Bill 16: the rights of the buyer of a condo better protected.
Since January 10, 2020, the date of entry into force of many changes made by Bill 16, the transactions of buyers of private condominium units are better protected. Indeed, a series of new duties are imposed on the promoter-builder of a condominium.
Protection of down payments on the purchase of a condo
The deposit paid to a builder or a promoter when buying a divided co-ownership unit must be protected by this promoter by using a guarantee plan, an insurance, a bond or a deposit in a trust account of a member of a professional order, such as a lawyer or a notary (art. 1791.1 C.c.Q.).
A coming government regulation may provide in the close future other means of protection. Until then, this protection provision has been in effect since January 10, 2020. If the purchased unit is not delivered on time by the promoter, the deposit will be returned to the buyer.
On February 2020, the Ministère des affaires municipales et de l’habitation issued a frequently asked questions guide, clarifying how and when this deposit chould be applied.
Other important changes for the buyer
Bill 16 also enacts many obligations and restrictions relating to divided co-ownership, including for example provisions dealing with the provisional budget of your condo association and the information note attached to the preliminary contract signed with a unit buyer.
Reimbursement by the promoter: the promoter will therefore have to reimburse the union for the difference (if it is more than 10%) between the expenses incurred by the condo syndicate during the first fiscal year following the moment when the promoter no longer administers the building (the “loss of control”) and the sums provided for in the provisional budget. This measure should encourage developers to better predict the costs of the building they sell, build or renovate.
Cancellation of the sale : the buyer can withdraw from his promise to purchase a condo unit as long as he has not received the information note containing the information relating to his unit (article 1786 C.C.Q.). He will ask the promoter to reduce the purchase price or he will ask for the nullity of the sale - and of damages - if this note is wrong. These remedies are available within 90 days of the sale or within 90 days of the extraordinary meeting of co-owners following the loss of control by the promoter.
Promoter's information: The promoter must provide several documents to the co-ownership syndicate within 30 days of the extraordinary meeting of co-owners, including the building's maintenance book and the study of the provident fund.
Amounts to be paid into the contigency fund: these sums will now be fixed on the basis of the recommendations made in the study of the quinquennial contingency fund (every 5 years).
Fifty years after the introduction in Quebec of the law of divided co-ownership, Bill 16 significantly revises the main relevant provisions of the Civil Code of Quebec. This reform was expected: it satisfied buyers by securing their purchase, sometimes well remembered as the first real estate purchase of their life.
Whether you are a promoter, buyer or future buyer, co-owner, administrator of a co-ownership syndicate or its manager, we can advise you at any time and meet with you to discuss the files of your co-ownership.
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