Friday February 23 2024

Bill 31 is adopted

In our previous article of December 4, 2023, entitled “Bill 31 – Study of the contingency fund and the maintenance log”, we examined the potential repercussions of the adoption of Bill 31 on these two crucial aspects of property management. We then argued that the legislator could introduce a significant distinction based on the specific characteristics of each building, as for their respective obligations linked to the contingency fund and the maintenance log.

On February 21, 2024, the National Assembly adopted Bill 31, tabled by France-Élaine Duranceau, Minister responsible for housing: An Act to amend various legislative provisions relating to housing (french only).

This modulates certain rules concerning divided co-ownership. The legislator made a distinction based on the characteristics specific to each building, an essential approach to better respond to the needs and reality of each co-ownership building.

What are the implications for co-ownership ?

Bill 31 makes changes to certain legislative provisions relating to housing, including articles 1070.2 and 1071 of the Civil Code of Quebec. The amendment of these articles means greater flexibility.

On the one hand, the government will be able to adjust, in its regulations, the obligations of co-owners according to the characteristics of the building, for the establishment of the maintenance log (1070.2 C.c.Q) and for the completion of the study of the contingency fund (1071 C.c.Q). Said characteristics have not yet been defined, but logically it will probably concern the size, type and characteristics of the building.

On the other hand, Bill 31 also modifies the frequency of these studies, initially planned every five years. It is now up to the government to determine when they should be carried out.

This new flexibility is received with a sigh of relief in the world of co-ownership.

New articles of the civil code of Quebec as enacted by bill 31

(This wording is unofficial, it is a resumption of the texts presented during the session to present the amendments in the parliamentary committee).

Article 1070.2. The board of directors has a building maintenance log drawn up, which describes in particular the maintenance carried out and to be carried out. The board keeps this notebook up to date and has it revised periodically. The form, content and terms of keeping and reviewing the maintenance log, as well as the people who can establish and review it, are determined by government regulation. The standards provided for in the regulations may vary depending on the characteristics of the building.

Article 1071. The syndicate establishes, based on the estimated cost of major repairs and the cost of replacing common areas, a liquid contingency fund available in the short term, allocated solely to these repairs and replacements. This fund must be partly liquid, available in the short term and its capital must be guaranteed. It is the property of the syndicate, and its use is determined by the board of directors.

The board of directors obtains a study of the contingency fund establishing the sums necessary for this fund to be sufficient to cover the estimated cost of major repairs and replacement of common areas. This study is carried out in accordance with the standards established by a government regulation, which designates in particular the professional orders whose members are authorized to carry out these studies and determines how often a new study must be obtained by the board of directors. These standards may vary depending on the characteristics of a building.

The amounts to be paid into the contingency fund are set on the basis of the recommendations made during the study of the contingency fund and taking into account the evolution of the co-ownership, in particular the amounts available in the contingency fund.

Until the developer obtains the study of the contingency fund, the sums to be paid to this fund must correspond to 0.5% of the reconstruction value of the building.

The publication of the regulation which will set the details remains to come, but the government now has all the necessary flexibility to develop it, thus allowing the modulation of the rules in terms of maintenance logs and studies of the condominium contingency fund of divided co-ownerships according to the specific characteristics of each building.

Rebecca Gillis
Coordinator legal affairs 

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