Quebec's Bill 16 on divided co-ownership has introduced major obligations for condominium corporations: maintenance log, contingency-fund study, and building condition attestation. For many boards of directors, these new requirements generate anxiety — from a lack of information, concerns about cost or simply unfamiliarity with the process.
The good news: with the right preparation, this transition is not only manageable, it is an opportunity to put your corporation's finances on a sound footing for the next 10, 20 or 30 years.
Adopted in December 2018, Bill 16 amends the Civil Code of Québec and imposes three main new obligations on condominium corporations:
Start of the obligation for existing corporations to retain a professional for the maintenance log and the contingency-fund study.
Delivery of the maintenance log and contingency-fund study for existing buildings (timeline depending on when the regulations come into force).
Mandatory update of the contingency-fund contribution level based on the study's recommendations.
Mandatory building condition attestation required for all divided co-ownership real-estate transactions.
The exact deadlines depend on the implementing regulations that are still being finalized. Some are already in force. It is strongly recommended not to wait until the last minute: accredited professionals are in high demand and lead times to obtain a mandate are getting longer.
Before retaining a professional, collect everything you have: building plans, invoices for past work, prior inspection reports, insurance policies, meeting minutes mentioning work performed. The more you have, the fewer billable hours the professional will spend collecting information.
The contingency-fund study must be performed by an accredited engineer, architect or professional technologist. Obtain at least 3 comparable quotes. Check references with other corporations, verify the candidate's professional-liability insurance coverage and their specific experience in divided co-ownership.
The professional will conduct a physical inspection of the entire building: roof, foundations, mechanical and electrical systems, exterior envelope, parking, elevators, etc. Schedule this visit by coordinating access to all common areas and technical rooms. Plan to have a board representative present to answer questions.
The professional will first deliver a preliminary report listing all inventoried components, their current condition, their estimated remaining life and the projected replacement costs. This is the time to identify anomalies, ask questions and correct any factual errors before the final version.
The final study will recommend an annual contribution level for the contingency fund. If your fund is currently insufficient, the catch-up can be phased in over several fiscal years. A partner handling administrative and financial management of your corporation can help you model different scenarios and choose the one that best balances the financial effort on unit owners with the long-term health of the fund.
The update of the contribution level must be approved at a general meeting. Prepare a clear presentation explaining the process, the study's main findings and the financial implications for unit owners. Transparent communication limits pushback and reinforces confidence in the board of directors.
The cost of a contingency-fund study varies with the size and complexity of the building:
These costs may seem high, but they have to be put into perspective: an inadequate contingency fund can trigger special assessments of tens or hundreds of thousands of dollars when a major replacement comes due. The study is an investment, not an expense.
Expenses related to the maintenance log and the contingency-fund study are common expenses of the corporation. They can be funded from the operating fund or, if the board so decides, through a one-time special contribution from unit owners.
Quatre Piliers coordinates the entire process for you: selection of the professional, document collection, oversight of the mandate, presentation at the general meeting and update of the fund. Request a free assessment.
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