Common expenses

The common expenses or co-ownership fees (commonly called “condo fees”) are used to pay the various expenses related to the co-ownership and the building.

Common expenses include expenses arising from the co-ownership and the operation of the building, and sums to be paid into the contingency fund (i.e. the fund used to pay for major repair or replacement work on the common portions). Co-owners contribute to the common expenses according to the relative value (share) of their fraction.

If the fraction provides exclusive use of certain common portions (balconies, parking spaces, etc.), the co-owner of that fraction will alone pay the ongoing, non-major maintenance and repairs costs of these portions. Unless the declaration of co-ownership specifies otherwise, the cost of major repair or replacement work on the common portions for restricted use are part of the common expenses payable by all, even if they are for the exclusive use of a co-owner. Only if the declaration of co-ownership so specifies will the co-owner be responsible for expenses relating to the major repair or replacement work on the common portions of which he has exclusive use. This must be verified by the broker in order to adequately inform the co-owner of the financial obligations he will have in the coming years.

Whether the co-ownership is self-managed or professionally managed, the common expenses are established annually with the adoption of the budget by the board of directors, following consultation with the co-owners (who do not have any decision-making power with respect to the budget) at the annual general meeting. The board of directors must also consult the general meeting of co-owners before deciding on any special contribution to the common expenses (commonly referred to as a “special assessment”). This consultation often takes place during a general meeting called “special” or “extraordinary,” in accordance with the terms of the declaration of co-ownership.

Some buyers may be attracted by co-ownerships with low common expenses. However, caution should be exercised, as the setting of common expenses should be based on an analysis of the financial and physical health of the immovable. Common expenses that are not high enough may result in special assessments when work is required on the building.

Where can one find the amount of common expenses payable?

Generally, once the budget is adopted, each co-owner receives a notice of assessment setting out the value of his common expenses for the current year, including contributions to the contingency and self-insurance funds, and the date on which they are due.

The co-owner is therefore able to provide this information to the broker representing him for the sale of his property.

If there is no administrative structure in place to manage the co-ownership, the co-owner may not have such a notice of assessment.

If the seller is unable to provide all the necessary information, it is strongly recommended that the broker use the form Request for information to the syndicate of co-owners (RIS)* to obtain the information.

Under article 1068.2 C.C.Q., the syndicate of co-owners has an obligation to provide all documents or information concerning the immovable and the syndicate that will enable a prospective buyer to give enlightened consent.

In addition, the financial statements will show where the various expenses for the immovable are being allocated.

*For more information, see the section entitled “Mandatory and recommended forms”.

Notice of assessment

A notice issued by the board of directors or the manager indicating the amount of contributions to common expenses, the contingency fund and the self-insurance fund, which each co-owner must pay based on the relative value or his fraction, and the date on which they are due.

Sources: condolegal.com — Definition: Notice of assessment and lacopropriete.info — Les charges communes