Buying a condo is an important step that raises several legal questions. So before signing a promise to purchase, it’s crucial to understand the type of co-ownership. In Quebec, there are two main legal forms : divided co-ownership and undivided co-ownership. These two regimes have concrete impacts on your rights, responsibilities, and financing capacity.

Divided co-ownership : the most common condo model

Divided co-ownership is the most common type found in condo buildings. Each owner holds a private portion (their unit) and a share of the common areas (e.g., stairs, roof, elevator).

Divided co-ownership is the most frequent form in condo buildings. In fact, each owner has a private unit and a share of the common areas (stairs, roof, elevator, etc.).

In this regime :

• You are the full owner of your unit.
• You receive a separate cadastral number for your condo.
• You pay condo fees based on your share.
• A condo syndicate manages the building, adopts rules, and handles finances.
• Financing is more accessible: financial institutions offer standard mortgage loans for this type of condo.

Undivided co-ownership : a particular structure

Undivided co-ownership is less common. However, it has some interesting features in specific contexts. This is often the case for buildings purchased by friends, family members, or investors.

In this regime :

• There is no official cadastral division of the units.
• All co-owners jointly own the entire building.
• Use of each unit is defined in an indivision agreement, an essential document outlining each person’s rights and obligations (occupancy, maintenance, resale, etc.).
• Getting a mortgage may be more complex. Often, only one lender is permitted, and all co-owners must borrow from the same institution.
• A minimum down payment of 20% is required. The Canada Mortgage and Housing Corporation (CMHC) does not offer mortgage insurance for this type of property. This applies to all undivided co-ownership properties.

Which type of condo should you choose?

For a buyer looking for a turnkey condo in a building managed by a syndicate, divided co-ownership is often simpler. It also offers a clear legal framework, set out in the Civil Code of Québec. This regime suits those seeking individual autonomy.

However, undivided co-ownership can be beneficial for a custom project. It does, however, require a strong agreement between co-owners and proactive management to avoid conflicts. Each option has pros and cons that must be carefully evaluated.

The importance of consulting a professional

Indeed, before committing to a condo purchase, take time to understand the applicable legal structure. A lawyer can analyze legal documents (declaration of co-ownership, indivision agreement), review tax implications, and offer guidance if needed.

In summary, each type of co-ownership has its benefits and constraints. Personalized legal support helps you make an informed choice and avoid unpleasant surprises after the purchase.

To learn more about undivided co-ownership, check out our dedicated article.