Bill 16 in Quebec: Everything You Need to Know About Bill 16

Since its adoption on December 5, 2019, Quebec’s bill 16 has profoundly transformed the landscape of condominium management in Quebec. This legislation has sparked significant interest and discussion among real estate professionals and condo residents. In this article, we explore the ins and outs of bill 16, providing a clear and detailed overview of its implications and impact on the condominium sector.

What is bill 16?

Quebec’s bill 16 was introduced in response to the growing challenges faced by condo syndicates in a context where this type of housing is gaining popularity in Quebec. The government introduced new regulations aimed at strengthening condominium management.

The primary goal of Bill 16 Quebec is to modernize the legal framework to better address emerging needs in the real estate sector, particularly regarding condominium management. This legislation aims to establish more efficient and adapted practices, reflecting the evolutions and challenges of the Quebec real estate market.

The impact of Quebec’s bill 16 on the reserve fund and maintenance logbook

The content of bill 16 has changed two aspects that you absolutely need to know, namely the reserve fund study and the maintenance logbook.

Quebec’s bill 16 and the reserve fund study

The reserve fund is different from the funds allocated to the regular maintenance of the common areas of the building. The reserve fund acts as a cushion for major renovations and repairs.

Each month, part of the condo fees paid by the co-owners is deposited into the reserve fund to ensure that the syndicate has enough money to cover future repairs. The reserve fund must be reserved for major repairs and the replacement of common areas. The purpose of the fund is not to cover regular maintenance of these areas.

In this context, the reserve fund study is now mandatory to comply with current regulations. The reserve fund study involves a professional evaluation of the funds reserved in a condominium. The goal of the reserve fund study is to determine whether the funds are sufficient to cover the costs of maintenance, repair, and replacement of the building’s common areas. This evaluation is crucial to ensure the long-term financial stability of the condominium and avoid unexpected costs during major repairs. The condo syndicate is required to provide accurate information on the state of the reserve fund during general meetings.

Article 1071 of the Quebec Civil Code has also been amended. As a result, the reserve fund study must be conducted by professionals such as building engineers, architects, or professional technologists.

Quebec’s bill 16 and the maintenance logbook

Another important aspect introduced by bill 16 is the obligation for condominiums to maintain a maintenance logbook. This document, a true “bible” of the condominium, lists all maintenance and repair work carried out on the building’s common areas, as well as the scheduled dates for future work. The maintenance logbook is a valuable resource for condo managers and owners, as it allows for efficient planning of maintenance expenses and ensures the building’s long-term sustainability.

Furthermore, during a change of management team, the maintenance logbook plays an important role in allowing the condominium board to track interventions already completed and those remaining to be scheduled. It also provides the opportunity to establish or resume a multi-year work plan.

Unlike the reserve fund study, bill 16 does not specify whether the maintenance logbook must be created by a professional. However, by hiring a specialized company, you ensure that your condominium maintenance logbook is up-to-date and compliant with regulations.

Key Takeaways on the Reserve Fund Study and the Maintenance Logbook:

Other key points of bill 16

In addition to the maintenance logbook and reserve fund study, Quebec’s bill 16 includes many other changes. Here’s what you need to know:

The penalty clause

The penalty clause in the declaration of co-ownership allows for the sanctioning of co-owners in case of non-compliance with established rules. For example, if a co-owner fails to pay condo fees or carries out unauthorized work. Until now, this clause was often introduced in the building’s regulations by the condo syndicate, which could modify it with a simple majority vote in a meeting.

With bill 16, any modification or addition to an existing penalty clause now requires an amendment to the constituting act, involving a strengthened majority vote. Additionally, these changes must be notarized and registered in the land register.

Buyer protection

The new regulations under Quebec’s bill 16 guarantee potential buyers key information from the syndicate before making a purchase, which was not the case before. Thus, if you are considering buying a condo, whether new or existing, Bill 16 Quebec provides essential protection for buyers and co-owners.

• The developer is required to establish a reserve fund upon delivery. The developer must provide detailed information on the materials used, management, and layout.
• Stricter rules for condo syndicates, including the requirement to maintain a maintenance logbook, follow a reserve fund study, and establish a self-insurance fund.
• The seller must provide the buyer with a certificate on the financial status of the condo syndicate and the condition of the building.

These strengthened insurance requirements also play a crucial role in ensuring increased transparency and providing future buyers with reliable information about their potential investment.

What Quebec’s bill 16 changes depending on your situation

Whether you are a condo syndicate or a real estate developer, Quebec’s bill 16 has likely changed something in your daily operations. Here’s what you need to remember:

As a condominium

Newly constructed condominium

For a newly constructed condominium, bill 16 requires developers, within six months of the meeting, to produce and provide the condo syndicate with a reserve fund study and a maintenance logbook. The extraordinary meeting allows for the transfer of the building’s administration from the developer to the condo syndicate.

Existing condominium

For existing condominiums, bill 16 mandates the implementation of a maintenance logbook and the completion of a reserve fund study. This study must be reviewed every five years. The maintenance logbook contains technical information about the building, maintenance contracts, warranties, and insurance, as well as the tracking of future work according to the asset management plan.

Condominiums that did not have a maintenance logbook before the new provisions came into effect have three years to implement one, as well as to conduct the reserve fund study. Those that already had a maintenance logbook also have three years to bring it into compliance with the new rules.

As a developer

Quebec’s bill 16 represents a significant evolution in the regulatory landscape for real estate developers. Bill 16 introduces new specific obligations concerning condominiums. Once fully enacted, the real estate developer will be required to adhere to strict documentation regulations from the development phase of condo projects.

These obligations include:

• Providing detailed documentation on the condition of the building.
• Presenting an initial budget, including work forecasts, upon delivery during the transition general meeting.
• Conducting the first reserve fund study, determining the appropriate fund provision from the beginning of the project.

These new requirements aim to promote a proactive and responsible approach in the development of new condominium projects. By integrating sound and sustainable management practices from the outset, developers contribute to ensuring the longevity and financial stability of condominiums from their inception, in accordance with the standards established by bill 16.

What are the benefits of Quebec’s bill 16?

The content of bill 16 is dense, and it brings several significant benefits for condominiums. Here are the main advantages of the new bill:

Strengthened governance:

• Increased management obligations for condo syndicates (maintenance logbook, reserve fund study)
• Better management and monitoring of the building’s condition
• Enhanced long-term durability and value

Fairness and transparency:

• Equitable contributions by co-owners to the reserve fund (based on the reserve fund study)
• Clear and accurate information provided to potential buyers
• Informed decision-making by future owners

Financial protection:

• Protection of down payments made by condo buyers
• Increased responsibilities for developers in the event of budget underestimation
• Better assessment of construction costs

Stability and sustainability:

• Better planning of future expenses
• Reduced financial risks
• Adequate provisions for major repairs and common areas

Other potential benefits:

• Improved quality of life for residents
• Stimulated real estate investment
• Strengthened social fabric within condominiums

How Genispec Can Help You in Compliance with Quebec’s bill 16

Our team of building engineers conducts reserve fund studies according to best practices and in compliance with the new provisions of the Quebec Civil Code. Genispec offers various contribution scenarios tailored to the real needs of condo syndicates and property managers while considering the requirements of Bill 16 Quebec. We serve the Greater Montreal area, as well as the North Shore and South Shore.

Our building engineers in Montreal are equipped to assist you with your reserve fund study, maintenance logbook, or facade inspection. We specialize in commercial and industrial building inspections. Their in-depth knowledge of Bill 16 condo allows them to meet your needs while ensuring that all new regulations are respected.

In Conclusion

Bill 16 condo brings significant changes to ensure the protection of buyers, the quality of constructions, and the smooth operation of syndicates and municipalities concerned. Need more information? Contact Genispec and get your free quote.

Sources:

• Bill 16 Quebec – National Assembly of Quebec
• Official website of Quebec