Articles 1068.1 and 1068.2 of the Civil Code of Quebec

Greater protection for buyers

Two new provisions stemming from Bill 16, which was adopted in December 2019, will modify the parameters related to divided co-ownership transactions.

First, article 1068.1 of the Civil Code of Québec will eventually make the sale of a fraction subject to the delivery of an attestation on the state of a co-ownership.

In this context, Condoliaison wanted to know what Claudie Tremblay, Executive Vice-President, Corporate Affairs at the OACIQ (Organisme d'autoréglementation du courtage immobilier du Québec) thinks. The OACIQ's mission is to ensure public protection for those who use real estate brokerage services "governed by law".

GOVERNMENT REGULATION

But before it can come into force, article 1068.1 must be adopted by government regulation. It reads as follows: "A person who sells a fraction must, in due course, provide the purchaser with an attestation from the syndicate on the state of the co-ownership, the form and content of which are determined by government regulation.

"This article is new law. It will undoubtedly correct a situation that very often placed a promisor-buyer in a delicate position, namely that he did not always have the relevant information to enable him to give free and informed consent," says Claudie Tremblay. She reminds us that buying a property is a major transaction, if not the most important one a consumer will make in his or her lifetime. Consequently, as a regulator whose primary mission is to protect the public, the OACIQ is pleased with this measure.

MAKING THE RIGHT DECISION

There is a great deal of information that can be essential in a transaction, to help buyers make the right choice. For example, if a judgment has been rendered against a syndicate, this attestation would indicate whether the judgment is pending execution, and whether it could have significant financial repercussions for the buyer. In addition, information on unpaid common expenses (condo fees), the status of the contingency fund - whether it is sufficient or not - or possible future special assessments is also essential for a prospective buyer.

"Although article 1068.1 stipulates that the seller must provide an attestation from the syndicate on the condition of the co-ownership, it remains to be seen what the content, form and terms of this attestation will be," adds Claudie Tremblay. Once these parameters are known, we'll be able to assess the impact.

ARTICLE 1068.2

As for the new article 1068.2 of the Civil Code of Quebec, which has been in force since January 10, 2020, it has also been well received by the OACIQ. Among other things, this article stipulates the following: "A person who promises to purchase a fraction may ask the syndicate to provide him with documents or information concerning the immovable and the syndicate that will enable him to give informed consent. The syndicate is obliged, subject to the provisions relating to the protection of privacy, to provide them diligently to the promisor-buyer, at the latter's expense."

A syndicate must therefore react when a promisor-buyer asks for information. The lack of up-to-date, adequate and timely information is one of the main issues in a transaction," confirms Claudie Tremblay. That said, we'll be in a position to assess the scope of article 1068.2 in practice, i.e. whether it produces the desired effects for a consumer." How diligent will these requests be? And will the cost of producing the required documents be so prohibitive as to discourage a potential buyer, who now has every right to obtain a copy? On this question, the OACIQ believes there is much to ponder.

ACTION PLAN

That said, the OACIQ has put in place a condominium action plan that includes a series of past and future initiatives. These not only inform consumers, but also provide real estate brokers with the tools they need to do their job properly. These tools include a guide, a checklist and standard clauses (https://synbad.com/fr). The OACIQ will shortly be announcing the new provisions of article 1068.1, and when they come into force.

The OACIQ reminds us that real estate brokers working in the residential sector must take mandatory training by April 30. Entitled Enjeux de la copropriété divise résidentielle et responsabilités du courtier immobilier, it covers new developments in the collection of basic data, including that relating to the financial health of a syndicate of co-owners.

Condoliaison Vol.22 No1