Renting Your Condo: A Decision That Requires Prudence
|Écrit par Me Sébastien Fiset , LL.B., B.A.A.|
|Mardi, 23 Février 2010 15:50|
LEASING YOUR CONDOMINIUM: A DECISION THAT REQUIRES PRUDENCE
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The rental of dwellings in an immovable in divided co-ownership is common in Quebec. Nevertheless, this is a delicate operation, requiring several measures of precaution and should never be done blindly. A situation where a landlord or tenant does not comply with the by-laws of the immovable can transform the rental into a very unpleasant experience. It is not about conducting a campaign of fear, our purpose being to prevent rather than repair.
A LAW IS A LAW
On the one hand, a fraction of co-ownership (dwelling unit, storage space and / or parking space), as a private property, can be rented by its owner. In accordance with the law, unless it is expressly contrary to the destination of the immovable – and even here a doubt in this regard persists – a syndicate of co-ownership cannot deny the right to a co-owner to rent his fraction.
Moreover, under article 1893 of the Civil Code of Québec (C.C.Q.), the condominium tenants have the same inalienable rights as they do in an apartment building. In these cases, the Rental Board of Québec is the appropriate judicial forum.
Still, tenants cannot act as they see fit. Like owners, they must abide by the rules imposed by the by-laws of the building of the declaration of co-ownership.
If the by-laws of the immovable stipulates, for example, the prohibition of letting strollers and boots on the corridor’s floor, tenants will be required to comply.
For his part the co-owner-landlord has a duty to inform the syndicate of the rental of his unit and the name of his tenants (1065 C.C.Q.).
The co-owner-landlord shall also give the tenant or the occupant of the unit a copy of the by-laws and the amendments to them. Until the by-laws and amendments are not remitted to the tenants, they are not set up against them (1057 C.C.Q). The syndicate of co-ownership can also distribute them to the tenants.
An ill-advised syndicate can be the cause of various conflicts with the tenants.
Such a case applies, among other things, in terms of building maintenance. During construction work requiring his access or his eviction from the dwelling unit (private portion), the tenant must be notified at least twenty-four (24) hours in advance (1931 C.C.Q.). If it is necessary for the lessee to vacate temporarily, the syndicate must pay him a reasonable compensation to cover the expenses arising from it (1922 C.C.Q).
Similarly, the discriminatory selection by a syndicate of tenants of a co-owner is unlawful. A syndicate’s requirement to meet them before giving them access or not to lease a co-owner’s dwelling, would in our opinion be an act of interference in the patrimony of the co-owner-landlord, which is forbidden by law.
THE CONSEQUENCES OF OFFENDING THE LAW
The consequences of not respecting the declaration of co-ownership by a tenant are important. Article 1079 C.C.Q. provides that “the syndicate may demand the resiliation of the lease of a private portion, after notifying the lessor and the lessee, where the non-performance of an obligation by the lessee causes serious prejudice to a co-owner or to another occupant of the immovable.” It could be, for example, for using the private portion by the lessee for business purposes prohibited by the declaration of co-ownership or by the destination of the immovable, or the excessive and improper usage of the dwelling (music, excessive and repetitive noise).
In case of refusal of the co-owner-landlord to comply with the declaration of co-ownership, an injunction may also be taken against the co-owner-landlord and his tenant. Should the co-owner-landlord violate the injunction or refuse to abide by its terms, the court may order the sale of his fraction (1080 C.C.Q).
Finally, if the constituting act of the declaration of co-ownership allows it and if the building’s by-laws establish it, the court may also order a co-owner-lessor and / or the tenant to pay a penalty. If nothing is scheduled, an amendment to the declaration of co-ownership may be considered. A syndicate willing to proceed with this amendment should consult its legal advisor.
RASING THE STANDARDS OF ELIGIBILITY
While a syndicate of co-ownership cannot prevent the rental of dwellings in the immovable, it can restrict the right to rent or submit it to certain conditions, without actually denying it. To be legally valid, such restrictions on the rights of co-owners should still be justified by the destination of the immovable, its characteristics or location (1056 C.C.Q).
One way of doing this is, among other things, to modify or add provisions to the by-laws of the building or to the constituting act of the declaration of co-ownership. However, these provisions must have made the object of a vote at the general meeting of co-owners requiring:
- A majority of voices of co-owners (1096 C.C.Q.), for amendments made to the by-laws of the building;
- A qualified majority in number and in voices, for :
- modifications of the constituting act (requiring 50% of the co-owners, representing 75% of the voices of all the co-owners – 1097 C.C.Q.);
- modifications to the destination of the immovable (requiring 75% of the co-owners, representing 90% of the voices of all the co-owners – 1098 C.C.Q.);
- Unanimity for any decision of the syndicate of co-ownership which, contrary to the declaration of co-ownership, imposes on a co-owner a change in the relative value of his fraction, the destination of his private portion or the use he may make of it (1102 C.C.Q.).
While modifying the by-laws of the immovable requires only the ratification by the general meeting (335 paragraph 2, 1054 and 1096 C.C.Q.) to be filed with the syndicate, the modifications performed under sections 1097, 1098 and 1102 CCQ require the registration of a notarised deed at the Land Registry Office (1060 C.C.Q.).
The most common modifications are: the taxation of a deposit or monitoring fees. Such regulations usually aim at repairing the damages caused to common portions, at preventing the monopolisation of an elevator and at ensuring the security of the premises against going back and forth inappropriately. This happens especially when somebody moves in or out.
HOUSING AND INSURANCE IN A CONDOMINIUM
The syndicate has an insurable interest in the whole immovable, including the private portions. The syndicate must take insurance against common risks such as fire and theft, covering the entire immovable, except improvements made by a co-owner to his private portion. The amount of insured is equal to the replacement cost of the immovable (1073 C.C.Q.).
However, the tenant not being covered by the syndicate’s insurance against the damage caused to his property and against the damage that can be made to the building, to the co-owners or to others, should insure his civil responsibility and his assets.
Notwithstanding the foregoing, under the declaration of co-ownership of his building, the co-owner-landlord is usually obliged to ensure his civil responsibility and the improvements he has made to his unit. The co-owner-landlord must always take out such insurance because renting his apartment to a tenant does not limit his duty to honour his contractual obligation.
Even in the absence of such a clause, the co-owner-landlord should ensure the improvements made to his unit because the tenant does not have the benefit of insurance required to do so. It would also be prudent for the co-owner-landlord to take out liability insurance against the unfortunate actions that the tenant could cause (breakage, water damage, etc.).
One of the best ways to avoid complications caused by offending tenants or at least to limit them is to remain vigilant.
In this sense, strictly ensure that the building’s by-laws are respected and deploy, without hesitation, coercive measures if necessary in order to maintain a certain serenity.
When things are clear and when the margin of error of delinquents is at zero, the risks of disorder and lawlessness are reduced.
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 17:44