Lacombe Avocats

CHAPTER III

DIVIDED CO-OWNERSHIP OF IMMOVABLES

DIVISION I

ESTABLISHMENT OF DIVIDED CO-OWNERSHIP

1038. Divided co-ownership of an immovable is established by publication of a declaration under which ownership of the immovable is divided into fractions belonging to one or several persons.

1039. Upon the publication of the declaration of co-ownership, the co-owners as a body constitute a legal person, the objects of which are 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.

The legal person is called a syndicate.

1040. Divided co-ownership of an immovable that is built by an emphyteuta or that is subject to superficies may be established if the unexpired term of the right, at the time of publication of the declaration, is more than 50 years.

In cases arising under the first paragraph, each co-owner, dividedly and proportionately to the relative value of his fraction, is liable for the divisible obligations of the emphyteuta or superficiary, as the case may be, towards the owner of the immovable subject to emphyteusis or superficies. The syndicate assumes the indivisible obligations.

DIVISION II

FRACTIONS OF CO-OWNERSHIP

1041. The relative value of each of the fractions of the divided co-ownership is established with reference to the value of all the fractions together, taking into account the nature, destination, dimensions and location of the private portion of each fraction, but not its use.

The relative value is determined in the declaration.

1042. Those portions of the buildings and land that are owned by a specific co-owner and are for his exclusive use are called the private portions

1043. Those portions of the buildings and land that are owned by all the co-owners and serve for their common use are called the common portions.

However, some of the portions may serve for the use of certain, or only one, of the co-owners. The rules regarding the common portions apply to the common portions that have restricted use.

1044. The following are presumed to be common portions: the ground, yards, verandas or balconies, parks and gardens, access ways, stairways and elevators, passageways and halls, common service areas, parking and storage areas, basements, foundations and main walls of buildings, and common equipment and apparatus, such as the central heating and air-conditioning systems and the piping and wiring, including that which runs through private portions.

1045. Partitions or walls that are not part of the foundations and main walls of a building but which separate a private portion from a common portion or from another private portion are presumed common.

1046. Each co-owner has an undivided right of ownership in the common portions. His share of the common portions is equal to the relative value of his fraction.

1047. Each fraction constitutes a distinct entity and may be alienated in whole or in part; the alienation includes, in each case, the share of the common portions appurtenant to the fraction, as well as the right to use the common portions for restricted use, where applicable.

1048. The share of the common portions appurtenant to a fraction may not, separately from the private portion of the fraction, be the subject of alienation or an action in partition.

1049. Alienation of a divided part of a private portion is without effect unless the declaration of co-ownership and the cadastral plan have been altered prior to the alienation so as to create a new fraction, describe it, give it a separate cadastral number and determine its relative value, or to record the alterations made to the boundaries between contiguous private portions.

1050. Each fraction forms a distinct entity for the purposes of property assessment and taxation.

The syndicate shall be impleaded in the case of any judicial contestation of the assessment of a fraction by a co-owner.

1051. Notwithstanding articles 2650 and 2662, a hypothec, any additional security accessory thereto or any prior claims existing at the time of registration of the declaration of co-ownership on the whole of an immovable held in co-ownership are divided among the fractions according to the relative value of each or according to any other established proportion.

DIVISION III

DECLARATION OF CO-OWNERSHIP

§ 1.  — Content of the declaration

1052. A declaration of co-ownership comprises the act constituting the co-ownership, the by-laws of the immovable and a description of the fractions.

1053. An act constituting the co-ownership defines the destination of the immovable, of the private portions and of the common portions.

The act also specifies the relative value of each fraction, indicating how that value was determined, the share of the expenses and the number of votes attached to each fraction and provides any other agreement regarding the immovable or its private or common portions. In addition, it specifies the powers and duties of the board of directors of the syndicate and of the general meeting of the co-owners.

1054. The by-laws of an immovable contain the rules on the enjoyment, use and maintenance of the private and common portions, and those on the operation and administration of the co-ownership.

The by-laws also deal with the procedure of assessment and collection of contributions to the common expenses.

1055. A description of the fractions contains the cadastral description of the private portions and common portions of the immovable.

Such a description also contains a description of the real rights charging the immovable or existing in its favour, other than hypothecs and additional security accessory thereto.

1056. No declaration of co-ownership may impose any restriction on the rights of the co-owners except restrictions justified by the destination, characteristics or location of the immovable.

1057. The by-laws of the immovable may be set up against the lessee or occupant of a private portion upon his being given a copy of the by-laws or the amendments to them by the co-owner or, if not by him, by the syndicate.

1058. Unless express provision is made therefor in the act constituting the co-ownership, no fraction may be held by several persons each having a periodic and successive right of enjoyment in the fraction, nor may a fraction be alienated for that purpose.

Where the act makes provision for a periodic and successive right of enjoyment, it shall indicate the number of fractions that may be held in this way, the occupancy periods, the maximum number of persons who may hold these fractions, and the rights and obligations of the occupants.

§ 2.  — Registration of the declaration

1059. A declaration of co-ownership, and any amendments to the act constituting the co-ownership or the description of the fractions, shall be in the form of notarial act en minute.

The declaration shall be signed by all the owners of the immovable, by the emphyteuta or the superficiary, if any, and by all the creditors holding hypothecs on the immovable; amendments are signed by the syndicate.

1060. The declaration and any amendments to the act constituting the co-ownership or the description of the fractions are filed at the registry office. The declaration is registered in the land register under the registration numbers of the common portions and the private portions. The amendments are registered under the registration number of the common portions only, unless they directly affect a private portion. However, it is sufficient for amendments made to the by-laws of the immovable to be filed with the syndicate.

The emphyteuta or superficiary, if any, shall give notice of the registration to the owner of the immovable under emphyteusis or on which superficies has been established.

1061. The registration of an act concerning a private portion is valid with regard to the share of the common portions appurtenant to it, without any requirement to make an entry under the registration number of the common portions.

1062. The declaration of co-ownership binds the co-owners, their successors and the persons who signed it, and produces its effects towards them from the time of its registration.

DIVISION IV

RIGHTS AND OBLIGATIONS OF CO-OWNERS

1063. Each co-owner has the disposal of his fraction; he has free use and enjoyment of his private portion and of the common portions, provided he complies with the by-laws of the immovable and does not impair the rights of the other co-owners or the destination of the immovable.

1064. Each co-owner contributes in proportion to the relative value of his fraction to the expenses arising from the co-ownership and from the operation of the immovable and the contingency fund established under article 1071, although only the co-owners who use common portions for restricted use contribute to the costs resulting from those portions.

1065. A co-owner who leases his private portion shall notify the syndicate and give the name of the lessee.

1066. No co-owner may interfere with the carrying out, even inside his private portion, of work required for the preservation of the immovable decided upon by the syndicate or of urgent work.

Where a private portion is leased, the syndicate gives the lessee, where applicable, the notices prescribed by articles 1922 and 1931 regarding improvements and work.

1067. A co-owner who, as a result of work carried out, suffers injury in the form of a permanent diminution in the value of his fraction, a grave disturbance to enjoyment, even if temporary, or through deterioration, is entitled to obtain an indemnity from the syndicate if the syndicate ordered the work or, if it did not, from the co-owners who did the work.

1068. Every co-owner may, within five years from the day of registration of the declaration of co-ownership, apply to the court for a revision, for the future, of the relative value of the fractions and of the apportionment of the common expenses.

The right to apply for a revision may be exercised only if there exists, between the relative value assigned to a fraction or the share of common expenses allocated thereto and the value or share that should have been established, according to the criteria provided in the declaration of co-ownership, a difference in excess of one-tenth in favour of another co-owner or to the prejudice of the applicant co-owner.

1069. A person who acquires a fraction of divided co-ownership, by whatever means, including the exercise of a hypothecary right, is bound to pay all common expenses due with respect to that fraction at the time of the acquisition.

A person contemplating the acquisition of such a fraction may request from the syndicate of co-owners a statement of the common expenses due with respect to the fraction and the syndicate is thereupon authorized to provide the statement to him, subject to the syndicate giving prior notice to the owner of the fraction or his successors; in such a case, the prospective acquirer is bound to pay the common expenses only if the statement is provided to him by the syndicate within 15 days of the request.

The statement provided is adjusted to the last annual budget of the co-owners.

DIVISION V

RIGHTS AND OBLIGATIONS OF THE SYNDICATE

1070. The syndicate keeps a register at the disposal of the co-owners containing the name and address of each co-owner and each lessee, the minutes of the meetings of the co-owners and of the board of directors and the financial statements.

It also keeps at their disposal the declaration of co-ownership, the copies of the contracts to which it is a party, a copy of the cadastral plan, the plans and specifications of the building built, where applicable, and all other documents relating to the immovable and the syndicate.

1071. The syndicate establishes, according to the estimated cost of major repairs and the cost of replacement of common portions, a contingency fund to be used exclusively for such repairs and replacement, which is liquid and available at short notice. The syndicate is the owner of the fund.

1072. Each year, the board of directors, after consultation with the general meeting of the co-owners, fixes their contribution for common expenses, after determining the sums required to meet the expenses arising from the co-ownership and the operation of the immovable, and the amounts to be paid into the contingency fund.

The contribution of the co-owners to the contingency fund is at least 5% of their contribution for common expenses. In fixing the contribution, the rights of any co-owner in the common portions for restricted use may be taken into account.

The syndicate, without delay, notifies each co-owner of the amount of his contribution and the date when it is payable.

1073. The syndicate has an insurable interest in the whole immovable, including the private portions. It shall take out insurance against ordinary risks, such as fire and theft, on the whole of the immovable, except improvements made by a co-owner to his portion. The amount insured is equal to the replacement cost of the immovable.

The syndicate shall also take out third person liability insurance.

1074. A co-owner’s non-compliance with a condition of the insurance contract may not be set up against the syndicate.

1075. The indemnity owing to the syndicate following a substantial loss is, notwithstanding article 2494, paid to the trustee appointed in the act constituting the co-ownership or, where none has been appointed, designated by the syndicate.

The indemnity shall be used to repair or rebuild the immovable, unless the syndicate decides to terminate the co-ownership, in which case the trustee, after determining each co-owner’s share of the indemnity according to the relative value of his fraction, pays the prior and hypothecary creditors out of that share according to the rules in article 2497. For each of the co-owners, he remits the balance of the indemnity to the liquidator of the syndicate with his report.

1076. The syndicate may, if authorized to do so, acquire or alienate fractions, common portions or other real rights.

A private portion does not cease to be private by the fact that the fraction is acquired by the syndicate, but the syndicate has no vote for that portion at the general meeting and the total number of votes that may be cast is reduced accordingly.

1077. The syndicate is liable for damage caused to the co-owners or third persons by faulty design, construction defects or lack of maintenance of the common portions, without prejudice to any recursory action.

1078. A judgment condemning the syndicate to pay a sum of money is executory against the syndicate and against each of the persons who were co-owners at the time the cause of action arose, proportionately to the relative value of his fraction.

The judgment may not be executed against the contingency fund, except for a debt arising from the repair of the immovable or the replacement of common portions.

1079. The syndicate may demand the resiliation of the lease of a private portion, after notifying the lessor and the lessee, where the non-performance of an obligation by the lessee causes serious injury to a co-owner or to another occupant of the immovable.

1080. Where the refusal of a co-owner to comply with the declaration of co-ownership causes serious and irreparable injury to the syndicate or to one of the co-owners, either of them may apply to the court for an injunction ordering the owner to comply with the declaration.

If the co-owner violates the injunction or refuses to obey it, the court may, in addition to the other penalties it may impose, order the sale of the co-owner’s fraction, in accordance with the provisions of the Code of Civil Procedure (chapter C-25.01) regarding the sale of the property of others.

1081. The syndicate may institute any action on the grounds of latent defects, faulty design or construction defects of the immovable or defects in the ground. In a case where the faults or defects affect the private portions, the syndicate may not proceed until it has obtained the authorization of the co-owners of those portions.

Where the defendant sets up the failure to act with diligence against an action based on a latent defect, such diligence is appraised in respect of the syndicate or a co-owner from the day of the election of a new board of directors, after the developer loses control of the syndicate.

1082. The syndicate, within six months of being notified by the owner of an immovable under emphyteusis or superficies that he intends to transfer by onerous title his rights in the immovable, may acquire such rights in preference to any other potential acquirer during that period. If it is not notified of the planned transfer, it may, within six months from the time it learns that a third person has acquired the owner’s rights, acquire such rights from that person by reimbursing him for the transfer price and the costs he has paid.

1083. The syndicate may join an association of co-ownership syndicates formed for the creation, administration and maintenance of common services for several immovables held in co-ownership, or for the pursuit of common interests.

DIVISION VI

BOARD OF DIRECTORS OF THE SYNDICATE

1084. The composition of the board of directors of the syndicate, the mode of appointment, replacement and remuneration of the directors as well as the other terms and conditions of their office are fixed in the by-laws of the immovable.

The court, upon application by a co-owner, may appoint or replace a director and fix the terms and conditions of his office if there is no provision therefor in the by-laws or if it is impossible to proceed in the manner prescribed therein.

1085. The day-to-day administration of the syndicate may be entrusted to a manager who may, but need not be, chosen from among the co-owners.

The manager acts as an administrator of the property of others charged with simple administration.

1086. The syndicate may replace a director or manager who, being a co-owner, neglects to pay his contribution to the common expenses or to the contingency fund.

DIVISION VII

GENERAL MEETING OF THE CO-OWNERS

1087. The notice calling the annual general meeting of the co-owners shall be accompanied, in addition to the balance sheet, by the income statement for the preceding financial period, the statement of debts and claims, the budget forecast, any draft amendment to the declaration of co-ownership and a note on the essential terms and conditions of any proposed contract or planned work.

1088. Within five days of receiving notice of a general meeting of the co-owners, any co-owner may cause a question to be placed on the agenda.

Before the meeting is held, the board of directors gives written notice to the co-owners of the questions newly placed on the agenda.

1089. Co-owners holding a majority of the votes constitute a quorum at general meetings.

If a quorum is not reached, the meeting is adjourned to a later date, notice of which is given to all the co-owners; three-quarters of the members present or represented at the new meeting constitute a quorum.

A meeting at which there is no longer a quorum shall be adjourned if a co-owner requests it.

1090. Each co-owner is entitled to a number of votes at a general meeting proportionate to the relative value of his fraction. Co-owners of a fraction held in indivision vote in proportion to their undivided shares.

1091. Where, in a co-ownership comprising fewer than five fractions, a co-owner is entitled to more than one-half of all the votes available to the co-owners, the number of votes to which he is entitled at a meeting is reduced to the total number of votes to which the other co-owners present or represented at the meeting are entitled.

1092. At the end of the second and third years after the date of registration of the declaration of co-ownership, a developer of a co-ownership comprising five or more fractions is not entitled to more than 60% of all the votes of the co-owners, in addition to the votes attached to the fraction serving as his residence.

The limit is thereafter reduced to 25%.

1093. Any person who, at the time of registration of a declaration of co-ownership, owns at least one-half of all the fractions, or his successors, other than a person who in good faith acquires a fraction for a price equal to its market value with the intention of inhabiting it, is considered to be a developer.

1094. Any co-owner who has not paid his share of the common expenses or his contribution to the contingency fund for more than three months is deprived of his right to vote.

1095. Only assignments of the voting rights of a co-owner which have been declared to the syndicate may be set up against it.

1096. Decisions of the syndicate, including a decision to correct a clerical error in the declaration of co-ownership, are taken by a majority vote of the co-owners present or represented at the meeting.

1097. Decisions concerning the following matters require a majority of co-owners representing three-quarters of the votes of all the co-owners:

(1)  acts of acquisition or alienation of immovables by the syndicate;

(2)  work for the alteration, enlargement or improvement of the common portions, and the apportionment of its cost;

(3)  the construction of buildings to create new fractions;

(4)  the amendment of the act constituting the co-ownership or of the description of the fractions. 

1098. Decisions on the following matters require a majority of three-quarters of the co-owners representing 90% of the votes of all the co-owners:

(1)  to change the destination of the immovable;

(2)  to authorize the alienation of common portions the retention of which is necessary to maintain the destination of the immovable;

(3)  to amend the declaration of co-ownership in order to permit the holding of a fraction by several persons having a periodic and successive right of enjoyment.

1099. Where the number of votes to which a co-owner or a developer is entitled is reduced by the effect of this section, the total number of votes available to all the co-owners to decide a question requiring a majority in number and in votes is reduced by the same number.

1100. The co-owners of contiguous private portions may alter the boundaries between their private portions without obtaining the approval of the general meeting provided they obtain the consent of their hypothecary creditors and of the syndicate. No alteration may increase or decrease the relative value of the group of private portions altered or the total of the voting rights attached to them.

The syndicate amends the declaration of co-ownership and the cadastral plan at the expense of the co-owners contemplated in the first paragraph; the act of amendment shall be accompanied by the consents of the creditors, the co-owners and the syndicate.

1101. Any stipulation in the declaration of co-ownership that changes the number of votes required to make a decision under this chapter is deemed unwritten.

1102. Any decision of the syndicate which, contrary to the declaration of co-ownership, imposes on a co-owner a change in the relative value of his fraction, a change of destination of his private portion or a change in the use he may make of it is without effect. 

1103. Any co-owner may apply to the court to annul a decision of the general meeting if the decision is biased, if it was taken with intent to injure the co-owners or in contempt of their rights, or if an error was made in counting the votes.

The action is forfeited unless instituted within 60 days after the meeting.

If the action is futile or vexatious, the court may condemn the plaintiff to pay damages.

DIVISION VIII

LOSS OF CONTROL OF THE SYNDICATE BY THE DEVELOPER

1104. Within 90 days from the day on which the developer of a co-ownership ceases to hold a majority of votes in the general meeting of the co-owners, the board of directors shall call a special meeting of the co-owners to elect a new board of directors.

If the meeting is not called within 90 days, any co-owner may call it.

1105. The board of directors renders account of its administration at the special meeting.

It produces the financial statements, which shall be accompanied with the comments of an accountant on the financial situation of the syndicate. The accountant shall, in his report to the co-owners, indicate any irregularity that has come to his attention.

The financial statements shall be audited on the application of co-owners representing 40% of the votes of all the co-owners. The application may be made at any time, even before the meeting.

1106. The accountant has a right of access at all times to the books, accounts and vouchers concerning the co-ownership.

He may require from the developer or an administrator any information or explanation that he considers necessary for the performance of his duties.

1107. The new board of directors may, within 60 days after the election, terminate without penalty a contract entered into before the election by the syndicate for maintenance of the immovable or for other services, if the term of the contract exceeds one year.

1991, c. 64, a. 1107; I.N. 2014-05-01.

DIVISION IX

TERMINATION OF CO-OWNERSHIP

1108. Co-ownership of an immovable may be terminated by a decision of a majority of three-quarters of the co-owners representing 90% of the votes of all the co-owners.

The decision to terminate the co-ownership shall be recorded in writing and signed by the syndicate and the persons holding hypothecs on the immovable or part thereof. This decision is registered in the land register under the registration numbers of the common portions and private portions.

1109. The syndicate is liquidated according to the rules of Book One on the liquidation of legal persons.

For that purpose, the liquidator is seized of the immovable and of all the rights and obligations of the co-owners in the immovable, in addition to the property of the syndicate.

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