A phased co-ownership allows the developer to spread the design of a real estate project over several years, and to modulate the pace of construction work according to the evolution of unit sales. This formula implies that the developer, rather than establishing once and for all the co-ownership he wants to create, proceeds in stages.
The co-ownership he creates as part of this real estate project evolves, during construction, before reaching its final form. Because of the complex legal structure, only lawyers and notaries who are fully knowledgeable in the applicable rules of the field should act.
A phased co-ownership is also beneficial to consumers. From the time the first buildings are developed, buyers usually know what to expect about the direction of the project, its location and the nature of the buildings to come. This protection is important because if, for example, a developer were to suffer a setback, his successors would be required to honour the original plans and respect what was represented to first-time buyers.
Two methods are particularly used to carry out a phased co-ownership project: the so-called "Landry method" and the method of concurrent co-ownership declarations. Let's look at them summarily.
A) The method of successive changes to the declaration of co-ownership (Landry Method)
This method consists of announcing, in a single declaration of co-ownership, that future changes will be made to ensure the construction of the future phases of real estate development. It aims to establish a single co-ownership.
The implementation of this method usually takes place as follows:
The use of this method therefore results in multiple changes to the declaration of co-ownership, as long as the project is not fully completed.
B) The method of concomitant declaration of co-ownership
The method of of concomitant declaration of co-ownership is to create new co-ownership on different private portions of an already established co-ownership. The implementation of this method usually takes place as follows:
C) The cumulative application of these two methods
It is also possible to use both methods cumulatively in the same project. In the context of a co-ownership, certain private portions are designated as transitional lots and will be the subject of a subdivision which will then be incorporated into the co-ownership, by amending the initial declaration of co-ownership. Other private portions will be used to establish concomitant co-ownerships that will not be modified in the initial co-ownerships.
WHAT YOU SHOULD KNOW ! The development of a phased co-ownership, spread over a more or less long period of construction, involves a phase-in construction where buildings are being completed and land waiting to receive the construction site. For the latter, notarial practice has introduced the technique of transitional lots. These are lots, often consisting of bare land and described as a private portion, which will be replaced by final lots once construction is completed.