Condo fees to rise as Bill 16 takes effect

A new law passed in December by Quebec creates new bonds for co-owners, which will result in higher condo fee bills.

Bill 401 didn’t make it, but as per its election promise the state of repair of residential buildings remains an important CAQ priority. The Quebec Government has created a not so new version of Bill 401, namely Bill 16, which aims to provide divided co-ownership with an improved framework by means of amendments to several articles of the Civil Code of Quebec.

Bill 16, will come into force on January 10. It will require condominium owners to create a contingency fund and conduct a study every five years detailing the amount of money needed to ensure that this fund is sufficient to pay for major ‘common area’ and ‘structural’ repairs and replacements.

The law will also require greater transparency on the part of directors to better communicate their decisions to co-owners. It will also be much more restrictive towards builders, who will no longer be able to underestimate the charges that come with an apartment sold for risk of penalties. The Bill will establish some ground rules, however building directors, for the time being, are not governed by any professional corporation or legally bound to any training.

According to estimates by the Quebec government, the introduction of this law will lead to an increase in condominium fees for homeowners costing them between $145 to $300 per year.

The Quebec Group of Managers and Co-owners (RGCQ) welcomes the changes made. According to Mr. Yves Jolicoeur, general secretary of the organization "We want to have a professional study on future financial needs, to ensure that the co-owners of the third or fourth generation do not have to pay the maintenance deficit or the deficit of the contingency fund."

The average age of condominium housing stock in Quebec is 29 years. This new measure will allow many homeowners to avoid unpleasant surprises related to the ‘more expensive’ renovations, among other issues that affect aging buildings. Those who recently purchased their condominiums are at the beginning of this process and will be unexpectedly forking the bill in the short term. Reactions will vary, depending on perspective according to co owners’ financial situations and short/long term plans. 2020 will tell.

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