CONVERTING A RESIDENTIAL RENTAL BUILDING TO DIVIDED CO-OWNERSHIP*: THE BASICS, AT A GLANCE.   
  
Steps Landlords Tenants Purchasers

From the Notice of Intent

 The landlord must make sure conversion is allowed by the municipality and
  • Prior to any action, , send a Notice of Intent to Convert to each tenant.
    The Notice must comply with the model provided in the law (free copies available from the Régie du logement).
  • Send a copy of the Notice to the Régie du logement.
  • Notify the tenant at least 24 hours prior to visits by prospective purchasers or to any preparatory action for the conversion.
  • The landlord can carry out work in a dwelling he occupies.
  • No authorization from the Régie is required for maintenance work and urgent and necessary repairs for the preservation of the immovable.
  • The landlord regains his right to repossess a dwelling and carry out work there if he informs the tenant, in writing, that he no longer intends to convert or if the conversion does not take place within the time frame prescribed by law.
  • Once the Notice of Intent has been sent, the landlord cannot repossess the dwelling for himself or his relatives except if there is a transfer of the lease after the notice or in the case of a new tenant since the authorization to convert has been granted by the Régie.
  • Whether he agreed or not to leave the dwelling, the tenant may ask for damages as well as punitive damages following an illegal repossession or one done in view of converting the property into divided co-ownership and evicting him.
  • From the notice and until such time as a majority of voting rights in the general meeting of co-owners are held by occupant co-owners, all work in the building (save exceptions) must be authorized by the Régie which considers its immediate usefulness for the tenant and may impose just and reasonable conditions.
  • If the work is authorized and the tenant must temporarily vacate his dwelling, the landlord will pay him on the date he has to vacate a compensation determined by the Régie.
 The Notice of Intent must be given prior to the visit of a prospective purchaser.

Application to the Municipality
  • In Montréal :
    • Apply for authorization from the council of the borough and obtain it.
  • In other municipalities, if needed:
    • Obtain certificate of conformity or authorization, according to by-law.
  • In municipalities where the council (or a committee) rules on applications for authorization or exception, any interested party (e.g., tenants, prospective purchasers) may be heard by the council (or committee).

Application for Authorization to the Régie du logement
  • The application for authorization to convert must be made to the Régie within six months of the Notice of Intent or receipt of the municipal document, whichever occurs last.
  • The municipal resolution or certificate as well as a list of the names and addresses of the tenants of the building must be joined to the application.
  • Application costs must be paid.
  • A copy of the application must be served to all tenants.
  • At the hearing, an up-to-date list of tenants must be provided.
  • The Régie must refuse to authorize the conversion if:
    • the property has already undergone work in view of preparing it for conversion and evicting a tenant;
    • possession of a dwelling has already been retaken illegally or in view of converting the property into divided co-ownership;
    • in the five years preceding his application, the owner has been found guilty of harassment against a tenant of the building, save for pardon.
      In such cases, no new application may be produced until three years have elapsed from the date of refusal.
  • When it authorizes the conversion, the Régie identifies the tenants protected from the repossession.

Registration of the Declaration of Co-ownership

  • The authorization for conversion must accompany the declaration of co-ownership.
  • The landlord must proceed with the publication of the declaration of co-ownership (at the Bureau de la publicité des droits) within one year of authorization by the Régie, otherwise the authorization is no longer valid. The Régie may extend the period if reasonable cause in shown (the request must be made before the year is up).
  • The Régie or any interested party may apply to Superior Court to have the registration of a declaration of coownership cancelled if the Régie did not authorize it and to have any other contract (of sale, etc.) signed thereafter annulled.
  • The purchaser of a converted dwelling should ensure the Régie's authorization to convert was attached to the declaration of co-ownership when it was registered.

Before the First Sale of Each Dwelling

Expert's Report and Information Circular

 The landlord must give the prospective purchaser
  • an expert's report on the condition of the building.
  • an information circular on the project and administration of the co-owned building, with the decision of the Régie and a summary of the declaration of co-ownership or a draft of the summary.
  • If these documents (or the deed of sale) contain false, misleading or incomplete information on a substantial element, the purchaser has three years in which to claim a reduction of his obligations (price, etc.) before the courts if he suffers a prejudice.

Offer to Sell
  • The first sale of a dwelling cannot be made to any person other than the tenant unless it was first proposed to the tenant at the same price and on the same terms and conditions as those agreed with the other person.
  • The offer to sell must comply with the model provided by law (free copies available from the Régie du logement) and must include the expert's report and the information circular.
  • The tenant has priority of purchase on his dwelling.
  • If the sale is made in violation of the lessee's right of preemption, the tenant may, within one year from the time he is aware of the sale, apply to the Superior Court for its cancellation.
  • The tenant has one month in which to accept or refuse the offer to sell. If he does not answer, the tenant is deemed to have refused the offer to sell.
  • If the deed of sale is not signed within two months after the acceptance of the offer or within any longer period agreed upon, the landlord may sell the dwelling to another person, unless the deed of sale was not signed for a reason beyond his control.
  • The purchaser, like the selling landlord, cannot repossess the converted dwelling while it is occupied by a tenant who has been identified by the Régie.

*When all dwellings are occupied by undivided co-owners, they only need to file an application for authorization to convert at the Régie and publish the declaration of co-ownership within one year of the authorization of the Régie.

  
  
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