All you need to know about Bill 16
In the following article, we attempt to answer the questions we frequently receive from our customers about Bill 16. Whether you're a condominium manager, a condominium administrator or a co-owner who wants to better understand the changes brought about by Bill 16, this article will provide you with all the information you need to grasp the stakes of this new regulatory framework and act accordingly. Co-ownership is a complex universe where transparency, planning and compliance with legal obligations are essential to protect the value of the immovable, avoid conflicts and maintain sound governance.
Is Bill 16 in force?
Since its adoption, Bill 16 has raised many questions among professionals, administrators and co-owners. It is essential to understand that this law, although adopted, is not yet fully in force. However, certain aspects are already applicable.
For example, the constitution of a reserve fund remains mandatory, as stipulated in articles 1071 and 1072 of the Civil Code of Québec. The role of this reserve fund is to cover expenses relating to foreseeable major work, such as replacements or major repairs. Furthermore, the maintenance booklet, although already mentioned in the legislative provisions, is not yet subject to precise terms of application: the law stipulates that it must appear in the co-ownership register, but the official standards have not yet been defined in the regulatory texts.
Minimum contribution still too low
Currently, contributions to the provident fund must represent at least 5% of contributions to common expenses. However, it is increasingly recognized that this 5% minimum is not sufficient in most cases, especially when the building is ageing and major works are on the horizon (roof replacement, replacement of doors and windows, etc.). This is one of the reasons why a new legislative framework has been drawn up, to provide a better framework for financial planning and prevent reserve fund deficits.
Three years to comply
When it officially comes into force, Bill 16 will give syndicates of co-ownership three years to comply. This transition period is intended as a respite for administrators and managers, who will need time to adapt their practices, set up a complete maintenance booklet and carry out or update the reserve fund study in accordance with the rules that will be promulgated.
Implementation stages
On September 11, 2024, the Quebec government tabled a draft regulation specifying new requirements for syndicates of co-ownership. During the public consultation period, professionals, condominium owners' associations, managers and other stakeholders put forward their recommendations. They were able to comment and propose modifications.
We are still waiting to hear whether these suggestions will be confirmed. In any case, we anticipate that the final regulations relating to Bill 16 will probably come into force in 2025. It will therefore be crucial for condominium corporations to follow the evolution of these regulations, notably by regularly consulting the Government of Quebec website or specialized associations.
How to get ready now
Review your Declaration of Co-ownership
The first step is to carefully review your Declaration of Co-ownership and all relevant documents (minutes, service contracts, previous reports, etc.). This will give you a clear understanding of the history of the co-ownership, the extent of the rights and obligations of co-owners and the syndicate, and enable you to quickly identify any potential breaches of the new standards.
Exploring the new Bill 16
It is strongly recommended that you examine the text of the draft regulations and any accompanying by-laws to clearly identify the points that concern your building. If you find certain provisions complex (for example, the obligations surrounding the maintenance booklet, or the precise nature of reserve fund studies), don't hesitate to call on a specialized professional for clarification.
Sharing information
Share your findings with the other directors at the board meeting. Transparency is essential for fruitful collaboration, and for prioritizing actions by consensus: setting up or updating the maintenance logbook, creating an inspection schedule, choosing an expert for the reserve fund study, etc.
Carry out technical studies now
Although the law won't come into full effect immediately, it's a good idea to get a head start on the maintenance booklet and reserve fund study. The more you anticipate needs and plan preventive maintenance, the more you limit the risks of accelerated deterioration and emergency fund calls.
Important information on the regulation of condominiums in Quebec
Co-ownership in Quebec is a constantly evolving field. To ensure sound and harmonious management, the legislator periodically adjusts rules and obligations, taking into account the practical challenges faced by syndicates.
A necessary evolution
The rapid growth in the number of condominiums in the province has highlighted a number of problems: premature ageing of buildings, lack of reserve funds, conflicts between co-owners and sometimes deficient administration. The aging of the building stock, whose average age is around 30 years according to the Société d'habitation du Québec (SHQ), makes the situation even more critical: many buildings require upgrading or remedial work, which can be very costly.
Main objectives of the reforms
The recent reforms, including Bill 16, have several key objectives:
1. Improving transparency: co-owners must be able to consult financial, technical and administrative information relating to the building quickly and easily.
2. Ensure preventive maintenance: Without proper monitoring, certain components (roofing, structure, mechanical systems) can deteriorate to the point of requiring costly emergency work.
3. Protect against sudden increases in charges: By maintaining an adequate reserve fund, co-owners avoid financial surprises, such as unexpected special assessments.
4. Ensure a fair distribution of costs: Intergenerationality is the key here, as one generation should not have to pay for the shortcomings or underfunding accumulated in the past.
Since most Quebec condominiums are over 30 years old, these objectives are crucial to avoid major renovation work or internal conflicts.
New obligations for condominium associations
To achieve these objectives, a number of obligations have been introduced, will be strengthened or will become mandatory, including :
Maintenance log : This is an exhaustive record of previous work (invoices, contracts, warranties, etc.), as well as future interventions and their timetable. Keeping an up-to-date maintenance book is essential for scheduling regular maintenance, identifying repairs that need to be carried out quickly, and promoting transparency.
Reserve fund studies : Unions should have a qualified expert carry out an assessment of financial requirements for the next 25 years. This enables contributions to be adjusted to guarantee sufficient reserves for major replacements.
Designation of a competent professional : Inspections and technical assessments must be carried out by recognized professionals (engineer, architect, chartered appraiser or technologist), thus ensuring the reliability and objectivity of reports. This requirement prevents inaccurate or over-optimistic estimates that could prove catastrophic in the long term.
Financial and technical certification during a transaction : Before the sale of a unit, the future buyer is entitled to a clear picture of the financial situation (status of the reserve fund, common charges, etc.) and the health of the building (planned work, maintenance booklet, etc.). This certificate establishes trust and transparency in the market.
Penalties for non-compliance
Unlike in certain fields (taxation or health and safety), there is no fixed scale of administrative penalties specific to condominiums. Nevertheless, non-compliance (non-existent maintenance logs, underfunded reserve funds, etc.) may result in :
Civil liability and legal recourse: Co-owners or any interested party may sue the syndicate if they consider that management is negligent or incomplete.
Court injunctions and orders: A court can compel the syndicate to fulfill its legal obligations or provide missing documents.
Internal conflicts and loss of trust: A lack of transparency or insufficient reserve funds can lead to tensions, sudden increases in charges and a harmful climate.
Financing and insurance difficulties: Financial institutions may refuse to grant mortgage loans or renew mortgages if they deem the condominium to be at risk. Insurers, for their part, may increase premiums, demand stricter conditions or even refuse to insure a building deemed “at risk”.
Indirect financial penalties: Urgent work or forced upgrades (requested by a municipality or a court) often cost much more than if maintenance had been planned in time.
In short, ignoring Law 16 exposes you to serious problems that can compromise the co-ownership's financial equilibrium and create a climate of discord. We therefore strongly advise you to comply with the legal provisions and, if in doubt, to consult a professional.
What's the difference between Bill 16 and Bill 141?
Bill 16: Building maintenance
Bill 16 focuses primarily on preserving condominiums and improving their operation. In particular, it provides for measures to further protect both sellers and buyers. By strengthening financial planning and preventive maintenance, Bill 16 contributes to maintaining the value of immovables and ensuring better collaboration between all players involved in co-ownership.
Bill 141: Insurance
On the other hand, Bill 141 deals specifically with condominium insurance. It introduces new obligations and clarifications concerning :
Liability insurance coverage for co-ownership administrators, to protect them in the event of legal action related to their management.
Mandatory appraisal of the building every five years by a chartered appraiser, to properly determine the amount of insurance required.
The creation of a self-insurance fund by the syndicate to cover insurance deductibles and unforeseen loss-related expenses.
The obligation for the syndicate to provide co-owners with a sufficiently precise description of the private portions so that improvements made by co-owners can be clearly identified.
Complementarity of the two laws
The two laws complement each other to guarantee better protection for condominiums. While Law 16 focuses on preventive management and planning, Law 141 reinforces financial protection in the event of a claim.
Together, these two laws establish a comprehensive system designed to prevent both building deterioration and gaps in insurance coverage. This integrated approach offers a better balance between protection of property assets, fair distribution of expenses and peace of mind for co-owners.
Toolbox for condominium associations
Creating a maintenance log
The maintenance booklet is a structuring document that centralizes all information on the building's common areas. It is essential for compliance with the requirements of Law 16. This document must include :
Required maintenance work, as well as the frequency with which it must be carried out and the date on which it was done;
Routine repairs and the date they were carried out;
Contracts for maintenance work and routine repairs, if any;
Current warranty contracts, if any;
Reports of any inspections or appraisals carried out, if applicable;
Manufacturer's maintenance manuals, if available;
Component condition assessment;
Date of installation, if known;
Remaining useful life of materials and equipment;
Description of major repairs and replacements to be carried out over the next 25 years;
Date of major repairs or replacements carried out;
Plans, specifications and contracts for major repairs and replacements carried out.
A good maintenance log is a real dashboard for the syndicate. It makes it possible to anticipate costs, avoid oversights and, if necessary, convince a recalcitrant co-owner of the need for certain maintenance.
Rserve fund study
This study, which will become mandatory, makes it possible to assess financial requirements for the next 25 years. To take account of changes over time, it may have to be updated every 5 years, in particular to take into account :
Fluctuations in material and labor costs.
Changes to the building.
Results of technical inspections.
The study must include :
The total amount of the reserve fund at the date of the study.
An estimate of the cost of each major repair and replacement at the year of completion indicated in the maintenance log.
A recommendation on the minimum amount to be available in the reserve fund at the beginning of each year, and on the amounts to be paid into it annually.
The calculations made to establish the amounts referred to in the above points.
A signature and date by the authorized professional, attesting to the conformity and seriousness of the assessment.
The aim is to plan annual dues appropriately, so as to avoid special calls for funds. Indeed, too many syndicates wait until the last minute to deal with urgent repairs, leading to sudden increases in charges and tensions between co-owners.
Training and support
Co-ownership administrators, who are often volunteers, can greatly benefit from specialized training to help them better understand their new responsibilities and strengthen their management skills. Organizations such as the Regroupement des gestionnaires et copropriétaires du Québec (RGCQ) and the Association des syndicats de copropriété du Québec (ASCQ) offer, for example, workshops, conferences and educational resources tailored to the reality of condominium corporations. Thanks to these training courses, directors acquire a thorough understanding of legal obligations, good governance practices and financial planning methods, all of which contribute to more efficient and transparent management of their building.
Access to qualified professionals
Collaboration with building and financial experts specific to the condominium field, such as engineers, architects, professional technologists, chartered appraisers, chartered professional accountants and actuaries, is recommended to ensure compliance with Bill 16.
Better understanding Bill 16: Why is it in place?
To sum up, Bill 16 is designed to respond to current challenges, extend the life of buildings and promote responsible management.
A response to current challenges
The current condominium management model has shown certain shortcomings, the most obvious of which is the lack of preventive planning. All too often, not enough money is set aside to ensure regular maintenance and to replace essential building components as they fall due. The consequences are manifold:
Substantial deficits in reserve funds, making it inevitable to call in special contributions that can be very costly.
Buildings in an advanced state of deterioration, possibly requiring major repairs.
Conflicts within co-owners' assemblies over spending priorities and the scale of charges.
Loss of unit value when the building is not properly maintained, which can complicate resale.
Bill 16 responds to these challenges by imposing a long-term vision. It aims to prevent future co-owners from having to pay for deficiencies accumulated over many years, and from repeating the mistakes of the past.
Extending the life of buildings
Preventive maintenance is at the heart of Bill 16. By identifying long-term needs and ensuring adequate funding, condominiums can avoid costly repairs and extend the life of their components.
Promoting responsible management
Lastly, Bill 16 makes administrators more accountable, requiring them to justify their decisions, rely on expert analysis and ensure a higher level of transparency towards co-owners. The result is a more professional approach to condominium management, with benefits for all: greater clarity, better collaboration and, ultimately, healthier, more sustainable governance.
Need support?
The Borée team can help you take charge of your condominium, from drafting and updating your maintenance booklet to carrying out your reserve fund study. By acting early, you protect the value of your building and ensure that its management complies with current and future legal obligations.
