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UNDIVIDED CO-OWNERSHIP' J: E& ^4 v9 `% K$ y& R" ]4 D. _
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A property of this type belongs to several individuals, called undivided co-owners. No one owner owns an exclusive portion of the property; rather, they each own a fraction. For example, you buy a triplex with two of your friends and you all contribute equally to the sale price. After the sale, you decide to move into the second-floor apartment. The apartment does not belong to you exclusively; your two friends share its ownership with you, just as you share the ownership of their dwellings on the first and third floors. You and your friends are undivided co-owners of the whole triplex . In the example, your shares in the immovable are one third each.% g# A, c+ h$ X1 ?# z" u u
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FORMALITIES
: ~1 {" |5 @( T& wHow do you create undivided co-ownership ? Undivided co-ownership of a property begins informally when several persons, the undivided co-owners, acquire ownership of the same property. However, where an immovable is involved, it is in the interests of the undivided co-owners to draw up and register a formal agreement among themselves. The indivision agreement must be published to be enforceable against third persons.4 d) ? q j6 @7 g* i$ ~, d
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FINANCING9 @- e* \' O y4 J6 Y4 p
The Civil Code of Québec provides that each undivided co-owner may hypothecate his or her share of the property alone. The other co-owners are thus in no way liable should the hypothecary debtor default.
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2 m, k5 g6 D* b' NSELLING
# M! X' u2 b. q/ D+ yEach co-owner is free to sell or transfer his or her undivided share in the property, unless otherwise stipulated in the indivision agreement. However, the law provides, with some exceptions, that the other undivided co-owners may, within certain time limits, exclude the new purchaser by refunding the sale or transfer price and expenses. The undivided co-owners must exercise this right of redemption within one year from the sale or transfer of the share.+ h# k* x" p9 ~& S1 R
& P, U9 T% c9 L1 yTHE TERM
) ~( \/ z# e& EThe indivision agreement may stipulate a maximum term of thirty years. However, the agreement may be renewed.+ }' \: i) U+ \( I0 U& `, ]: H
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Contents of the agreement
$ U: D" k, q- {) Z4 u x7 o# cWhat provisions may be usefully included in an indivision agreement? / G' w, J! P& k. D% _) u T7 Z
The agreement may cover the following:
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*the term of the agreement
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- rights and obligations of the co-owners with respect to the enjoyment of the premises
) r8 _4 k% ]5 A/ R3 J& p - the sharing of maintenance and renovation$ W2 k7 D v' o+ K: M+ E
- the sharing of expenses
" k7 W1 s; i; M4 b - the ownership of improvements
{4 ~2 _4 K) g2 l1 z L, i' V - restrictions on selling
& F# Y, C; ~3 v1 K - rules for administering the property1 n0 H6 g3 \3 R" |# _
- rules governing division on termination of the indivision agreement7 ~% O+ K, f9 V. ~+ D
CONVERSION OF RENTAL PROPERTY
6 S% U% J; g/ @) L6 @9 |+ fThe owner of rental property comprising one or more dwellings who wishes to convert it to a condominium (divided co-ownership) must follow certain strict rules. Under current legislation, conversion to divided co-ownership is prohibited within the Montreal Urban Community unless the municipality in which the property is located has passed a by-law permitting it. M! |" x: b) s+ `, ^
In all cases, the first step for the owner is to contact the municipality in which the property is located to determine whether such a conversion can take place. Certain specific rules apply where all the dwellings in the building to be converted are occupied by the undivided co-owners. Finally, the law sets out the rights and obligations of the owner who has undertaken the conversion and the lessees living in the building. |
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