Bill 16: The changes that every co-owner should know about

Date Published : Aug-19-2020

Written By : Phillip Livingston

In Quebec, most condos can be classified as divided co-ownerships. That means the building has private areas (the owners’ units) and common areas that all of the owners share (party rooms, pools, outdoor spaces, etc.).   

The Quebec Government passed Bill 16 in December of 2019, and this new law will impact some of the legislative framework applicable to divided co-ownerships in the province.  

Bill 16 aims to do a few things, including:

  • Provide divided co-ownerships with an improved framework
  • Regulate building inspections
  • Facilitate better communication and greater transparency between boards and co-owners
  • Protect deposits paid to a builder or developer for the purchase of a fraction of an immovable under divided co-ownership

This bill may bring forth a lot of unexpected changes, however the long-term results of the new laws are beneficial to co-owners and the buildings that they inhabit. Better communication and more comprehensive financial plans should prevent many homeowners from having to deal with unpleasant surprises related to unnecessarily expensive renovations, among other issues that have been making life harder for those who live in a divided co-ownership.

 

Communication within a divided co-ownership

Boards are now expected to maintain better communication with co-owners, keep up-to-date records, and provide important documents to co-owners within a reasonable timeframe. Below are some of the provisions stated in Bill 16 that address communication.

The syndicate keeps at the disposal of the co-owners a register containing the name and mailing address of all co-owners, all lessees, and all borrowers by virtue of a loan for use. The register cannot contain additional personal co-owner, lessee or borrower information unless they expressly consent to it.

The register must also have the minutes of the meetings of the co-owners and of the board of directors, resolutions in writing, the by-laws of the immovable (condo) and any amendments made to the by-laws, and the financial statements of the building.

The board of directors is required to notify to the co-owners the minutes of every meeting held by the board, and every resolution in writing passed by the board, within 30 days of the meeting or of the passage of the resolution.

Similarly, the board of directors shall have the minutes of every general meeting and every resolution in writing passed by a general meeting available to co-owners within 30 days of the general meeting or of the passage of the resolution.

If a decision is biased, was made with the intent to harm the co-owners, or is in contempt of their rights, a co-owner or director may apply to the court to annul or amend a decision made by the board of directors.  

The syndicate is also required to maintain a declaration of co-ownership, copies of contracts to which it is a party, a copy of the cadastral plan, the plans and specifications of the building if they are available, maintenance logs, contingency fund studies and all other documents relating to the immovable and the syndicate. If requested, these documents must be made available to co-owners.

The syndicate’s maintenance logs must document all maintenance done and any maintenance required. The syndicate must keep the logs up to date and have them reviewed periodically.

It must be possible to consult the register and any documents kept at the disposal of the co-owners in the presence of a director or a person designated for that purpose by the board of directors, at reasonable hours, and according to the rules provided in the by-laws of the immovable. Every co-owner has the right to obtain a copy of the content of the register for a reasonable cost.

A person who acquires part of an immovable under co-ownership, by whatever means, including the exercise of a hypothecary right, shall notify the syndicate within 15 days. A co-owner who leases their private portion, or loans their portion by virtue of a loan for use, shall also notify the syndicate and mention, where applicable, the name of the lessee or borrower as well as the term of the lease or loan.

 

Contingency fund

In order to ensure there is enough money available to pay for major building repairs and necessary common area replacements, Bill 16 has made it mandatory for divided co-ownerships to maintain a sufficient contingency fund.  

The bill states that the fund must be partly liquid and be available at short notice, and its capital must be guaranteed.

Furthermore, every five years, the syndicate has to complete a contingency fund study that verifies the sums necessary for the fund to properly cover future common element repair and replacement costs. The study must be conducted by a member of a professional order, determined by government regulation. The regulation may also determine the content and methodology of the study.

 

Finances

The board must take steps to be more transparent with co-owners when it comes to the building’s finances.

For example, the board of directors is required to consult the general meeting of the co-owners before deciding on any special contribution to the common expenses.

Furthermore, the syndicate must keep an up-to-date certificate attesting to the state of its finances, and the condition of the immovable held in co-ownership. Co-owners who request it must be given a copy of the certificate within 15 days, and for a reasonable cost.

The syndicate has the obligation to keep this certificate up to date from the day of the appointment of a new board of directors, after the developer loses control of the syndicate.

 

Building inspection  

To ensure buildings are well maintained, new rules have been enforced to ensure the person conducting a building inspection has the knowledge and experience to do the job properly.    

A person shall, in the cases and on the terms and conditions determined by regulation of the board, obtain from it a certificate to act as a building inspector.

The board has the right to refuse to issue, amend or renew a certificate. It can also suspend or cancel a certificate if, for example, the applicant or holder:

  • does not comply with one of the terms or conditions set out in this Act or prescribed by regulation of the board
  • has submitted falsified facts to the board or misrepresented facts, or has failed to provide the board with information
  • has not complied with an order issued under this Act
  • is in a conflict of interest situation
  • has failed to provide the board with what is needed to carry out a verification or inspection.

If issuing or maintaining the certificate would be contrary to the public interest, for example, the applicant or holder is unable to prove good moral character, given his past conduct, then the board has the right to refuse the certificate.

The board must keep a public register in which the names and contact information of the certificate holders, and their certificate numbers, are entered.

 

How to make these changes

To comply with all of these new changes, some syndicates will need a new system in place to help them with the transition. That may mean hiring a property management company, or selecting time-saving property management software.     

 

 

Maintaining an accessible register

The right property management software can be a game-changer when it comes to communications and recordkeeping. Con
do Control Central, for example, has a Unit File, which is essentially an online community database. Create a detailed file for each co-owner or renter, and make edits as necessary. Co-owners also have the option to include contact information in an online Phone Book. With this feature, users can view contact information of other residents who consented to sharing their information.

Announcements can be sent out to the entire community, or specific individuals, to keep them informed about any new meeting minutes, amendments to by-laws, financial reports, and more.

 

Storing meeting minutes, bylaws, and financial statements

Speaking of meeting minutes and financial reports, boards and property managers can safely and easily store all of their documents on a File Library. Documents, including certificates, photos, newsletters, contracts, and more, can (and should) be organized into folders, and permissions can be set so that only boards have access to certain files. No more storing and sifting through papers. And, when co-owners can access documents by themselves, they take up less of the board’s precious time.

 

Documenting maintenance 

Finally, our Maintenance Tracking feature can help syndicates stay on top of current and future repairs. Log all equipment activities and attach accompanying documents that support the request or repair. It’s even possible to preschedule repairs so that management doesn’t have to remember when the next scheduled repair will take place.

 

Don’t wait to make changes

The Quebec government is giving syndicates some time to comply with Bill 16’s new requirements. For example, co-ownerships that were established before the Act came into effect have three years to conduct their first contingency fund study. However, not all requirements have been given such cushy deadlines.

The sooner syndicates make the changes required to comply with Bill 16, the better. Give your community enough time to adjust, and use this as an opportunity to create a more cohesive, organized syndicate.

 

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