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Fraction of Co-Ownership (Condo / Shares) – Definition

Written by Me Sébastien Fiset , LL.B., B.A.A.
Mardi, 14 Septembre 2010 11:28

FRACTION OF CO-OWNERSHIP – DEFINITION

Contact the author :  s.fiset@fisetlegal.com

GENERAL

When you purchase a unit in a condominium building which is designated a co-ownership, it is not only the actual « apartment » which you purchase but rather a fraction of the co-ownership, which consists of one or several private portions (the unit, storage, parking, etc.) as well as an undivided portion of the total of the common portions of the immovable itself.

According to the terms of article 1038 of the Civil Code of Québec (“C.c.Q.”):

« Divided co-ownership of an immovable is established by publication of a declaration under which ownership of the immovable is divided into fractions belonging to one or several persons. »

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One can also read in article 1046 C.c.Q. that:

Each co-owner has an undivided right of ownership in the common portions. His share of the common portions is proportionate to the relative value of his fraction. »

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According to the terms of article 1047 C.c.Q.:

« Each fraction constitutes a distinct entity and may be alienated in whole or in part; the alienation includes, in each case, the share of the common portions appurtenant to the fraction, as well as the right to use the common portions for restricted use, where applicable. »

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In addition, article 1069 C.c.Q.:

« A person who acquires a fraction of divided co-ownership, by whatever means, including the exercise of a hypothecary right, is bound to pay all common expenses due in respect of that fraction at the time of the acquisition.

A person contemplating the acquisition of such a fraction may request from the syndicate of co-owners a statement of the common expenses due in respect of the fraction and the syndicate is thereupon authorized to provide the statement to him, provided the syndicate gives prior notice to the owner of the fraction or his successors; in such a case, the prospective acquirer is only bound to pay the common expenses if the statement is provided to him by the syndicate within 15 days of the request.

The statement given to the buyer is adjusted to the last annual budget of the co-owners. »

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DIVISION OF YOUR RIGHTS IN THE IMMOVABLE

Your fraction is comprised of:

  1. The rights you maintain in your unit of the building and its private accessories, your private portion(s)(right/exclusive usage)
  2. One share of the common portions of the building (right of undivided and shared property)
  3. And, in certain cases, exclusive rights in certain common portions for restricted use which have been allocated to you (right of undivided and shared property/exclusive usage).

The private and common portions of a fraction are inseparable:

In fact, article 1048 C.c.Q. :

« The share of the common portions appurtenant to a fraction may not, separately from the private portion of the fraction, be the object of alienation or an action in partition. »

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Private portions:

According to the terms of article 1042 C.c.Q.:

« Those portions of the buildings and land that are the property of a specific co-owner and that are for his use alone are called the private portions. »

Common portions:

According to article 1043 C.c.Q.:

« Those portions of the buildings and land that are owned by all the co-owners and serve for their common use are called the common portions.

(…). »

And article 1044 C.c.Q. continues:

« The following are presumed to be common portions: the ground, yards, verandas or balconies, parks and gardens, access ways, stairways and elevators, passageways and halls, common service areas, parking and storage areas, basements, foundations and main walls of buildings, and common equipment and apparatus, such as the central heating and air-conditioning systems and the piping and wiring, including what crosses private portions. »

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Beware ! : This is a simple assumption if nothing is mentioned in the declaration of co-ownership and the cadastral plan of the building.

Common portions for restricted use:

According to the terms of article 1043 C.c.Q.:

« Those portions of the buildings and land that are owned by all the co-owners and serve for their common use are called the common portions.

Some of these portions may nevertheless serve for the use of only one or several of the co-owners. The rules regarding the common portions apply to these common portions for restricted use. »

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VOTING RIGHTS AND ASSESSMENTS FOR COMMON EXPENSES

The undivided co-owners of a fraction are assigned a voting right in proportion to their undivided shares (%) of the total fraction of the co-ownership.  If one is absent and he has not given his proxy to the other, he cannot vote for the other.  He may only vote for his portion of the undivided shares.  Unless otherwise indicated in the act of sale, two (2) undivided co-owners of a fraction of co-ownership will each vote for 50% of its relative value (article 1090 C.c.Q.).

This fraction will also be used to calculate your proportion (%) of the contributions to the common expenses (condominium fees).

After determining the amounts necessary to meet the annual expenses resulting from the operation of the immovable, the board of directors will set your contribution according to the relative value of your fraction, thus ensuring a fair distribution of the fees according to your rights of co-ownership (articles 1064 and 1072 C.c.Q.).

If you have exclusive rights for certain common portions of the building, referred to as common portions for restricted use, on the one hand, you alone should assume the resulting costs for maintenance and minor repairs.  Unless otherwise indicated in the Declaration of Co-ownership and accounted for in the budget, the syndicate will assume, on the other hand, the costs for major repairs and for replacement of the common portions for restricted use (articles 1071 and 1072 C.c.Q.).

In fact it is stated in article 1064 C.c.Q.:

« Each co-owner contributes in proportion to the relative value of his fraction to the expenses arising from the co-ownership and from the operation of the immovable and the contingency fund established under article 1071, althoughonly the co-owners who use common portions for restricted use contribute to the costs resulting from those portions. »

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It is also stated in articles 1071 and 1072 of the Civil Code of Québec, that:

1071. « The syndicate establishes, according to the estimated cost of major repairs and the cost of replacement of common portions, a contingency fund to provide cash funds on a short-term basis allocated exclusively to such repairs and replacement. The syndicate is the owner of the fund. »

1072. « Each year, the board of directors, after consultation with the general meeting of the co-owners, fixes their contribution for common expenses, after determining the sums required to meet the expenses arising from the co-ownership and the operation of the immovable, and the amounts to be paid into the contingency fund.

The contribution of the co-owners to the contingency fund is at least 5% of their contribution for common expenses. In fixing the contribution, the rights of any co-owner in the common portions for restricted use may be taken into account.

The syndicate, without delay, notifies each co-owner of the amount of his contribution and the date when it is payable. »

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ESTABLISHING RELATIVE VALUES OF FRACTIONS AND THEIR DESCRIPTIONS

Your fraction of co-ownership is determined by taking into account the private portions which you own, in relation to the total immovable.  This corresponds to your share of the common expenses to be assumed.  This fraction also determines the number of votes you will have during a meeting of co-owners.

Article 1064 C.c.Q.:

Each co-owner contributes in proportion to the relative value of his fraction to the expenses arising from the co-ownership and from the operation of the immovable and the contingency fund established under article 1071, although only the co-owners who use common portions for restricted use contribute to the costs resulting from those portions. »

Article 1090 C.c.Q.:

« Each co-owner is entitled to a number of votes at a general meeting proportionate to the relative value of his fraction. The undivided co-owners of a fraction vote in proportion to their undivided shares. »

Article 349 C.c.Q.:

The proceedings of the general meeting are invalid unless a majority of the members qualified to vote are present or represented. »

The relative value of each fraction is established according to the terms of article 1041 of the Civil Code of Québec and is recorded in a chart in the Constituting act of the Declaration of Co-ownership.

The following items are considered in establishing the relative values:

Article 1041 C.c.Q.:

« The relative value of each of the fractions of a divided co-ownership with reference to the value of all the fractions together is determined in consideration of the nature, destination, dimensions and location of the private portion of each fraction, but not of its use. »

In article 1053 of the Civil Code of Québec, it is decreed:

« A constituting act of co-ownership defines the destination of the immovable, of the exclusive parts and of the common parts.

The act also specifies the relative value of each fraction, indicating how that value was determined, the share of the expenses and the number of votes attached to each fraction and provides any other agreement regarding the immovable or its private or common portions. In addition, it specifies the powers and duties of the board of directors of the syndicate and of the general meeting of the co-owners. »

Finally, each fraction of co-ownership will be outlined in great detail in the third section of your Declaration of Co-ownership (Description of the fractions):

1055. « A description of the fractions contains the cadastral description of the private portions and common portions of the immovable.

Such a description also contains a description of the real rights affecting or existing in favour of the immovable other than hypothecs, and additional security accessory thereto. »

We hope these explanations will help you to better determine just what a fraction of a co-ownership is.

 

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.

 

Mise à jour le Samedi, 16 Août 2014 17:22

Me Sébastien Fiset
Me Sébastien Fiset
https://fisetlegal.com