| Written by Me Sébastien Fiset , LL.B., B.A.A. |
| Lundi, 21 Février 2011 13:50 |
VOTING AT THE GENERAL ASSEMBLY OF CO-OWNERS – MAJORITIES REQUIRED
Contact the author : s.fiset@fisetlegal.com
The general assembly of co-owners constitutes a decision making body, at which, in their role as co-owners and through the exercise of their voting rights, these persons participate in making the collective decisions of the co-ownership.
Under the terms of the Civil Code of Québec and the declaration of co-ownership, specific provisions are outlined concerning voting at a general meeting.
It is important that the required majorities are respected during votes taken at the general meeting of co-owners; if not, there is a risk that resultant decisions may be nullified by the Court during legal proceedings.
In co-ownership, when taking decisions, the breakdown of votes may prove very complex: certain decisions necessitate obtaining the majority of the number of votes held by each co-owner according to the relative value of his fraction, others require three quarters (3/4) or even ninety (90%) of all the votes (cumulated with a majority of all the co-owners themselves or sometimes three quarters (3/4) of these).
Article 1090 of the Civil Code of Québec states that each co-owner holds a number of votes which corresponds to the relative value of his fraction and co-owners of the same fraction exercise their right to vote according to their share in the co-ownership.
When it comes to certain votes, the Civil Code of Québec also imposes specific reductions of votes to co-owners and to the promoter which one must take into account:
CO-OWNERS :
- Article 1091 C.c.Q. :
« Where, in a co-ownership comprising fewer than five fractions, a co-owner is entitled to more than 1/2 of all the votes available to the co-owners, the number of votes to which he is entitled at a meeting is reduced to the total number of votes to which the other co-owners present or represented at the meeting are entitled. »
PROMOTER / DEVELOPER :
Article 1092 C.c.Q. :
« No promoter of a co-ownership comprising five or more fractions is entitled, in addition to the voting rights attached to the fraction serving as his residence, to over 60% of all the votes of the co-owners at the end of the second and third years after the date of registration of the declaration of co-ownership.
The limit is subsequently reduced to 25%. »
Article 1093 C.c.Q. :
« Any person who, at the time of registration of a declaration of co-ownership, owns at least 1/2 of all the fractions, or his successors, other than a person who in good faith acquires a fraction for a price equal to its market value with the intention of inhabiting it, is considered to be a promoter. »
[Underlined added]
Article 1099 C.c.Q. :
« Where the number of votes available to a co-owner or a promoter is reduced by the effect of this section, the total number of votes that may be cast by all the co-owners to decide a question requiring a majority in number and votes is reduced by the same number. »
It is also stipulated in article 1094 of the Civil Code of Québec that a co-owner who has not paid his common expenses and/or contributions to the reserve fund for over three (3) months is deprived of his right to vote.
Let us now take a look at the different majorities required and their application :
REQUIREMENT : SIMPLE MAJORITY
In general, decisions are taken according to the majority of votes of the co-owners present or represented (decisions on the administration (in the scope of the general meeting) as set out in the declaration of co-ownership, modifications and amendments to the by-laws, election of the directors, clerical error, etc).
Article 1096 C.c.Q. :
« Decisions of the syndicate, including a decision to correct a clerical error in the declaration of co-ownership, are taken by a majority of the co-owners present or represented at the meeting. »
However, for specific topics having more serious repercussions on the co-owners and the co-ownership, qualified majorities are called for:
REQUIREMENT : DOUBLE MAJORITY
Article 1097 C.c.Q.:
« Decisions respecting the following matters require a majority vote of the co-owners representing 3/4 of the voting rights of all the co-owners:
1° acts of acquisition or alienation of immovables by the syndicate;
2° work for the alteration, enlargement or improvement of the common portions, and the apportionment of its cost;
3° the construction of buildings for the creation of new fractions;
4° the amendment of the constituting act of co-ownership or of the description of the fractions. »
REQUIREMENT : DOUBLE SPECIAL OR EXTRAORDINARY MAJORITY
Article 1098 C.c.Q. :
« Decisions on the following matters require a majority vote of 3/4 of the co-owners representing 90% of the voting rights of all the co-owners:
1° to change the destination of the immovable;
2° to authorize the alienation of common portions the retention of which is necessary to the destination of the immovable;
3° to amend the declaration of co-ownership in order to permit the holding of a fraction by several persons having a right of periodical and successive enjoyment. »
Article 1108 C.c.Q. :
« Co-ownership of an immovable may be terminated by a decision of a majority of 3/4 of the co-owners representing 90% of the voting rights of all the co-owners.
The decision to terminate the co-ownership shall be recorded in writing and signed by the syndicate and the persons holding hypothecs on the immovable or part thereof. This decision is entered in the land register under the registration numbers of the common portions and private portions. »
Beware: Decisions falling under the terms of article 1097 C.c.Q. may also be affected by article 1098 C.c.Q. should these decisions affect the « destination of the immovable ».[1]
REQUIREMENT : UNANIMOUS AGREEMENT
In the event that a decision would modify the relative value of a fraction, its destination or its usage, the co-owner of said fraction should give his approval beforehand. In addition, if the application of such action has an effect on other fractions belonging to other co-owners, they must also give their approval; if it involves a general application affecting the relative value, the destination or the usage of all the private portions, it would require a unanimous agreement.
In fact, under the terms of article 1102 C.c.Q. :
« Any decision of the syndicate which, contrary to the declaration of co-ownership, imposes on a co-owner a change in the relative value of his fraction, a change of destination of his private portion or a change in the use he may make of it is without effect. »
We have outlined in broad terms the specific provisions for voting at the general meeting. This text complements the text « Running a Meeting of Co-owners ». As each case is unique and it is impossible to cover them all here, we invite you, if need be, to consult a professional who specializes in the practice of co-ownership law to determine your rights and obligations with regards to general meetings of co-owners, specific to your situation.
The information provided on this page is general in nature and cannot compensate for the need to obtain legal advice specific to a particular situation.
[1] See our text on « Destination of the immovable » (part I and part II).
Mise à jour le Samedi, 16 Août 2014 16:50