Legislative Context: Bill 16 and Its Implications
Bill 16, adopted in 2019, introduces major reforms to improve the management of co-ownership properties in Quebec. Its key provisions include:
Contingency Fund Study: Co-ownership syndicates are required to periodically conduct a study assessing the amounts needed to cover major repairs and the replacement of common areas. This study must be carried out by qualified professionals, members of recognized associations such as the OIQ, OAQ, OTPQ, OEAQ, or CPA.
Maintenance Log: A document detailing past, present, and future maintenance of the building, ensuring proactive and transparent management.
Certification of Condition of the Co-ownership: Provision of a comprehensive certificate on the financial and physical condition of the building at the time of sale, covering the contingency fund, common expenses, and recent repairs.
Tighter Banking Requirements in 2025
Faced with these new legal obligations, financial institutions have adjusted their mortgage lending criteria:
Systematic Verification: Banks now require tangible evidence of the financial health of condominiums, including the presence of an adequately funded contingency fund and up-to-date maintenance records.
Impact on Financing: Condominiums that do not meet these requirements may see their owners’ financing applications rejected or subject to stricter conditions.
Consequences for Condominium Associations and Owners
These new requirements have several implications:
Access to Financing: Potential buyers may encounter difficulties obtaining a loan for units located in condominiums that do not meet these criteria, thereby reducing the number of potential buyers and potentially reducing the value of the units.
Property valuation: Well-managed condominiums, with adequate contingency funds and planned maintenance, become more attractive, stabilizing or increasing unit values.
Increased responsibilities of condominium associations: Rigorous management is essential to maintain property values and ensure the satisfaction of co-owners.
Recommendations for effective management
To adapt to these requirements and ensure the long-term viability of buildings, condominium associations are advised to:
Conduct regular contingency fund studies: These studies allow for the assessment of future financial needs and adjustment of contributions accordingly.
Maintain an accurate and up-to-date maintenance log: Documenting the work performed and planning future maintenance ensures transparency and anticipation of needs.
Communicate effectively with co-owners: Informing them of legal obligations, financial needs, and decisions made promotes harmonious management and collective involvement.
Ensure the sustainability of your condominium today
In 2025, banking requirements will become stricter regarding contingency funds. Condominiums without adequate funds could face financing difficulties, affecting the value of their units.
Why act now?
Avoid unexpected special contributions: A well-funded fund prevents emergency calls for funds.
Maintain the value of your property: A well-maintained condominium is more attractive to buyers.
Comply with legal obligations: Law 16 requires a periodic contingency fund study.
How to proceed?
Conduct or update your contingency fund study: This analysis assesses the funds needed for major repairs and replacement of common areas over a specific period.
Create an up-to-date maintenance log: Document past, present, and future maintenance for proactive management.
Communicate with your co-owners: Inform them of legal obligations, financial needs, and decisions made to promote harmonious management and collective involvement.
Contact us to conduct or update your contingency fund study and ensure sound financial management of your building.
