Divided co-ownership

Divided co-ownership

Divided co-ownership makes it possible to divide a building into several fractions. Each co-owner holds an exclusive right of ownership in their private portion, for example their dwelling unit, while also being a co-owner of the common portions of the building according to the relative value of their fraction.

The common portions include, in particular, the spaces intended for the collective use of the co-owners, such as the corridors, elevators, entrance halls, roof or foundations. Each co-owner holds an undivided share of these common portions.

The declaration of co-ownership may also provide for certain common portions for restricted use. Although they remain the property of all the co-owners, their use is reserved for one or more specific co-owners. This is the case, in particular, of certain balconies, terraces, parking spaces or storage spaces.

Acquiring a co-ownership property therefore involves not only the ownership of a private unit, but also participation in a community governed by the declaration of co-ownership, the administration of the syndicate of co-owners and the rules relating to the maintenance and preservation of the building.

Financing

Each co-owner generally finances the acquisition of their fraction by means of their own hypothecary loan. The hypothec granted to the creditor charges only the fraction belonging to the co-owner concerned.

Thus, the financial or hypothecary situation of one co-owner generally does not directly affect the title of ownership of the other co-owners. Each co-owner remains responsible for their own commitments towards their hypothecary creditor.

However, the co-owners remain collectively concerned by the administration, maintenance and preservation of the common portions of the building, in particular through the syndicate of co-owners and the common expenses to which they must contribute in accordance with their share.

Special precautions

Each divided co-ownership is governed by a declaration of co-ownership executed before a notary. Before committing to the acquisition of a unit, it is essential to read it and to understand the rights, obligations and restrictions it imposes on the co-owners.

A prudent buyer will also take an interest in the quality of the building’s administration, the financial health of the syndicate of co-owners, the state of the contingency fund and the history of expenses, common contributions and work carried out or planned.

Buying a co-ownership property is a significant investment. A prior review of the co-ownership documents often makes it possible to identify certain issues and to avoid surprises after the acquisition.

Before signing a promise to purchase or any other document, it is recommended that you consult your notary in order to obtain the necessary advice and to fully understand the legal and financial consequences of your acquisition.

Your rights and obligations

The declaration of co-ownership is the legal document that establishes the divided co-ownership and organizes the operation of the building. It divides the building into different fractions and determines the rights and obligations of each of the co-owners.

It comprises three main components:

• the constituting act of co-ownership, which establishes, in particular, the destination of the building, the relative value of each fraction and the apportionment of the common expenses;
• the by-laws of the immovable, which govern community life, the use of the private and common portions and the operating rules of the co-ownership;
• the description of the fractions, which identifies each of the fractions of the co-ownership and their composition.

The declaration of co-ownership is, in a sense, the “charter” of the building. It defines the rights, obligations and responsibilities of the co-owners, of the syndicate of co-owners and of the directors. It is therefore essential to read it before acquiring a unit in order to fully understand the rules that will apply to your investment and to your way of life.

The constituting act of co-ownership is one of the main parts of the declaration of co-ownership. It determines, in particular, the relative value of each of the fractions and the method used to establish it. This relative value is used to set each co-owner’s contribution to the common expenses and to the contingency fund of the syndicate of co-owners, as well as the number of votes the co-owner has at meetings of the co-owners.

The constituting act also specifies the destination of the building and of its various components. It indicates, in particular, whether the building is intended for residential, commercial or mixed use, as well as the uses permitted for the private portions and the common portions.

Finally, it establishes the main rules of governance of the co-ownership by defining the powers and responsibilities of the board of directors of the syndicate of co-owners and those of the meeting of the co-owners.

For a buyer, this document is particularly important since it makes it possible to understand not only the costs associated with the co-ownership, but also the rights, restrictions and obligations that will arise from the acquisition of the unit.

The by-laws of the immovable establish the rules relating to the use, enjoyment and maintenance of the private portions and the common portions. They specify, in particular, the rights and obligations of the co-owners as well as certain restrictions that may apply to the building. For example, they may regulate the presence of animals, the carrying on of professional activities at home or the use of the common spaces.

The by-laws also determine the operating rules of the co-ownership. They provide, in particular, for the composition of the board of directors, the eligibility requirements for directors, the procedure for holding meetings and various administrative rules necessary for the proper management of the building.

Before acquiring a co-ownership unit, it is important to become familiar with these rules, since they will have a direct impact on your use of the building and on your daily life as a co-owner.

The description of the fractions completes the declaration of co-ownership. It identifies each of the fractions of the building and specifies their cadastral designation, as well as that of the common portions.

It also contains certain information relating to the real rights affecting the building or granted in its favour, in particular certain servitudes, rights of use or other charges that may have an impact on the ownership and use of the fractions.

Although it is often consulted less than the constituting act or the by-laws of the immovable, the description of the fractions remains an important document since it makes it possible to determine precisely the extent of the rights attached to each co-ownership unit.

The syndicate and the meeting of co-owners

The syndicate of co-owners is constituted as soon as the divided co-ownership is created. Its mission is to ensure the preservation of the building, its maintenance and its administration, as well as the protection of the collective interests of the co-owners.

The syndicate acts, in particular, through its board of directors, whose members are responsible for the day-to-day management of the building. Among other things, they see to the maintenance of the common portions, the carrying out of the necessary work, the management of service contracts and compliance with the declaration of co-ownership.

The board of directors also prepares the annual budget of the co-ownership, determines the common expenses to be collected from the co-owners and sees to the administration of the contingency fund and of the other funds required by law.

For the buyer of a co-ownership property, it is therefore important to take an interest in the quality of the management exercised by the syndicate, in its financial situation and in the general condition of the building, since these elements will have a direct impact on future costs and on the value of the investment.

The meeting of the co-owners is the decision-making body of the co-ownership. It is called upon to decide on the matters that concern all the co-owners, in particular the administration of the building, the election of the directors, the approval of certain expenses or the carrying out of major work.

Each co-owner has a right to vote, the weight of which is generally determined according to the relative value of their fraction. The decisions of the meeting are made according to the rules provided by law and by the declaration of co-ownership.

Taking part in the meetings allows the co-owners to participate in the decisions that influence the management, maintenance, preservation and value of their investment.

Sale and hypothec

Each co-owner remains free to sell, give or hypothecate their fraction of the co-ownership. However, the declaration of co-ownership may provide for certain conditions or restrictions that may affect the exercise of these rights.

Before acquiring a unit, it is therefore important to carefully check the provisions of the declaration of co-ownership in order to know the rules applicable to the sale, the leasing, the alterations made to the unit or the exercise of certain specific rights.

A prior review of the declaration of co-ownership by your notary makes it possible to better understand the scope of these restrictions and to avoid certain surprises after the acquisition.