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Governing Legislation
What legislation and regulations govern syndicates of co-owners (which is the term used for “condominiums”) in Quebec?
Warranty Programs
Do provincial legislation and/or regulations require that syndicate developers provide a new home warranty to buyers?
Developers must provide one only if the building has no more than four units stacked one above the other.
Buyers of new syndicates are also covered by the Civil Code of Quebec, which provides a five-year warranty (after building completion) against hidden defects.
Taxes & Additional Costs
What provincial and federal taxes do syndicate buyers pay on their units?
Provincial tax: There is Quebec Sales Tax (QST) on the price of new units but not on previously owned units. Like other homebuyers, purchasers of syndicates can apply for a partial refund of the QST depending on the purchase price of the property. For details, see New or Substantially Renovated Housing, Revenu Québec.
Federal tax: Buyers pay Goods and Services Tax (GST) on the price of new units.
Buyer Beware
If you are purchasing a re-sale condo, GST will apply to your purchase if:
- You are buying the unit from someone who acquired and used the unit primarily (more than 50 percent) for business purposes (unless this was to earn long-term rental income);
- You are buying the unit from someone who has claimed input tax credits for improvements to the unit; or
- The unit has been substantially renovated. To find out what qualifies as a substantial renovation, see Substantial Renovations and the GST/HST New Housing Rebate, Canada Revenue Agency.
Be sure to enquire about the above before putting an offer on a re-sale condominium.
Are there any GST/HST rebate programs for syndicate buyers?
Yes. Like other homebuyers, purchasers can apply for a GST/HST New Housing Rebate. This rebate reduces the GST and the federal part of the HST on a declining scale, depending on the purchase price of your new home. For eligibility information, see GST/HST New Housing Rebate, Canada Revenue Agency.
Are buyers of new and re-sale syndicates responsible for any other charges levied by the Province?
No, but municipalities charge buyers a land transfer tax (also referred to as a “welcome tax”) based on a home’s value.
Reserve Fund Requirements
Do provincial legislation/regulations require that all syndicates in Quebec have a contingency fund (called a reserve fund in other provinces)?
Yes. Syndicate co-owners decide how much money should be in the fund after estimating the cost of major repairs and the replacement of the common elements. Each owner’s contribution to the fund must be at least 5 percent of their contribution to the common expenses.
Syndicate Registration
How is a new syndicate of co-owners registered?
A syndicate of co-owners (called a condominium corporation in other provinces) is created when a declaration of co-ownership is registered at the Registry Office. There are three parts to the declaration of co-ownership: a constituting act, a description of the building’s fractions (a co-owner’s fraction consists of his or her unit(s) and his or her share of the common elements) and the syndicate’s bylaws.
Sale of Units
What rules does the developer have to follow when selling units?
The developer must provide the purchaser with a memorandum if there are 10 or more units in the syndicate. (See What documents is the developer obliged to provide to the buyer?)
What documents is the developer obliged to provide to the buyer?
None, if the syndicate has fewer than 10 units. If there are 10 or more units, the developer must give the purchaser a memorandum. A memorandum includes:
- the names of the architects, engineers, developers and promoters of the project;
- an overall plan of the development;
- the general development plan of the project and a summary of the descriptive specifications, where applicable;
- a preliminary budget that outlines common expenses, real estate taxes and contributions to the contingency fund;
- a description of the common elements;
- how the building will be managed; and
- the maximum number of fractions that are intended as rentals.
A copy or summary of the declaration of co-ownership, including the bylaws, must be appended to the memorandum even if they are draft documents.
What documents must a syndicate of co-owners provide a purchaser of a re-sale unit?
If the prospective purchaser requests a statement of the common expenses that are due for that particular fraction, the syndicate is authorized to provide it so long as the syndicate gives prior notice to the current owner or his successors.
Estimating Operating Costs
Are there legislation/regulations that stipulate what happens if a developer has inaccurately estimated the operational costs of a syndicate?
No.
Rules for Initial Reserve Fund Savings
Is the developer of a new syndicate obligated to put aside reserves as soon as the syndicate is registered?
Yes. Once the syndicate is registered, the developer becomes an owner and must contribute.
Governance Requirements
Does the Province require a syndicate of co-owners to impose any bylaws and rules?
No, the Civil Code of Quebec doesn’t require it but it does set out guidelines for establishing bylaws and rules.
Does syndicate legislation authorize the syndicate to borrow money?
No.
Can a syndicate of co-owners place a legal hypothec (similar to a lien outside of Quebec) on an individual unit?
Yes, it can if the co-owner has not paid his or her common expenses or contribution to the contingency fund for more than 30 days.
Elections & Meetings
What are the requirements for electing the board of directors and for its meetings?
Bylaws of individual syndicates outline details about the board of directors such as how its members are chosen, replaced and paid. If these details are not covered in the bylaws, the Superior Court can appoint or replace a director and fix his or her terms of appointment.
The board of directors must call a special meeting of co-owners to elect a new board when a developer no longer holds a majority of voting rights. It has 90 days to do this.
The annual meeting of co-owners must be called within six months after the close of the syndicate’s financial period.
Changing the Governing Documents
How does a syndicate change its governing documents?
The declaration of co-ownership has three parts, which can be changed as follows:
- Constituting act: requires the approval of a majority of co-owners representing 3/4 of the voting rights of all the co-owners;
- Description of fractions: requires the approval of a majority of co-owners representing 3/4 of the voting rights of all the co-owners; and
- Bylaws: requires a majority of votes cast.
Amendments to the constituting act and the description of fractions must be deposited in the Land Registry Office by a notary. Modifications to the bylaws must be added to the “register” of the syndicate (a register records the names and addresses of co-owners and lessees, meeting minutes and financial statements).
If the co-owners want to change the nature of the syndicate, such as converting it into a commercial building, approval of three-quarters of the co-owners representing 90 percent of the voting rights is required.
Making Payments
Can an owner stop paying syndicate fees if he/she is unhappy with the syndicate’s board of directors and/or property management?
No.
Rules About Special Assessments
Do provincial legislation/regulations have rules regarding special assessments? If so, what are they?
No.
Expanding the Scope of the Syndicate's Assets and Services
What about additional recreational facilities/services? Could a syndicate of co-owners buy a golf course, for example? Could it change the services an owner expects to receive?
Yes. A majority vote of the co-owners representing 3/4 of the voting rights of all the co-owners is required.
Other Important Things About Buying a Syndicate in Quebec
Do provincial legislation/regulations govern renting or leasing a fraction?
The syndicate’s declaration determines whether or not leasing is permitted. If it is, a co-owner who leases his or her unit must notify the syndicate and provide the name of the tenant, according to the Civil Code of Quebec. Tenants must comply with the syndicate’s bylaws.
For information on landlords’ and tenants’ rights and responsibilities in Quebec, see Your Guide to Renting a Home, Provincial Fact Sheet — Quebec.
What other constraints do provincial legislation/regulations put on syndicates of co-ownership, their boards of directors, bylaws and management?
If syndicates own buildings more than five stories high, building façades and multi-level parking facilities must be regularly inspected by professional members of the Ordre des Ingénieurs du Québec (OIQ) and any necessary repairs made. Building façades audit reports must be issued every five years, beginning on the 10th anniversary of the buildings’ construction, and maintained on-site. Please see Facades — Maintenance and Inspection for more information.
Is there a process for handling disputes or complaints?
This is governed by the syndicate’s declaration, rather than by the Civil Code of Quebec. In general, disputing parties can agree to take their dispute to arbitration.
Resources
Canadian Condominium Institute (CCI)
An independent
organization that deals exclusively with condominium issues and represents all
participants in the condominium community.
www.cci.ca/
