You've finally found your dream condo. Before you buy, be sure to carefully review the declaration of co-ownership. Here's what you need to know to understand how it will affect your day-to-day life and your budget.
A declaration of co-ownership, also known as a condominium declaration, is a legal document that regulates the use and management of a divided co-ownership property. It sets out your rights and obligations with respect to the building and the portion of common expenses that you will be responsible for.
This is an important question: A declaration of co-ownership is not required for undivided condos. However, it is still recommended to adopt an undivided co-ownership agreement that officially sets out exclusive property rights and uses, as well as the rules and terms and conditions governing how the property is administered.
→ For more information, check out our article: “Divided co-ownership and undivided co-ownership: Key differences.”
What's included in a declaration of co-ownership or condominium declaration and how it will be administered depends on the laws of the province or territory the building is located in.
Good to know: The terms used to designate the declaration of co-ownership and the different types of buildings may change from place to place. Co-ownership properties can also be referred to as "strata" or "condominiums."
Here are some of the main components of a declaration of co-ownership:
This is generally the first section of the declaration of co-ownership. It defines:
This section of the declaration of co-ownership sets out the rules that must be followed by building occupants. These rules may apply to both private and common portions. Here a few examples of aspects that may be governed by these rules:
This section sets out the lot or cadastral numbers of each private and common portion (a unique number assigned to them), as well as any real rights that affect them (such as easements).
There are several types of easement; they govern obligations to tolerate certain activities or refrain from exercising a right. Example: An easement may allow neighbours to enter your property or prevent you from building a pool.
The condo association or syndicate of co-owners is responsible for administering and ensuring compliance with the declaration of co-ownership. It is also responsible for maintaining the building. It is made up of two bodies, each of which has decision-making powers:
Good to know: The condo association can seek support from real
estate management companies. For a fee, these companies will take care
of certain tasks (such as maintenance or communicating with
Rules can vary
The rules for voting on various measures vary depending on the importance of the decision. Example: In Quebec, the votes of three quarters of the co-owners must be obtained to make changes to the constituting act of co-ownership. To change co-ownership by-laws, a simple majority is sufficient.
The declaration of co-ownership generally sets out fines applicable if a co-owner fails to comply with a by-law or duty. Example: A co-owner may incur fines for failing to make a payment. This is known as a penalty clause.
In Quebec: The Civil Code specifies that the syndicate of co-owners can place a lien (legal hypothec – an official debt) on a unit if the owner is in default for more than thirty days on the payment of their portion of common expenses. Such a situation can cause the owner to default on the mortgage with their financial institution, and their credit score can be affected.
The declaration of co-ownership can be modified. However, the rules governing such changes vary based on what you wish to amend and your province or territory.
For example, the section that sets out the building's by-laws is often easier to amend than the constituting act or the description of fractions.
Pro tip for Quebec
A number of documents and templates, including examples of penalty clauses, are available online through various groups and organizations. Look it up.
Be sure to review the declaration of co-ownership carefully before
you buy. Even if the condo seems perfect, you've also got to make sure
you're okay with the building's by-laws and the impact of common
expenses on your budget.
→ For more information on buying a condo, see our guide to co-ownership.
→ If you're a first-time homebuyer, also see our article "7 steps to buying your first home."
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