Undivided co-ownership is attracting more and more buyers in Quebec, especially in major urban centers where real estate prices remain high. Buying in undivided co-ownership — with friends, partners, family members, or even strangers — may seem economical and flexible. However, this type of purchase involves several risks and legal issues that must be fully understood before committing.

What is undivided co-ownership?

Unlike divided co-ownership, undivided co-ownership does not involve any official cadastral division of the units. All co-owners jointly own the entire property, with no specific part legally belonging to any one of them.

In principle, each co-owner may exercise their rights over the entire property. To avoid misunderstandings, it is highly recommended to draft an indivision agreement. This document — although not mandatory — outlines the exclusive use of certain areas, expense sharing, management rules, and resale terms.

Indivision agreement : Essential, but optional

In the absence of an indivision agreement, the rules of the Civil Code of Québec apply (art. 1012 and ss.). While these provide a minimal legal framework, they are vague and insufficient compared to those governing divided co-ownership. This lack of clarity creates grey areas that can lead to conflicts regarding usage, expenses, or renovations.

A well-drafted agreement helps clarify each co-owner’s responsibilities. It offers a clear contractual framework to define rights and obligations and helps prevent disputes while ensuring smooth day-to-day management of the property.

Undivided co-ownership : Limits when reselling

Selling an undivided share can be more complex than selling a unit in divided co-ownership. First, the market is more limited. Second, buyers often face stricter financing conditions. Several financial institutions, for instance, require that all co-owners take out a mortgage with the same lender and provide a minimum down payment of 20%.

The right of withdrawal under article 1022 of the Civil Code of Québec adds another constraint. If a co-owner sells their share to a third party, the other co-owners have 60 days to buy back that share at the same price. This right can complicate a transaction or discourage potential buyers.

Renting a unit in undivided co-ownership : A false good idea?

Buying an undivided property with the intent to rent it out to a third party should be approached with caution. Tenants benefit from strong legal protections under the Civil Code of Québec, making eviction particularly difficult.

An undivided co-owner cannot reclaim any unit in the building unless only one other owner holds a share — and that person is their spouse (art. 1858).

Moreover, some financial institutions refuse to finance an undivided property intended for rental, or they may impose restrictive conditions.

Financial risks of undivided co-ownership

The financial aspects of undivided co-ownership require special attention :

• No legal obligation to create a contingency fund : Unlike divided co-ownership, the law does not require a fund to cover major repairs. In case of unexpected expenses (e.g., roof, foundation), co-owners must contribute quickly. This can lead to tensions or financial strain.
• Joint liability between co-owners : Each co-owner is jointly responsible for obligations related to the building. If one fails to pay their share of municipal taxes, insurance, or repair costs, the others may be forced to cover it.
• Unequal sharing of expenses : Without a clear mechanism in the indivision agreement, some expenses may be shared unfairly or disputed — especially when the use of the property is unequal.

Potential advantages of undivided co-ownership

Despite its drawbacks, undivided co-ownership can be beneficial in some cases :

• Buying a duplex or triplex with friends or family members
• A shared project based on common values (e.g., intergenerational living)
• The ability to split acquisition and maintenance costs

Conclusion : Get informed before buying in undivided co-ownership

Buying in undivided co-ownership involves legal and financial risks. Proper preparation is essential. To protect yourself, consult Gaucher Ross Avocats. We can help you draft your indivision agreement and assess the viability of your project.

To learn more about our specialized real estate law services, visit our dedicated page on real estate law.