Co-ownership, written by Me Sevgi Kelci
A choice to make: ownership or co-ownership?
Buying a first property can raise questions for those who wish to become owners. Which form of ownership to choose: individual ownership or co-ownership? Each has clear advantages, but how do you arrive at the right decision? This article suggests a way of thinking for those who want to make the right choice when buying a property.
First, one element to consider is the management of the building. If the prospective buyer wishes to invest their time in managing the building, individual ownership is strongly recommended. For example, whoever buys a duplex or a single-family house must, personally or through someone whose services they retain, ensure the maintenance, preservation and administration of the building. This can require time and energy, not to mention all the related costs, especially when major repairs are needed. Conversely, if the prospective buyer prefers to leave the management of the building to a manager, co-ownership is the better choice. In that case, the building is managed by the syndicate, a body created as soon as the co-ownership is constituted (through the publication of the declaration of co-ownership), whose role is to see to the maintenance, preservation and administration of the building. The board of directors acts for the syndicate. The directors make the decisions that affect all the co-owners, including setting the co-ownership budget. These decisions are ratified by the co-owners, who vote according to their number of votes at a meeting of co-owners.
Second, another element to consider is the degree of freedom the prospective buyer wishes to enjoy. With a single-family house or a duplex, for example, the owner has full enjoyment of their rights, subject to the rules of good neighbourliness. They can decide to barbecue in the backyard or install a satellite dish on the front wall of the building. Conversely, in a condominium, the co-owner is governed by a set of rules that considerably restrict their freedom to enjoy the benefits of their property. These by-laws are justified by the collective interest, which prevails over the private interest of a co-owner. Since several co-owners share the common portion of the building, it becomes essential to put in place a framework governing their daily life. For example, the by-laws of the building may prohibit co-owners from barbecuing on the balcony for safety reasons, or prohibit them from keeping animals in their unit.
Third, a final criterion to consider is financing. The initial down payment is larger for a single-family house or a duplex than for a condominium. At present, it is possible to buy a condominium with an initial down payment of only one thousand dollars ($1,000.00). The balance of the sale price is often financed by one of the financial institutions that agrees to grant the requested loan to the prospective buyer, on condition of holding a first-ranking hypothec on the private portion of the building corresponding to the unit. This is precisely one of the reasons that leads some people to choose a condominium instead of a duplex.
In short, buying a property does not happen overnight. It rests on careful reflection based on several elements, including the management of the building, the degree of freedom the buyer wishes to enjoy in the property, and financing. Taking these three elements into account leads to the following observations. The prospective buyer who wishes to manage the building, to enjoy greater freedom with respect to the property, and who has accumulated a certain sum of money over a lifetime should opt for a single-family house, a duplex, and so on, that is, for individual ownership. The prospective buyer who does not want to manage the building, who accepts living “collectively” with restricted freedom and who does not have considerable savings from the outset should instead opt for a condominium, that is, for co-ownership.