In divided co-ownership, several terms are used to designate the rules and measures to which co-owners, tenants and occupants are subject. These may include agreements (contracts and leases), building regulations or management rules.
If, a priorieach of these terms refers to measures that apply to co-owners (and tenants), they also designate different levels in the hierarchy of rules applicable in co-ownership. Clarification of these terms is therefore essential, as they determine the jurisdiction of the syndicate bodies - the general meeting and the board of directors - which can adopt them, as well as the majorities required for their adoption. The process to be followed so that they are enforceable against current and future co-owners also depends on them.
- DECLARATION OF CO-OWNERSHIP AND MANAGEMENT REGULATIONS
Since the coming into force of the new Civil Code of Quebec (hereinafter the "C. C. Q."), on 1st of January 1994, the declaration of co-ownership of a divided co-ownership immovable consists of three parts, namely (1) the act constituting the co-ownership; (2) the by-laws of the immovable; and (3) the descriptive statement of fractions[1].
- The deed of coownership contains, in particular, measures and rules of a more permanent nature and character, as well as those requiring a greater degree of protection of the individual and collective interests of the co-owners.
- The building bylaws contain rules governing the enjoyment, use and maintenance of private and common areas, as well as those relating to the operation and administration of the condominium.
- The description of fractions[2] contains the cadastral designation of the private and common portions of the building. The description of fractions also includes a description of the real rights encumbering or in favor of the building (e.g., servitudes), with the exception of additional mortgages and security interests that may be added during the life of the syndicate. As it does not include any agreements or by-laws, it is not the subject of this text.
Finally, the Civil Code of Quebec also provides that the Board of Directors may adopt[3]. This concept is not well defined, but it does exist so that the Board of Directors can adopt directives and establish rules for the management of its administration of the co-ownership.
- DEFINITIONS
- Deed of co-ownership
The constitution of a co-ownership is to co-ownership what the Constitution is to Canada. It contains the most important and fundamental provisions to which co-owners are bound, and just as the Canadian Constitution is more difficult to amend than an ordinary law, so too is the constitution.
It generally includes a section defining certain terms, a breakdown of the building into private and common portions (including restricted-use common portions) with their respective definitions and boundaries, the syndicate's assets, the purpose of the building, the private and common portions, the relative values of the fractions[4]the share of common expenses and the number of votes attached to each fraction, and the name of the syndicate.
The relative value of each fraction determines each co-owner's contribution to the common expenses[5], his share of the undivided common portions of the co-ownership and the number of votes attached to his fraction. However, co-owners who have the use of restricted common portions contribute alone to the expenses related to the maintenance and ongoing repairs of these portions. However, the declaration may also provide, for restricted-use common portions, for a different distribution of the co-owners' contribution to expenses relating to major repairs and replacement of these portions.
The act constituting the co-ownership also includes the respective powers and duties of the syndicate's bodies, and provides for any other agreements relating to the building or its private or common portions, including those that the developer sees fit to include, as well as the conditions for exercising the right of ownership in fractions. Since January 10, 2020, as a result of Law 16[6], the same applies to penalty clauses applicable in the event of a breach of the declaration of co-ownership[7].
The deed of co-ownership also contains provisions relating to insurance, as well as any mediation or arbitration clauses applicable between the syndicate, its administrators and co-owners (also known as an "arbitration clause").
The deed of co-ownership of the building can only be amended by the general meeting of co-owners, but in addition, the amendment can only be made by a decision taken by coowners representing at least three quarters of the votes of the co-owners present or represented at an annual or special general meeting[8].
If the modification affects or requires a change to the destination of the building (e.g. banning dogs or cats), a decision must be taken by a three-quarters majority of all coowners, representing 90% of the votes of all co-owners[9].
Once adopted by the required majority, the amendment to the deed of co-ownership must be notarized and submitted to the Land Registry Office (Bureau de la publicité fonciére[10] ), under the registration number of the common portions[11] in order to be enforceable against third parties, in particular future co-owners.
- Buildinq regulations
Generally speaking, the term "regulation" is defined as an administrative decision laying down a general rule (e.g., a decree or order) or, alternatively, as a set of rules or measures governing the operation of a group or organization (e.g., bylaws)[12] to which the members of a company, group, etc. are subject.[13]
The second part of the declaration of co-ownership, the building by-laws contain rules governing the enjoyment, use and maintenance of private and common areas.
Certain by-laws, although restricting the co-owners' right of ownership, are valid when justified by the destination of the immovable[14]. For example, by-laws imposing a reasonable minimum term for the rental of a fraction constitute a restriction on one of the attributes of the right of co-ownership (the right to collect the fruits of ownership), but one that is justified by the "residential", and not hotel, destination that the developer and/or coowners intended for their immovable[15].
These rules also apply to the maintenance of private areas (e.g., replacing the water heater at regular intervals) and common areas (e.g., cleaning accessible windows).
The building by-laws also contain the rules governing the operation and administration of the co-ownership. We are referring here to rules concerning the composition of the Board of Directors (for example, the number of directors), the method of appointment, replacement and remuneration of directors, as well as the conditions of their office (for example, whether or not they must be co-owners to be a director)[16].
Finally, the by-laws of the immovable generally deal with condominium owners' contributions to common expenses, i.e. the procedure for assessing and collecting contributions to common expenses. You may also find provisions relating to payment methods (cheque, pre-authorized payment, bank transfer, etc.) for contributions to common expenses, or late payment interest.
Unlike the first part of the declaration of co-ownership, the by-laws can be modified more easily. A decision taken by a majority vote of the co-owners present or represented at a meeting is sufficient[17]. Nor is it necessary to notarize the changes and present them to the Registre de la publicité fonciére. They must simply, but necessarily, appear expressly in the minutes of the co-owners' meeting or in a written resolution of the co-owners, and it is sufficient for them to be subsequently deposited in the register kept by the syndicate[18].
We would like to point out, however, that a decision taken by written resolution as provided for in Article 1096 C.C.Q. must be signed by all those entitled to vote in order to have the same value as if it had been adopted at a meeting[19].
- Management regulations
Management regulations are not part of the Declaration of Co-ownership. They are adopted in the margin of the Declaration by the Board of Directors, which then puts them into effect. They must, however, be ratified by the co-owners at the meeting following[20] and be deposited in the register of the syndicate.
Management bylaws are intended to address specific issues, or those of only passing interest[21]. All agree, however, that such by-laws cannot lay down rules governing the enjoyment, use and maintenance of private and common portions, or concerning the operation and administration of the co-ownership[22]. These rules are contained in the bylaws of the immovable, and can only be adopted by the general meeting of co-owners, not by the board of directors. The same applies to the rules governing the assessment and collection of contributions to common expenses[23].
Consequently, a management by-law must necessarily be reversible, given that it must be ratified by the general meeting of co-owners, and that its purpose or effect must never be to restrict the rights of co-owners[24].
By way of illustration, management by-laws include the by-law determining the opening and closing hours of the administration office, and the by-law determining where waste bins must be deposited by the syndicate. The same applies to self-imposed rules. For example, a management by-law relating to the duty of confidentiality that directors impose on themselves.
It's also questionable whether a by-law determines the opening and closing hours of a swimming pool or fitness room. Isn't this a restriction on the right of co-owners to use these common areas? In our opinion, this is a matter for the building by-laws and cannot be the subject of a simple management by-law.
In any case, these management regulations are adopted by the Board of Directors by a majority of votes of the directors[25].
Unlike articles 1096 and 1097 C.c.Q., which apply to the general meeting of co-owners, this is not a majority of the directors present, but a majority of the votes of all the directors. Indeed, a director who is absent from a meeting is presumed not to have approved the decisions taken at that meeting[26].
However, this rule regarding the majority of directors' votes is not imperative, and the declaration of co-ownership could, in its by-laws for the immovable, under the operating mode of the Board of Directors, provide otherwise and stipulate, for example, that the president of the Board of Directors has a casting vote in the event of a tie (a fairly rare occurrence, however); or other majorities provided for, as the new article 1086.3 C.c.Q. suggests?[27].
IN CONCLUSION
The principles of co-ownership are enshrined in the act constituting the co-ownership, while the procedures for exercising these principles are set out in the building by-laws. Management regulations are not part of these principles and procedures. They are more a matter of "internal management".
Depending on the importance of the provisions they contain, the majorities required to adopt or amend them are more or less high, and the procedure for applying them complex.
Divided co-ownership is not a democracy. It is part of a "micro-society" where the same principles of hierarchy of norms apply as those of laws, with the necessary adaptations.
[1] Art. 1052 C.c.Q.
[2] Art. 1055 C.c.Q.
[3] Art. 335 C.c.Q.
[4] Art. 1041 C.c.Q.
[5] Art. 1064 C.c.Q.
[6] Loi visant principalement l’encadrement des inspections en bâtiment et de la copropriété divise, le remplacement de la dénomination de la Régie du logement et l’amélioration de ses règles de fonctionnement et modifiant la Loi sur la Société d’habitation du Québec et diverses dispositions législatives concernant le domaine municipal.
[7] Art. 1053 C.c.Q.
[8] Art.1097 (2) C.c.Q.
[9] Art.1098 (1) C.c.Q.
[10] Art. 1059 C.c.Q.
[11] Art. 1060 C.c.Q.
[12] Dictionnaire « Le Robert ».
[13] Dictionnaire « Larousse ».
[14] Art. 1056 C.c.Q.
[15] Kilzi c. Syndicat des Co-propriétaires du 10 400 Boul. L’Acadie, 2001 CanLII 10061 (QC CA), 2001 CanLII 10061 (QC C.A.).
[16] Art. 1084 C.c.Q.
[17] Art. 1096 C.c.Q.
[18] Art. 1060 C.c.Q.
[19] Art. 354 C.c.Q.
[20] Art. 335 C.c.Q.
[21] Christine Gagnon, op.cit., p.198.
[22] Christine Gagnon, op.cit.
[23] Yves Papineau, « Les copropriétaires et l’administration en copropriété divise », Service de la formation continue du Barreau du Québec, vol. 341, Développements récents en droit de la copropriété divise, Montréal, Éditions Yvon Blais, 2011, p.65, 77-78.
[24] Maxime Laflamme-Leblond, Les restrictions aux droits des copropriétaires et leurs limites, Service de la formation continue du Barreau du Québec, Développements récents en droit de la copropriété divise, Montréal, Éditions Yvon Blais, 2018, P.187.
[25] Art. 336 C.c.Q.
[26] Art. 337 C.c.Q.
[27] Christine Gagnon, La copropriété divise, 5e éd., 2020, Éditions Yvon Blais, p.644, 857.
