Before purchasing the apartment of your dreams, find out the status of the expenses (condo fees) of the apartment owing by the vendor, as you will have to pay the arrears once you become the owner of the apartment.
Common expenses owing or to become due
To know precisely how to allocate the expenses between the purchaser and the vendor, the purchaser or its notary must, before the signing of the deed of sale, ask the Board of Directors or the manager for a certificate supplying the following information:
A statement of common expenses of the vendor owing to the syndicate;
The amount of the expenses (alteration, enlargement or improvement work to the common portions) already committed, before the sale, by the Board of Directors or the general meeting of the co-owners, and for which the payments will become payable after the date of the sale.
A statement of the notices of assessments (condo fees) established by the Board of Directors before the sale.
Receiving this information is crucial for the purchaser, as he is responsible for the unpaid common expenses of the vendor (Article1069 of the Civil Code of Quebec). However, if a request for the statement of common expenses has been sent to the syndicate (before the final sale), either by the notary or the purchaser, and the syndicate has not responded in the period of 15 days following such request, the latter cannot claim the common expenses owing by the vendor from the purchaser.
The allocation of common expenses
The vendor and the purchaser may calculate the adjustments of the common expenses themselves with or without the help of the notary. They need to agree on the date of the adjustments. Often, this date corresponds to the date of transfer of the property or the date of taking possession of the apartment. From that moment, the purchaser assumes the payment of his contributions to common expenses.
The same principle applies to the contributions to the contingency fund: the vendor and the purchaser must agree on the date from which the purchaser will assume the payment of the contributions to the contingency fund. Many vendors ask themselves the following question:
- can the co-owner-vendor ask for the reimbursement of his unused contributions into the contingency fund?
- A co-owner cannot ask for such reimbursement from the syndicate as article 1071 of the Civil Code of Quebec provides that these funds remain the property of the syndicate.
Other matters may be the object of arrangements and negotiations, such as the allocation of the cost of urgent repairs, which need to be carried out before the final sale. In such cases, who should pay? It is in the interest of both parties to deal with any potentially litigious matter by inserting clear provisions in the preliminary contract or the offer to purchase.
WHAT YOU SHOULD KNOW! The allocation (adjustments) of common expenses can be the object of an arrangement between the vendor and the purchaser. When the sale occurs before payments already fixed in a special assessment become due, it is not a rare occurrence that the vendor will agree to reimburse to the purchaser a portion of such assessment, at the time of the sale.
WARNING! Common expenses become payable by the owner of the apartment when they become due. To avoid unpleasant surprises, you should find out the amount of unpaid common expenses of your vendor. You will therefore avoid having to pay them, over and above any possible forthcoming special assessments known by your vendor.
CONSULT THE PUBLICATION: Purchase and sale of a condo: Everything you should know at pages 124 and following.