Conversion to Divided Co-Ownership

Divided Co-Ownership

Converting: where and in what cases?

The converting of a rental property is authorized:

  • when all the dwellings in a building are occupied by undivided owners (they will have to prove that no tenant has been illegally evicted from his dwelling);

  • in all Québec municipalities outside the urban agglomeration of Montréal.

However, these municipalities may adopt by-laws restricting conversion or making it subject to certain conditions.

The converting of a rental property is prohibited:

  • if the building belongs to a housing cooperative, a non-profit organization or a municipal housing corporation and was built, acquired, restored or renovated as part of a government housing-assistance program;

  • in the urban agglomeration of Montréal.

However, the law grants by a resolution of the council of the municipality in which the immovable is situated the right to allow conversion.

Greater protection for tenants

Converting to co-ownership does not threaten the right of the tenants to remain in the premises.

They are entitled to remain in their dwelling as long as they wish to do so provided they respect their obligations.

This right is even reinforced since repossession of the dwelling is not possible anymore (save rare exceptions).

In regards to illegal repossession, harassment or nonobservance of conversion formalities, the law allows for recourses.

The steps to conversion1

The conversion of rental property is submitted to strict formalities.

To convert his immovable, the landlord must:

  1. notify each tenant of the building of his intention, and this prior to any other action, and give a copy of this notice to the Régie;

  2. obtain from the municipality a resolution authorizing him to convert or a certificate of compliance if a by-law provides for such a document;

  3. file an application for authorization to convert at the Régie du logement within six months from the date of the notice of intent or of the municipal document, whichever occurs last;

  4. register the declaration of co-ownership within one year of the authorization of the Régie;

  5. have an expert's report prepared on the state of the immovable and an information circular on the project and the administration of the condominium;

  6. before the first sale of the dwelling, offer the tenant to buy his dwelling at the same price and conditions as those agreed with another person.

Glossary

Co-ownership means that a property is jointly owned by two or more people.

Divided co-ownership means that some portions of the property are exclusively owned by individual owners, and other parts of it are their common property.

Undivided co-ownership means that the property as a whole belongs jointly to all the owners and that no part of it is exclusively owned by any one of them.

For the purposes of conversion, a rental property is one which comprises or has comprised, in the ten years preceding the application for authorization to convert at the Régie, a dwelling rented, offered for rent or vacant after having been rented.

Tenant’s recourses

What to do in case of illegal eviction?

The tenant may claim damages as well as punitive damages following his definitive departure from the dwelling, whether he agreed to it or not, if his departure is a result of:

  • an illegal repossession or one done in view of converting the property in divided co-ownership;

  • work done in view of preparing the property for conversion and evicting him.

What to do in case of harassment?

Any person wishing to convert a property to divided co-ownership is prohibited from using harassment and hence restricting the tenant's rights to the peaceful enjoyment of his dwelling.

A tenant victim of harassment may, among other things, according to the circumstances:

Any person found guilty of harassment is liable to a fine of no less than $5,800 and up to $28,975.

For information consult with the Régie du logement.

What to do in case of illegal sale?

At the time of the first sale, the tenant has priority to buy his dwelling: it is called the right of preemption.

However, if the landlord has not offered the dwelling to the tenant, the latter has one year from the time he is aware of the sale to ask the Superior Court for its cancellation.

To respect the law

The Régie may, ex officio or at the request of an interested person, issue an order if a person:

  • contravenes or is about to contravene the law on conversion;

  • acts or is about to act against a decision rendered by the Régie regarding conversion.

This order obliges the person against whom it is rendered to:

  • comply with the Régie's decision;

  • cease or not undertake his operations and to restore the premises to a state of good repair, if necessary.

The refusal to comply with such an order results in a contempt of court punishable by a fine of no less than $5,000 and no more than $25,000.

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