Hello dear readers,

In my most recent post, I spoke about the Ins and Outs of buying a newly constructed property. Most of the time, newly built properties refer to Divided Co-Ownership (more commonly known as “Condo Projects”). But what about the other side of condo life – more specifically, what about the world of Undivided Co-Ownership. Before I start, I think it is important to advise you all that  undivided co-ownership is not the simplest topic to tackle in a blog post, so I will not even try to go into the real technical and detailed aspects of it. The field of undivided co-ownership can be so vast and technical that many legal professionals devote their entire careers to it.

Therefore, I will focus on the bigger picture regarding Undivided Co-Ownership – the main differences and similarities with divided co-ownership, the advantages, disadvantages, etc. I hope you find it of interest and, as always, if you would like more information, you can feel free to comment or contact me directly.

1. Undivided vs. Divided Co-Ownership – same thing?: In a word, NO. Here are some of the main differences between divided and undivided co-ownership:

  • One property, many owners: Undivided co-ownership refers to one property owned by different people. Each owner would therefore have a certain percentage in and to the entire property (based on the amount he/she put in or the square footage of the part of the property he/she is occupying, or even based on whatever all the co-owners originally agreed upon). Let’s take the classic example of a Duplex in which the top part is owned by one person and the bottom part is owned by the other. Even though these parts may have different addresses, the duplex is still considered to be one property because it has not been divided into different lots (when I refer to “lots” I am referring to the numbers attributed to specific properties at the Registry Office and on which all deeds pertaining to the property are published – i.e. Deeds of Sale, Deeds of Hypothec (mortgage), etc.). This is an important distinction because, as opposed to divided co-ownership, undivided co-owners are joint owners of the same property and neither has a full right of ownership over the entire property. That being said, each co-owner has the right to sell or rent his/her percentage in and to the property, but there may be certain conditions in the Indivision Agreement, which we will look into further down.

 

  • Determination of each co-owner’s share in and to the property: As already mentioned, undivided co-owners have a specific percentage in and to the property because the property has not been formerly divided into different lots. This percentage needs to be decided between the co-owners at the time of the purchase or at the time the indivision is created. This is very important to keep in mind because the law states that undivided co-owners are considered to own the property 50/50, unless otherwise decided upon by the co-owners. Therefore, in the absence of a clause in the Deed of Sale or in the Indivision Agreement (like I said, more on this further down) stating each co-owner’s respective percentage in and to the property, they will be considered to own the property in equal proportions– regardless of the higher financial contribution of one co-owner vs. the other and regardless of the actual square footage of the part being occupied by one of the co-owners, etc.. For example, a couple in a common law relationship decide to purchase a home together. They are both listed as purchasers on the Deed of Sale but only one of them has actually contributed to the down payment for the purchase of the home. If there is nothing written in the Deed of Sale regarding each person’s respective shares in and to the property, it will be assumed (by law) that both are 50/50 owners of the Property. In fact, common law couples who are looking to purchase a home together should consult their notary about drafting a cohabitation agreement (more on this further down). Let’s take a more classic example now: a triplex is bought by three people and they each have the intention to occupy a unit each. One of the buyers puts half of the money down for the purchase and the other half is payed equally by the other two. They have agreed to this payment scheme because the first purchaser wishes to occupy the ground floor unit, which is approximately twice the square footage of the other two units. An indivision agreement (don’t worry, explanations are on their way) would need to be drawn up in order to establish each co-owner’s respective share in the property or it would need to be stated in the Deed of Sale that the first buyer shall own 50% of the property and the other two shall own 25% each. Otherwise, if there is no mention either in either the Indivision Agreement or in the Deed of Sale, all three will legally be considered to own 1/3 each.

 

  • Indivision Agreement: An Indivision Agreement is usually drawn up when the indivision is created in order to establish a set of rules, regulations, in order to establish each co-owner’s respective percentage in the property and the area which they shall be occupying it, the use of the property, etc. This agreement will be published on the property and is used primarily in situations like the one stated above regarding the Triplex (three different owners wish to buy a triplex and occupy a unit each). By virtue of this agreement, each co-owner will be capable to sell their share in the property (i.e. the top floor unit) without any problems. That having been said, it is often a condition in the Indivision Agreement that the other co-owners shall have a right of first refusal  meaning that the co-owner who wishes to sell his/her part of the property will need to offer it to the other co-owners before selling it to a third party (and/or when one of the co-owners receives an offer, he/she will have to offer their share to the other co-owners, at the same terms and conditions as stated in the offer). Indivision Agreements can vary somewhat, but they are necessary in these types of situations. They are also required by the Banks, if you are looking for financing and banks will require that some specific clauses be included in the Indivision Agreement, in order to ensure that their rights are protected. Needless to say, it is paramount that the Indivision Agreement be examined as part of your due diligence when looking to buy a property held in Undivided Co-Ownership.

2. Financing from the Bank: in principle, all banks will provide financing for the purchase of a property. However, in Quebec, only the National Bank and the Caisse Populaire provide financing to individuals wishing to buy in undivided co-ownership. This is also something to keep into consideration.

3. Common law couples looking to buy a home together: I touched on this subject a bit further up, but I will take some time on this issue as I believe it is a very important point of discussion (especially considering the status of common law couples in Quebec). While we can think of the classic cases of indivision such as a multi-unit home is owned by different people (the abovementioned triplex example is classic), it is important to note that indivision is created from the moment two or more people purchase a property together. As such, if you are looking to purchase a home with your common law spouse, it would be important to speak with your notary about a Cohabitation Agreement. As opposed to the Indivision Agreement, the Cohabitation Agreement is specific to couples purchasing a home together and wishing to establish :

  • their respective shares in and to the property;
  • each person’s contribution to the downpayment;
  • how expenses shall be divided amongst the couple (i.e. groceries, mortgage payment, etc.);
  • what will happen in the event both no longer wish to live together;
  • etc.

I have spoken about this issue in previous blog posts, but I think that it is important to reiterate that common law spouses do not have the same rights as married couples. As such, I believe it is extremely important to draw up a cohabitation agreement and if you feel it is too expensive at the time, at least speak with your notary about establishing each person’s percentage in the property (in the event you wish the shares to be different from 50/50).

 

I hope that this blog has been informative. As previously mentioned, there is no way that I can tackle the whole issue of undivided co-ownership in this one blog post and there are many more intricacies involved. My main goal was to give some broad information on the topic and open your eyes to some of the things you should be aware of when looking to buy a property in undivided co-ownership.

As usual, please feel free to post any comments you might have.

 

Have a great week everyone!

39 Responses to The Lay of the Land of Undivided Co-Ownership

  1. Hello,

    Thank you for this technical description.

    I am wondering how things work after a purchase is made, with respect to renovations? I assume that things like roof and foundation repairs or renovations would be paid according the % share of the house. But what about if you want to make upgrades to the space you occupy? In theory the other owner(s) benefit, so do they have to pitch-in? And what about maintenance like snow removal? Electrical bills and/or heating bills if there is only 1 meter or 1 furnace? Are all of these things agreed to in the indivision agreement?

    And how are changes made or repairs agreed to? Let’s say the furnace is going to be divided or a decision must be made between repairing or completely re-doing the roof, how does the vote happen? (Or is the roof the responsibility of the upper duplex owner and the foundation the owner in the lower/basement?)

    I’m so confused.

    Reply
    • Anna Kamateros says:

      Hi Kayla,

      All great questions. It’s hard to answer in a general matter because, in essence, all these questions should be answered by the Deed of Indivision that states each co-owner’s rights and obligations. It is always important to check the Deed of Indivision before purchasing the home, so that you may be aware of how things will be governed after you purchase the property. You should also feel free to ask your Notary these questions before purchasing, as he/she will be in a position to give you the best advice (after having read the Deed).

      I hope that this answers your questions, but if not (and/or if you have any further questions), please feel free to comment again or feel free to call my offices.

      Best regards,

      Anna

      Reply
  2. shakuntala says:

    Hi ,

    We have an undivided property in my grand father’s name.My father has expired in 2007.We have a 3 storied house in kolkata.I have an elder brother who is not ready to give me my portion.He is staying at 1st floor and let out the 2nd floor.My mother is staying in the ground floor in a very small place,where as my father had made the whole building. As he died without any will my brother can do this fraud with my mother and me. He is doing mental torture to my mother.Now my question is whether it is possible to sell out our (me & my mother) portion from that undivided property?? I have 3 uncles but they have their separate building in the same premises.

    Kindly help me regarding the same.

    Regards
    Shakuntala

    Reply
    • Anna Kamateros says:

      Hi Shakuntala,

      Unfortunately, I am unable to provide you with information about a property that is located in Kolkata, as it is the laws of Kolkata that would apply. I strongly suggest you seek advice from a property and/or estate lawyer there to help you with this issue, and that you do this as soon as possible.

      Good luck with everything.

      Best regards,

      Anna Kamateros

      Reply
  3. i have an undivided share in the property if i want to sell my share and if my other co owners donot want to sell and neither buy my share what can i do

    Reply
    • Anna Kamateros says:

      Hi Anitha,

      First of all, let me (a) apologize for the delay in replying to this post and (b) wish you and yours my best wishes for 2014!

      Now regarding your question:

      Your question is very good and I will try and answer as generally as possible, but there are many layers to this answer (it is not so clear cut).

      This all depends on whether or not you have a deed of indivision and what the deed of indivision says about the sale of each undivided co-owner’s respective share. Legally, no one can be forced to stay in indivision, and you cannot be forced to keep a part of the property that you no longer wish to keep. However, the Civil Code of Québec provides a right of redemption to undivided co-owners – this means that the other co-owners have the right, within 60 days after finding out that an undivided share in the property has been sold, and within the year following the sale of the property, to take back the property from the purchaser (at the same price and conditions as when the purchaser bought the property). Usually, in the Deed of Indivision, it will state that when you have a real offer to purchase by a third party (not one of the co-owners), you need to provide them with a copy of the offer (price, terms and conditions of the proposed sale) – they then have a period of time to either (a) advise you that they will buy the property at the same price, terms and conditions, or (b) waive their right to purchase the property (thereby allowing you to go forward with the sale). The other possibility is that, in the Deed of Indivision, all co-owners waive their right of redemption and are not granted a right of first refusal.

      This having been said, you can feel free to contact me and you could even email me a copy of your indivision agreement so that I can review it and get back to you with more specific information. If there is no Deed of Indivision, you are best getting a written document from each of the other co-owners, whereby they waive their right to purchase the property and waive their right to redeem the property after it is sold. This way, the purchaser will have a right of ownership that is certain (because the other co-owners will have waived their right to redeem the property after he/she has bought it).

      Please feel free to contact me with any further questions.

      Best,

      Anna Kamateros

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  4. Hi Anna,

    I’m considering purchasing a property in Montreal and some great ones are coming up that happen to be undiv.

    I heard that it’s hard to get insurance for an undiv. property. That the companies shy away from them because of the fact that the owner does not own a lot. Is that a common issue? I assume, reading your blog that all these issues should be addressed in the Undiv. Agreement.
    Also, when it comes to non payment of a common bill – property tax for example. What is the common solution? Let’s say of the three units in an undiv. building, one owner defaults on their share of a common bill. Are the others affected? Because three owners can agree that everyone pays their share on time, but how is it enforced? How do the other owners avoid having the non payment of a bill affect their credit scores? If that defaulting owner files for bankrupsy or disapears? Authorities want to seize the property or foreclose? I know that their mortgage has no affect on the other owners but the consequences of defaulting will have to land on the others…

    Thanks for your help and for all this information!

    Reply
    • Anna Kamateros says:

      Hi there,

      Firstly, congratulations on the possibility of buying a property in the near future! Your questions are very good – I will try and answer them as generally as possible, but please feel free to contact me directly if you require more specific information.

      1. With regards to the insurance, usually all the co-owners get together and insure the entire building under one insurance. The premiums then get divided proportionally between the co-owners (or equally, or in any other ways the co-owners decide upon in the Deed of Indivision). The premiums for the insurance on the building are usually paid with the rest of the common expenses (or otherwise, if the co-owners so decide in the Deed of Indivision). Thereafter, each co-owner can then insure the contents of his/her/their individual parts of the property (furniture, etc.).

      2. With regards to the common expenses, you are right to wonder about this because, contrary to divided co-ownership (condos), there is no legal entity (the syndicate for condos) that is exists to oversee the administration of the building. With regards to condos (divided co-ownership), the Civil Code of Quebec offers the Syndicate the right to register a lien on a condo when the owner has not payed his/her fees or does not respect the declaration of co-ownership. So, getting back to Undivided Co-Ownership, what often happens is, in the Deed of Indivision, each and every undivided co-owner grants each other what we call “cross-hypothecs” in favour of one another. These cross-hypothecs are usually ranked lower than any mortgage creditor (i.e. the Bank) on the property, but the idea is that these cross-hypothecs are granted in order to guarantee that each and every undivided co-owner respects the Deed of Indivision. It’s a bit more technical than I described, but for the purposes of this response, I wanted to give a general answer (but as mentioned earlier, feel free to contact me directly if you need more information).

      3. With regards to an undivided co-owner defaulting on his/her mortgage and/or going bankrupt – great question! Yes, the others can be affected because these other creditors can seize all the defaulting co-owner’s assets and sell them to a third party. However, the Civil Code of Quebec provides a solution – as long as the undivided co-owners register a “Notice of Address” (which should be done when you buy your property – your notary will probably speak to you about this), they can pay off the defaulting co-owner’s debt directly with the creditor (and the creditor will be obliged to accept the payment) and then sue the defaulting co-owner for the sums payed on his/her behalf. As such, the remaining co-owners will not be stuck with an unwanted third party taking over part of the property, etc.. It is definitely worth doing.

      I hope these answers are sufficient and good luck with the hunt for a property!

      Anna Kamateros,Notary

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  5. My husband and I were living in an undivided coproperty. Our co-owner sold, and we bought her property. When we did, we were told that the property became a duplex (the status of undivided coproperty dropped). If we want to steel the other unit again in the future, can we easily covert back to the undivided coproperty status? We have rented the unit, and are familiar with the Regie du logement rules about repossessing the unit.
    Thanks for your comments!

    Reply
    • Anna Kamateros says:

      Hi Kirsten,

      In short, yes, if you sell the second unit (the one you bought from the other co-owner), it will become an undivided co-ownership again and you might want to revise your indivision agreement, as the case may be. In reality, if you and your husband own the property jointly, you own the property under the regime of undivided co-ownership by default. Also, it’s good that you are aware of the Regie du logement rules since you have someone renting an apartment.

      I hope this answers your question but if not, feel free to contact me!

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  6. Suzanne Gerrior says:

    Hello Anna,

    My husband and I own 55% of an undivided property in NDG. We have a very good and respectful relationship with our co-owner and there are no issues with anything. In our property agreement we are the sole owners of the driveway (we own the first floor and most of the basement), but the rest of the property is shared (front and back yards). I haven’t been particularly fond of her tenants, although property wise there hasn’t been an issue. However, if my husband and I would like to become the sole owners of the property surrounding the building how do we do this? Is it something that we put into the agreement for usage, do we buy it from her? How would we come up with a number percentage wise? Can we change the property agreement even though she has a tenant?

    Along the same lines, her tenant doesn’t smoke, but her visiting girlfriend does. We can sometimes smell the smoke. but more importantly, we are concerned with second hand smoke. Is there anything we can do about this since the tenant’s rental agreement doesn’t say anything about not smoking?

    All the best,

    Suzanne

    Reply
    • Anna Kamateros says:

      Hi Suzanne,

      All great questions – I will try and answer as best I can in a blog post, but feel free to contact me if you need more information.

      With regards to the exclusive use of the backyard, etc. – this is something that can be addressed in the indivision agreement (which can be revised and published against the property at the Registry Office, as long as the undivided co-owners accept). You can redefine the backyard area as an area for which only the inhabitants of your unit shall have the exclusive use (and grant access rights to the other inhabitants of the upstairs unit – if they need to pass through this area in order to get to their cars, etc.) and this should, technically, increase the percentage share of your part of the property (as you will have the only use of this part of the property), which will also increase your share in the common expenses. In any case, this will have to be agreed upon with your other co-owner and she/he might require some kind of compensation or monetary value, as it is likely the rent she/he receives will decrease as a result of this.

      The smoking issue is slightly more difficult to deal with. From what I understand, there is no restriction as regards smoking (in neither the indivision agreement or the lease) and it has been “tolerated” for a while now. It may be difficult to restrict smoking at this point, unless the tenant/co-owner is being unreasonable in terms of cigarette consumption (i.e. there is a judgment that ruled that 3-4 cigarettes a day was not considered unreasonable, even if it bothered another co-owner). And even at that, it could be something that creates an unreasonable living condition. My suggestion would be to, moving forward, make an amendment to the rules in the Indivision Agreement (which will restrict smoking even inside each unit) and this will require your other co-owner to include the restriction in future leases (as co-owners are bound to make the rules known to their tenants and their tenants shall be equally bound to follow the rules of the indivision agreement). As for the situation that exists right now, it might be best to speak with your co-owner about the problem re: the smoking, have him/her speak with their tenant – you can also approach the tenant and ask them to cut down on the smoking in the apartment, in order to keep a good relationship with them. If worst comes to worst, you can always try mediation in order to come to a solution that may be mutually beneficial.

      I hope that I have answered your questions.

      Best regards and good luck!

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  7. We are all residents of Ontario and my parents are buying a cottage in Quebec and are listing me as a co-owner. I believe this will place us in undivided co-ownership. This is being done to defer my capital gains tax obligation at the time of their passing. However, I have recently learned that there is no joint tenancy with rights of survivor ship in Quebec, so ownership would not automatically transfer to me and capital gains would be applicable on the portion of the property they leave to me.

    I am assuming that this means that at the time of their passing (or when the last surviving parent passes away, since there is a tax-free transfer exemption between spouses), and the cottage is left to me, I will have to pay capital gains on the portion of the cottage which they own. Is this correct?

    How do you suggest we assign ownership to minimize (or maximally defer) capital gains tax? Should the cottage be in my name outright? Can we create an indivision agreement stating that I own a significant percentage of the property (ex:95%), thus minimizing the amount I inherit?

    Also, bonus question :)

    Scenario: I take out a mortgage on the portion of the property that I own in undivided co-ownership (highly unlikely), and I default on said mortgage, thus transferring my portion of the property to the creditor (bank). Is the bank able to liquidate this asset (portion of cottage) to anyone it pleases? How would this effect my parents’ (remaining as co-owners) rights to the property?

    Thanks for your help!

    Reply
    • Anna Kamateros says:

      Hi Marco,

      Firstly, please accept my sincerest apologies for not getting back to you with a response sooner. I try to answer questions posted on my blog as soon as possible, but these past few months have been extremely busy at the offices – I hate to use this as an excuse, but the truth is, I really have no other excuse.

      With regards to your questions (all of which are very good and very pertinent), please see my answers herein below. I need to advise you, however, that it is difficult to answer your questions completely, without knowing all the details of the situation, etc. Also, this blog is meant for information purposes and should not be used as a legal opinion – you can feel free to contact me directly if you require any further or more detailed information.

      1. You are right in assuming that you and your parents will become co-owners of the chalet in Quebec. You are also correct in that there is no joint tenancy with rights of survivorship in Quebec. In terms of succession and capital gains, etc. we would need to first determine whether or not your parents will be using the property in Quebec as their principal residence. With regards to deferring the capital gains, etc., I strongly encourage clients to meet with their accountants (or an accountant in Quebec, in your case) in order to get a clear picture of the situation, gather all relevant information and also establish a well rounded plan of action, as the case may be. It is always possible that we create a deed of indivision in which it is stated that you will be owner of 95% of the property, but it might be better and more cost effective to put directly in the deed of sale the proportions in which each of you will be owner of the property. Alternatively, you can be the sole owner of the property and confer a right of use of the property unto your parents, for their entire lifetime. Like I said, there could be several options available to you, but it would be best to have a discussion about this, in the presence of a Quebec accountant.

      2. With regards to your bonus question – technically, yes, the bank could take your percentage share in the property and sell it to a third party. However, in Quebec, the Civil Code of Quebec allows co-owners, who have each published a “Notice of Address of Undivided Co-Owners” at the Registry Office, to pay off the debt owed to the defaulting co-owner’s creditors (even in the event one of the co-owners declares bankruptcy and the bankruptcy trustee seizes the property for sale and payment of creditors) and said creditors will be required to accept the payment. As such, the co-owner who would have payed the other co-owner’s debt will be subrogated in the rights of the creditor (meaning, the co-owner who would have payed off the creditor will have all of the creditor’s rights and recourses against the defaulting co-owner). This is a simple solution provided by the Civil Code of Quebec and I strongly suggest that all parties purchasing a property together look into and discuss with their notary.

      I hope these answers are what you were looking for. In the event you require any further information, please feel free to contact me.

      Best regards,

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  8. Hello Anna,
    We have the upper condo in an undivided house. By the agreement written in french, The co-owner from the ground floor has the exclusive use of “all” lot except of “le chemin” leading to our main entry door. He has clearly the use of the drive way – “l’allee”, because the garage is also in his use. In fact, our “chemin” is raised from the ground level on a “terracement” and is separated alongside with his “allee” (which is at the ground level) by a small green space (0.80m) supported by a stone wall. It is no sketch attached to our agreement, and is unclear where exactly the “virtual border” would be between our way of access to the main entry and his drive way going to garage. Actually, our access by the walking side (comprising stairs and landings) together with the small green stripe and the stone wall, all are exclusively in the front of the external wall corresponding to our hallway (and our basement beneath it). We supposed that our “chemin” means this ensemble and we have taken care of the small green space until now. We recently decided to remake the stairs (being quite old and now dangerous to use)- all of course on our costs, but on this occasion, the other co-owner express his disagreement with our project made by an architect, refused to sign the form for the construction certificate, blocked us, arguing that the use of the terrain is his exclusive right and he wants to impose on us to replace the wood part only. Actually, the project proposed to remove the wall (ugly, difficult and costly to maintain) and to re-landscape the small plot, placing some brick tiles And a bit of extra-green in front of our entry (speaking about few, like 5 sq.meters…) . The agreement tells that none of the co-owners has the right to refuse a change until that will decrease the value of the property, which is not the case, but the contrary. And all this blockage is happening because the lack of clarity on terms of our “chemin” vs. his exclusive usage of the “all terrain”… Never the less, we do not care about the back yard, he has plenty of space on his use, the front it is not very important for him as he is neglecting it. I wonder if it exist any law or general practice that would entitled us to establish that our “chemin” is comprising the walk side but also the “terracement”, the small green space with the wall, with a total width of only 2.50 m, based on the reason that all this ensemble is leading exclusively to our part of the property, in front of our external wall with the main entry. We do suppose that was the initial intention and meaning, when the previous owners made the agreement. It is just common sense but the other co-owner told us that he do not see any advantage for him in this and feels like our project is ugly. Even more, on this season he noticed us to not plant any flowers on the small green space, but he remade the green space only on his side, never made something on the ours, letting the proximity to our entrance in a very bad condition. We had several tentative amiable talks, but no good result. We think that his position is abusive and he prevents us to improve our property, also ultimately forcing us to confront a visible danger because we have to use the old, rotten stairs… Do you have any wise information for us or an advice how to proceed further in order to secure that we can use the small lot in front of our entrance? We thought to ask for division, would be that the unique situation when we can clarify or change the use of the terrain? Thank you in advance. Best wishes. Carili.

    Reply
    • Anna Kamateros says:

      Hi Carmen,

      Again, sorry for the late reply in getting to this.

      Considering everything, I think that your best option would be to go to mediation with the other co-owner in order to settle everything. The problem, as you have already pointed out, is that the deed of indivision is unclear as to what parts of the property are to the exclusive use of each undivided co-owner. I suggest mediation because you can certainly engage the services of an attorney and try and force the issue, but you will still be required to live in the same building with one another and legal costs can accumulate easily. I am sorry that you have to go through these issues, but I truly do believe that the best first step, in order to salvage any neighbourly relationship that you might have, would be to go to mediation (as long as the other co-owner is open to this option).

      Please feel free to contact me directly with any other questions you might have – you can even feel free to email me if you like.

      Best of luck to you and your husband!

      Anna Kamateros, Notary, notaire
      B.S.W., LL.B., D.D.N.

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  9. Anna,

    Great info on your blog.

    We have an undivided co-prop in NDG. (seems like it’s common based on the Q&As here). Our indivision agreement had a term of five years that was not specifically renewed (we are in the 20th year).

    We are looking at selling our portion (51%) next year. Does the fact that we have not changed the terms of our agreement since the five years expired mean that we retain the same terms of ownership (back yard, front yard, basement etc.) ?

    Would it be useful to draw up a new agreement prior to putting our portion up for sale?

    Reply
    • Anna Kamateros says:

      Hi Jon,

      You ask a good question, but I would need more information to answer it fully. I am pretty sure that the term of 5 years you are referring to is regarding the time during which neither co-owner can provoke division of the undivided co-ownership (i.e. that one co-owner becomes 100% owner of the property or that the indivision ends some other way – possibly by converting to condos, if everyone is in agreement). These clauses are fairly standard in deeds of indivision and can go up to a maximum of 30 years. There is jurisprudence that states that, even after the term is expired, the rest of the indivision agreement continues to produce effects (so as to not rely solely on the provisions of the Civil Code of Quebec). This having been said, banks usually require a clause in the deed of indivision that prohibits ending the indivision before 30 years, in order to protect their rights (as mentioned in the past, there are only 2 banks that finance undivided co-ownerships, and they have both required these clauses in my experience) – so the indivision agreement might need to be revised regardless.

      In the event you are not referring to this, then please feel free to contact me directly – I will be better able to answer your questions if I have a look at the actual deed or with more information.

      Good luck with everything.

      Anna Kamateros, Notary, notaire
      B.S.W., LL.B., D.D.N.

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
    • Anna Kamateros says:

      Hi Cathy,

      I don’t mean to sound vague and I hate being unable to give answers on my blog, but I am unable to give you an estimate on the costs of having an Indivision Agreement drafted. Considering the particularity of Indivision Agreements and the individuality of each situation, I would say that (for my practice, anyway), prices are given on a case by case basis. The best way to get a clear estimate would be to have a consultation first.

      Sorry to not give you a clearer answer.

      Best of luck with everything!

      Anna Kamateros, Notary, notaire
      B.S.W., LL.B., D.D.N.

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  10. Aleksandar Vukov says:

    Hi Anna,

    We are about to purchase the upper unit in an undivided duplex in Westmount. We would like to have it divided asap. A friend told us that one of the conditions for converting it into two condos is that none of the units has been rented for at least ten years. We know that the unit we are interested in was rented up until two years ago. Does it mean that we would have to wait for 8 years before filing for division?

    Thanks in advance,

    Aleksandar

    Reply
    • Anna Kamateros says:

      Hi Aleksandar,

      You will not have to wait 8 more years before converting the property into a divided co-ownership. However, you will be required to obtain the authorization from the Québec Rental Board (régie du lodgement du Québec). Here is a link that provides you with a step-by-step process (it is an easier process when the two undivided co-owners are requesting that the application for conversion be granted, as opposed to the situation where the property was currently being rented out):

      Good luck with everything and feel free to contact me with any further questions you might have.

      Best,

      Anna Kamateros, Notary, notaire,
      B.S.W., LL.B., D.D.N.

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
      • Aleksandar Vukov says:

        Thank you so much Anna. You mentioned a link to step-by-step process, but I don’t see one. Could you please post it at your convenience.

        Best Regards,

        Aleksandar

        Reply
        • Anna Kamateros says:

          Hi Aleksandar,

          So sorry about that! – I could have sworn that it was included in my initial reply, but I guess something went wrong

          Here it is:

          Feel free to contact me with anything further and good luck with everything!

          Best regards,

          Anna Kamateros, Notary, notaire
          B.S.W., LL.B., D.D.N.

          Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

          Reply
  11. Dear ANNA:
    My brother and his wife own a quadruplex in Montreal (they do not live in it).
    Is it possible for them to sell only 50% of the property
    Best regards,
    Mario

    Reply
    • Anna Kamateros says:

      Hi Mario,

      In principle, yes, they can sell 50% of the property, as long as they both consent to the sale. However, I would strongly suggest drafting a Deed of Indivision, if the 50% share in the property is to be put on the market – chances are that the buyers will need a mortgage (which is only possible, in Quebec, by Caisses Desjardins and National Bank).

      Please feel free to contact me directly, should you require anything further.

      My best regards,

      Anna Kamateros, Notary, notaire

      By using this blog site you understand that this information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice

      Reply
  12. Hi Anna,
    I was wondering if you can advise me on the following situation please:
    I (living in montreal) & my brother (living in ottawa) own a duplex. We both got inherited this property from our father for 0$ and he is still alive. Now, my bother wants to sell his share 50% after 4 years of undivided co-ownership. During these 4 years, the price of property increased and so did the city value. However, my brother never contributed to any operating expenses or even be physically present.
    He recently sent me a letter by his lawyer claiming that he wants to sell his share but I am not letting him sell his share.
    The documents of transfer do not state any special rules but to say that both owners own 50% of the whole house.

    I am still a student and the ground floor is occupied by our mother. I was wondering if you can please guide me

    Reply
    • Anna Kamateros says:

      Hi Roger,

      Sorry for the late reply – there are a lot of issues to address with your post and I would invite you to contact me directly via email or over the telephone, in order to better discuss them.

      However, I can let you know that, legally, you cannot force someone to stay in undivided co-ownership with you. Even though you are both in undivided co-ownership, the law states that you cannot prohibit each other from selling your respective shares, as you so wish.

      What is important to note, however, is that you mentioned he has not contributed at all to the maintenance of the property (by law, he would be responsible for 50% – the equivalent of his share in the property) so you can possibly ask for these costs (as long as you have documentation to this effect). Also, if your brother sells his 50% share to a 3rd party, you have 60 days to reimburse him/her the price he/she payed for the share of the property, in order to become full owner (this is a right granted by law, when there is no Deed of Indivision). It is important to note that I am assuming that there is no Deed of Indivision on the Property – if there is, then these answers could change.

      Please feel free to contact me with anything further and good luck with everything!

      Best regards,

      Anna Kamateros, notaire, Notary

      By using this blog site you understand that this information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice

      Reply
  13. Hi Anna,

    I am considering buying an upper unit in an undivided duplex in Montreal, and my question concerns whether or not I would have the right to rent the unit at some future point in time. I have read and heard different things on this question. I understand that the banks won’t allow it. But, if purchasing without a mortgage or if a mortgage has been paid off, is there a legal restriction on renting out an undivided unit?

    Another question: if major repairs are required and my co-owners are not able to finance their share (eg, redoing the roof), what recourse is there?

    Thank you very much,
    Bonnie

    Reply
    • Anna Kamateros says:

      Hi Bonnie,

      All great questions – all of which depend greatly on the Deed of Indivision. In order to give you a definitive answer on the subject, I would need to look over and read carefully the Deed of Indivision. As regards the rent of the upper duplex, you can’t be restricted from renting your part in the property, unless it is restricted in the Deed of Indivision. Furthermore, it might be possible that the Deed of Indivision allows for each portion to be rented, but for a minimum period of time (i.e. no short-term rentals). Also, as regards your question about the mortgage, it would also be important to check your Deed of Indivision and ask the other co-owners the relevant questions because I have seen Undivided Co-Ownerships having an umbrella mortgage, separate from each undivided co-owner’s mortgage, as the case may be, taken by all the co-owners (and assumed by each co-owner who buys a part of the property) for the administration of the property.

      As for the major repairs, if they are necessary for the property (I am guessing that the roof repairs would be necessary for the maintenance of the property), they can be paid by one co-owner who can then claim the proportionate share from the other co-owners (this may be difficult, in the event the other co-owners just don’t have the funds). Or, like mentioned above, all the co-owners can look into getting a line of credit secured on the property in order to finance the renovations and then each co-owner would have to pay back the loan in their monthly expenses. These are all possibilities, but as mentioned in my blog post and in my response, it is imperative to look over the Deed of Indivision.

      Good luck and feel free to contact me further, should you require.

      Best regards,

      Anna Kamateros, Notary, notaire
      BSW, LLB, DDN

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  14. Thank you, Anna!
    Just to confirm, putting the Deed of Indivision aside, is it a fact that–if you have a mortgage–the banks do not allow rental of the unit? What about if you do NOT have a mortgage, but your co-owner does?

    Reply
    • Anna Kamateros says:

      Actually, the Banks usually allow rental of the units but they take a security on the rents as well (meaning that not only do they take a mortgage on the Property but also on the rents that the property collect, as they are also considered Immovable) – but again, this would need to be confirmed in the Deed of Hypothec (the mortgage Deed), as it would need to be specified (which it almost always is). Your only limitation as to renting the unit would really be in the Deed of Indivision (sorry if this is redundant).

      I hope that I have answered your questions fully, although I hope you understand that this cannot constitute a legal opinion, as I am not aware of all the details related to the property.

      Good luck and, again, feel free to contact me with anything further.

      Best regards,

      Anna Kamateros, Notary, notaire
      BSW, LLB, DDN

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  15. Greetings. I am considering buying an undivided condo. The owner owns the triplex and is separating it into three apartments in undivided co-ownership.

    He commits to conversion to divided co-ownership upon completion of the three purchases. What guarantees can I have that the condos will be divided? What is my recourse if he does not divide them? Also, who “owns” my apartment once I purchase it? The owner would still have the two other apartments until they are sold.

    Reply
    • Anna Kamateros says:

      Hi there,

      Sorry for the late reply – we had a mad rush at the offices right before the holidays and it has continued ever since. However, your questions are all very valid and I feel it is important to at least get back to you.

      With regards to your vendor committing to dividing the property, I would need more information than what is given because, once the three units are sold, then your vendor will no longer have any interest in the property and will not be in a position to divide the property into a divided co-ownership. It would be up to you and the other owners to actually do all that is required to divide the property (therefore, it will be in your control). It is possible, based on the information provided, that your Vendor’s undertaking is to pay for the costs of dividing the property into 3 condo units? if such is the case, you have a personal recourse towards the Vendor and you can even make the argument that this was an essential element of the sale (i.e. you would not have bought the property otherwise). I don’t want to go too much into detail on this last issue though, because it typically can cost a lot to go to court over these issues and as a notary, I try my best to prevent any conflicts from arising (i.e. we foresee all these situations and try to settle them in advance).

      As to the question of who “owns” the property once you purchase your unit. Well, let’s say that in theory each unit of this triplex is considered to be 1/3 of the property – you would then be 1/3 undivided owner of the entire property with your vendor (assuming he still owns the other two units) and you would have exclusive use of your unit, the whole in accordance with your Deed of Indivision (I hate to always repeat myself but it really is essential to look at the Deed of Indivision when any questions arise of this nature).

      I hope I have answered your questions adequately and feel free to contact my offices should you require anything further.

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply
  16. Hello,

    What a wonderful resource you have created with this thread! I am wondering if you might be able to help with this question…

    My partner and I are currently searching for a duplex property, which we would purchase with another couple, and hold in an undivided co-propriety (both couples owning 50% and each occupying one unit in the building).

    We will be paying all cash for our share of the duplex, but the other couple will require a mortgage loan.

    Does this situation create any particularities with our purchase? Do we need to be involved at all in the process of the other couple receiving financing? And would they be required to put down a full 20% on their mortgage (as is usually demanded for undivided properties) or would the fact that the total down payment on the property would be more than 50% be sufficient?

    thank you! and best wishes for the new year,
    Alexis

    Reply
    • Anna Kamateros says:

      Hello,

      What a wonderful resource you have created with this thread! I am wondering if you might be able to help with this question…

      My partner and I are currently searching for a duplex property, which we would purchase with another couple, and hold in an undivided co-propriety (both couples owning 50% and each occupying one unit in the building).

      We will be paying all cash for our share of the duplex, but the other couple will require a mortgage loan.

      Does this situation create any particularities with our purchase? Do we need to be involved at all in the process of the other couple receiving financing? And would they be required to put down a full 20% on their mortgage (as is usually demanded for undivided properties) or would the fact that the total down payment on the property would be more than 50% be sufficient?

      Hi Alexis,

      All great questions! I hate to be vague in my answer, but my answer depends largely on whether or not there is already a Deed of Indivision published on the Property (are you noticing a trend in my responses?) If there is a Deed of Indivision already published on the property, then you will need to refer to the Deed of Indivision, which would probably state that you need to get financing from either the National Bank of Canada or from one of the Caisse Desjardins branches. My answer below, however, is based on the scenario where there is no deed of indivision published on the property and you are, all three together, buying the property.

      In the last scenario I mentioned, even though you intend to occupy separate units of the property, you will be deemed undivided co-owners of the property, together, and you are all three buying the property together. This means that you will also be getting a mortgage with the other couple that is buying with you (even though you are putting down the cash for your “portion” of the property). This means that all of you will need to apply and be approved for the mortgage and that you will all be responsible for paying back the loan to the bank, together with any interest thereon (legally speaking). Otherwise, it would be necessary to execute a Deed of Indivision in which you stipulate the terms and conditions of the undivided co-ownership, etc. In any case, in order to prevent future conflicts and to make the terms and conditions of your co-ownership very clear, I strongly suggest you all meet with a legal professional to draft a Deed of Indivision, based on your intended occupation of the property, how you wish the property to be run, each of your obligations regarding your respective portions and the common areas, etc.

      I hope this answers your question, although I reiterate that in order to give you a solid legal opinion, I would strongly advise you contact me or another legal professional for a consultation on the matter.

      Good luck and congrats on the possible purchase of the new home!

      Anna Kamateros, notaire, Notary, conseillère juridique, legal advisor

      Disclaimer: This post does not constitute legal advice, nor does it establish a notary-client relationship. If you require any legal advice, please feel free to contact the Mtre. Anna Kamateros, Notary, directly.

      Reply

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