Following public consultations held in March, April and May of 2012, for which we filed a written submission and have made representations on 7 November, the Advisory Committee on co-ownership has filed its report with the Minister of Justice, Mr. Bertrand St-Arnaud, and the Board of Directors of the Chamber of Notaries of Quebec.
In addition to presenting an overview of the information gathered during the public consultations this report contains recommendations for legislative changes aimed at divided co-ownership in Quebec, which will be considered by the Minister of Justice and which will possibly give rise to legislative changes affecting co-ownership.
As this report contains almost one hundred and twenty recommendations we can not list them all in this article, but here is one from the Civil Code of Quebec:
The Committee recommends that the Government amend Section 1097 of the C.c.Q so that the majority would be seventy-five percent (75%) of the votes of the co-owners present or represented at the assembly, as appropriate, and not calculated anymore based on all the votes of the co-ownership.
The section in question is the one which currently imposes a majority in number of all the co-owners of the building who together hold at least 75% of all the votes of the co-owners of the building in order to determine the following matters:
1º The acts of acquisition or of alienation of real estate by the syndicate;
2º The works of transformation, expansion or improvement of the common portions, as well as the distribution of the cost of these works;
3º The construction of buildings to create new fractions;
4º Changing the constitutional deed of the co-ownership or the description of the fractions.
The Committee noted that for several co-ownerships there is a problem of lack of interest from the co-owners at the meetings of co-owners. While in general the quorum of a majority of the votes of the co-owners, present or represented, is reached there, the participation rates are often insufficient to achieve this double majority of section 1097 of the C.c.Q.
This section requires a double counting, i.e. a counting of the votes cast in favour of the decision and a count of people (co-owners) who have cast these votes. The Committee noted that this double counting is complex and requires not only a strong desire in the community, but also a very important participation in the meeting. In addition, an absence at the meeting without being represented there, an abstention or a vote against the adoption of the decision have the same effect because the majority is calculated based on all the votes and on all the co-owners of the co-ownership, and not according to the co-owners present or represented.
Consequently, the affairs of the co-ownership could be paralyzed by the failure to achieve the currently required majority for the modification of the common portions, or to change the constitutional deed of the declaration of co-ownership. The Committee noted that more than one meeting is often necessary for the adoption of the decision and the search for proxies is the only possible solution for the administrators and the manager. Obtaining this majority requires, therefore, systematically major efforts on the part of the leaders of the syndicate, and implies significant costs, and, sometimes, the leaders of the syndicate simply fail to succeed.
The Committee therefore recommends that the Government amend section 1097 of the C.c.Q, so that the majority would be seventy-five percent (75%) of the votes of the co-owners present or represented at the meeting, as appropriate, and not calculated anymore based on all the votes of the co-ownership.
We would like to emphasize to you that all the recommendations of this committee should be studied in detail by the Minister of Justice of Quebec, and that, if they are used, they should follow the usual path of any change in law before receiving final approval of the National Assembly for their entry into force.
We'll get back to you in a future article on other recommendations that we consider important for the co-ownership.
In the meantime, we invite you to contact our team of lawyers specialized in real-estate law for any questions about this subject.
In addition to presenting an overview of the information gathered during the public consultations this report contains recommendations for legislative changes aimed at divided co-ownership in Quebec, which will be considered by the Minister of Justice and which will possibly give rise to legislative changes affecting co-ownership.
As this report contains almost one hundred and twenty recommendations we can not list them all in this article, but here is one from the Civil Code of Quebec:
The Committee recommends that the Government amend Section 1097 of the C.c.Q so that the majority would be seventy-five percent (75%) of the votes of the co-owners present or represented at the assembly, as appropriate, and not calculated anymore based on all the votes of the co-ownership.
The section in question is the one which currently imposes a majority in number of all the co-owners of the building who together hold at least 75% of all the votes of the co-owners of the building in order to determine the following matters:
1º The acts of acquisition or of alienation of real estate by the syndicate;
2º The works of transformation, expansion or improvement of the common portions, as well as the distribution of the cost of these works;
3º The construction of buildings to create new fractions;
4º Changing the constitutional deed of the co-ownership or the description of the fractions.
The Committee noted that for several co-ownerships there is a problem of lack of interest from the co-owners at the meetings of co-owners. While in general the quorum of a majority of the votes of the co-owners, present or represented, is reached there, the participation rates are often insufficient to achieve this double majority of section 1097 of the C.c.Q.
This section requires a double counting, i.e. a counting of the votes cast in favour of the decision and a count of people (co-owners) who have cast these votes. The Committee noted that this double counting is complex and requires not only a strong desire in the community, but also a very important participation in the meeting. In addition, an absence at the meeting without being represented there, an abstention or a vote against the adoption of the decision have the same effect because the majority is calculated based on all the votes and on all the co-owners of the co-ownership, and not according to the co-owners present or represented.
Consequently, the affairs of the co-ownership could be paralyzed by the failure to achieve the currently required majority for the modification of the common portions, or to change the constitutional deed of the declaration of co-ownership. The Committee noted that more than one meeting is often necessary for the adoption of the decision and the search for proxies is the only possible solution for the administrators and the manager. Obtaining this majority requires, therefore, systematically major efforts on the part of the leaders of the syndicate, and implies significant costs, and, sometimes, the leaders of the syndicate simply fail to succeed.
The Committee therefore recommends that the Government amend section 1097 of the C.c.Q, so that the majority would be seventy-five percent (75%) of the votes of the co-owners present or represented at the meeting, as appropriate, and not calculated anymore based on all the votes of the co-ownership.
We would like to emphasize to you that all the recommendations of this committee should be studied in detail by the Minister of Justice of Quebec, and that, if they are used, they should follow the usual path of any change in law before receiving final approval of the National Assembly for their entry into force.
We'll get back to you in a future article on other recommendations that we consider important for the co-ownership.
In the meantime, we invite you to contact our team of lawyers specialized in real-estate law for any questions about this subject.