of Notaries of Quebec have created committees to recommend the standards to be adopted on the subject of certificates of location in co-ownership.
In the meantime, and until the recommendations of these committees and of the professionals in the field are published and enacted in specific provisions of the Law , co-owners have the option of amending their declaration of co-ownership at once in line with the recommendations herein for their own best interest.
Me Émery Brunet
700, avenue Sainte-Croix
Montréal (Québec) H4L 3Y3
Chronic express the personal opinions of the author and in no way engage the responsibility of the site editor , CondoLegal.com Inc. The content and opinions expressed in a column are those of the author.