Among all the bills and regulations in Quebec, it is not always easy to navigate, especially when the law undergoes several major changes. In real estate, bills 16 and 141 are particularly confusing for many people.
The persistent confusion about these two bills can be explained, among other things, by the fact that some of their provisions entered into force as soon as they were adopted, several months ago, while others entered into force recently or will be later, depending on the decision of the government.
These two bills have major repercussions for co-owners and co -ownership syndicates. It is therefore important to tame them and understand the changes they imply. This article is a short summary of some of the measures adopted.
Bill 16 and 141: what are they?
If these two bills are at the heart of many discussions at the present time, it is because some of their provisions recently came into force, on April 15, 2021. The two bills had, however, been adopted by the government long before this date.
Bill 141, passed on June 13, 2018, focuses on insurance for divided co -ownerships. It involves many changes, including the establishment of a self-insurance fund, the obligation to take out civil liability insurance for co-owners, the creation of reference units and the need to assess the value of reconstruction.
Bill 16 was adopted on December 5, 2019 and can be seen as an addition to the framework for syndicates of co-ownership already covered by Bill 141. Its provisions affect the declaration of co-ownership, the register of ownership, the obligations of the board of directors and the meetings of co-owners. One of its measures aims more specifically to make it compulsory to carry out a study of the contingency fund and a maintenance log.
The impacts of bills 16 and 141 on condominiums and their syndicates
Compulsory evaluation of the reconstruction value of the building
Since April 15, 2021, syndicates whose insurance coverage is expiring are obliged to take out insurance covering the reconstruction value of the building held in co-ownership rather than the replacement value, as was previously the case. The purpose of this change is to avoid any ambiguity that could arise from the terms “replacement value”.
From now on, any syndicate of co-ownership will have to have the reconstruction value of the building regularly assessed by a professional. This evaluation must imperatively be carried out by a certified commercial real estate appraiser who is a member of the Order of Chartered Appraisers of Washington.
This assessment will be used by the syndicate of co-ownership to take out appropriate insurance that will enable it to rebuild the building in the event of a disaster. According to the law, it must be redone without fail every five years. The syndicate therefore has a period of five years following the date of the last valuation to have a new one carried out and thus keep the information and insurance coverage of the building up to date.
In short, this new regulation stipulates that:
The syndicate of co-ownership is obliged to take out insurance covering the reconstruction value of the building.
The syndicate must hire a certified commercial real estate appraiser, a member in good standing of the OEAQ, to carry out the evaluation.
A copy of the nationwide property and appraisal services report must be given to the building’s insurer.
Each of the updates must be sent to the insurer to index the cost of rebuilding the building to its actual value.
While a real estate broker is generally a professional authorized to assess the market value of a property, when selling it for example, it is important to note that only a certified appraiser is authorized to carry out the assessment of reconstruction value provided by law.
Syndicate of co-ownership insurance coverage
The new version of article 1073 of the Civil Code of Quebec also requires all syndicates of co-ownership, since April 15, 2021, to take out insurance that covers “as of right at least the risks provided for by government regulation”. From now on, insurance contracts will have to explicitly indicate the risks that are excluded in the insurance policy or in an endorsement.
In addition, while the syndicate was already required to take out civil liability insurance to cover its liability towards third parties, the members of the board of directors, the manager, the president, and the secretary of the board must now be covered by this insurance.