Adoption of Bill 16: significant changes applicable to the co-ownership syndicate
On December 5, 2019, Bill 16 was passed by the National Assembly. As of January 10, 2020, a series of important obligations will now have to be respected by the co-ownership syndicate. Indeed, Bill 16 substantially amends several articles of the Civil Code of Québec relating to the management of your co-ownership.
The contingency fund and the conservation of the building
The syndicate must keep up to date a building maintenance booklet and obtain a study of the contingency fund establishing the sums necessary for this fund to be sufficient to pay for major repairs and the replacement of common parts (articles 1070.2 and 1071 CCQ). This study must be renewed every 5 years;
The syndicate must establish the annual contribution of the co-owners to the contingency fund on the basis of this study (art. 1071 C.C.Q.). This effort, if necessary for certain condominiums, in the contribution of the provident fund must begin within 30 days of the annual meeting of co-owners after obtaining the study of the provident fund. The syndicate will however have 10 years to garnish the contingency fund up to the amount provided in this study;
The syndicate may use the contingency fund without authorization from the assembly of co-owners (art. 1071 C.C.Q.);
The syndicate must keep up to date a certificate on the state of its finances and on the state of the building, and a copy must be given to the co-owners (1072.2 C.C.Q.);
The co-owner who sells his unit must give the buyer this certificate on the state of the syndicate’s finances and the state of the building (art. 1068.1 CCQ): the syndicate must therefore provide him with this certificate and not delay the sale of his unit, or endanger it, since it will be a condition of his promise to purchase (1785 CCQ);
The syndicate must also provide the promising buyer of a private unit with general information concerning the building and the syndicate "which are such as to enable it to give informed consent" (art. 1068.2 C.C.Q.). This general information will include that already communicated to the buyer under article 1069 C.C.Q., before the sale takes place: the state of the building, the work planned or to be planned, etc. It is also expected that the government will have the power to determine other information that must appear in the information note (1786 C.C.Q.) or in the preliminary purchase contract;
The syndicate may also obtain from the architect and engineers who participated in the construction of the building their plans (art. 1083.1 C.c.Q.).
New rights and remedies
Other additions, just as important, modify the rights of the board of directors of the union and the co-owners:
The syndicate must forward to the co-owners the minutes of any meeting of co-owners it holds or any written resolution it adopts at meetings of the board of directors, within 30 days of them (articles 1068.1 CCQ and 1102.1 CCQ);
A co-owner or director may ask the court to cancel, or even modify (which is new), a decision of the board of directors no later than 90 days thereof, if this decision is biased or was taken with the intention of harming the co-owners or disregarding their rights. This modification is harmonized with the current article 1103 CCQ, which provides for the right to judicially request the nullity of a meeting of co-owners, and whose deadline for forfeiture to exercise this right also increases from 60 to 90 days (article 1086.2 CCQ );
Directors (1086.3 C.C.Q.) or co-owners (1103.1. C.C.Q.) prevented from voting in the absence of a quorum following the opposition or systematic impediment of some of them, may henceforth obtain appropriate orders from the court. These new remedies are beneficial and will certainly make it possible to unblock the functioning of small and medium-sized condominiums, in particular because of the requirements of the number of votes according to articles 1097 C.C.Q. and 1098 C.C.Q. ;
Following an amendment adopted during the study of bill 16, the co-owner who owes three months of common charges may not be elected director of the Syndicate’s Board of directors (art. 1086 C.C.Q.). This measure logically harmonizes with that of article 1094 C.C.Q., which prohibits the co-owner thus indebted to vote at meetings of co-owners.
Coming into force
Most of these new obligations come into force on January 10, 2020. The union's obligations to establish a building maintenance book or to obtain a study of the provident fund (articles 1070.2 and 1071 CCQ), will come into force at the time of the adoption by the government of specific regulations which will be dedicated to them.
Do not panic: the building maintenance book and the study of the contingency fund can be established and obtained by the syndicate no later than 3 years and one day after the adoption by the government of the regulations dedicated to them ( Article 137 of Law 16). Equivalencies will also be provided for condominiums that already have such a maintenance booklet or a study of their contingency fund.
Successively since 2018, Bills 141 and 16, as well as the subsequent modification of article 1074.2 C.C.Q. of Bill 41 as part of the reform of co-ownership insurance, have significantly changed the law of divided co-ownership. 2020 will therefore be an important year for co-ownership syndicates, which will have to prepare for most of these new obligations.
This is particularly the case for the description of private units (article 1070 CCQ), provided for in Bill 141 to determine the “reference unit” useful when sharing compensation in the event of a claim between the co-ownership insurer and that of the affected private unit. This description must be approved by the assembly of co-owners no later than June 13, 2020 for co-ownerships syndicate that existed on June 13, 2018.
While the law of divided co-ownership celebrates its fiftieth anniversary in Quebec, the changes brought by this real legislative revision must be well understood and analyzed in order to apply them in the right way and at the right time in the management of your co-ownership: we will be happy to assist you and discuss it together.
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