What you need to know before buying a co-ownership property
Co-ownership has many appeals, including affordable cost and reduced maintenance. But this type of housing also has its constraints. Here is an overview of things to consider before buying a co-ownership property, your real estate broker’s professional duties and ethical obligations under the Real Estate Brokerage Act, and your recourses in case of problem.
Verifications and duties of the broker
Did you know that buying a co-ownership property means accepting to be bound by a declaration of co-ownership, which defines the rules of common living and administration for the building? It is a contract that binds all co-owners. It is therefore important to read it before you buy. The declaration of co-ownership contains three parts:
- The constituting act of co-ownership (which sets out the division of powers between the board of directors and the assembly of co-owners; the number of votes of each co-owner, etc.);
- The by-laws of the immovable (rules of living for co-owners and occupants, method for appointing directors, etc.);
- The description of the fractions (technical details including a list of private areas).
For more information on the declaration of co-ownership, visit the lacopropriété.info website.
Under the Real Estate Brokerage Act, and in accordance with his advisory duties, your broker must help you obtain this essential information. He must make sure that you have reviewed these documents, and provide guidance so you can make an informed decision before you go ahead with the purchase. Your broker’s advice will vary depending on the type of co-ownership property involved, i.e. divided or undivided.
Concerning the barbecue ban on balconies, for example, your broker has a duty to help you obtain the property’s by-laws, which contain the information concerning barbecues.
To ensure that your transaction involving a co-ownership property is carried out in accordance with the requirements of the Real Estate Brokerage Act, the OACIQ has custom-designed a number of forms suited to most situations. The Promise to purchase, for example, includes conditions such as the review of documents, which are different according to the type of co-ownership property.
Among the forms used by authorized professionals in transactions involving co-ownership properties, the form Request for information to the syndicate of co-owners was designed especially to help you obtain important information regarding the co-ownership property under consideration, and answers to questions such as: what is the amount in the contingency fund? Is a deficit projected for the current year? Has a special assessment been voted, which will be payable by each co-owner?
Although the use of this form is not mandatory, it is strongly recommended. If it was completed by the syndicate of co-owners and is available, it must be submitted to you for review. In the event that you or your broker are unable to review this documentation before you draft your promise to purchase, your broker will have to complete clause 9.1 of the promise to purchase to make it conditional upon a review of the documents by you, the buyer, to your entire satisfaction.