Conversion to divided co-ownership

Converting a rental property to divided co-ownership

NOTE : This section is intended mainly to explain how to complete an application and prepare supporting facts for a hearing. For more information on the rules and conversion steps, consult the section Divided Co-Ownership.

Overall procedure

  1. Required authorization

Under the Act respecting the Administrative Housing Tribunal, any person who wishes to convert one or a number of properties to a co-divided ownership must apply for authorization to the Tribunal, when the property has or had, in the last ten years, at least one dwelling.

Under the law, a “dwelling” means a premises rented for residential purposes, offered for rent or that is vacant after having being rented.

  1. Notice of intent to convert: first step

Before taking any other steps, landlords must give notice to each tenant of their intention to convert the property concerned, in writing and in accordance with law. A copy of each notice of intent to convert must be conveyed to the Tribunal. Landlords shall retain proof that such notice was conveyed to their tenants as this evidence shall be required at the hearing on the application for authorization (see point 6).

If is important to realize that, once such notice is notified, the tenants benefit form an unlimited right to remain in their dwelling and, except in some rare cases or where there is consent, they may not be evicted for the repossession of a dwelling by a prospective purchaser.

  1. Application to the municipality

A document must also be obtained from the municipality concerned. The procedure may differ from one municipality to another and depending on whether such application is filed in the urban agglomeration of Montréal or elsewhere:

  • Urban agglomeration of Montréal (conversion prohibited)

    Where a municipality has adopted a by-law providing for derogations, a derogation must be obtained through a resolution by the council of the municipality concerned. Landlords should contact their municipality to find out how to apply for a derogation and about the related cost.

    In the case of a property located in the Ville de Montréal, landlords should consult the By-law concerning the conversion of immovables to divided co-ownership. This by-law makes special mention of properties that are eligible for derogation.

  • Elsewhere in Québec (conversion allowed)

    Landlords must obtain a resolution authorizing the conversion or a certificate attesting that there is no by-law restricting conversion in the municipality, or that no such by-law has been adopted.

  1. Application for authorization

Landlords have six months to submit their application for authorization to convert to the Tribunal. This delay is calculated from the date of the notice of intent to convert or the date on which the municipal document was obtained, whichever comes last.

The application shall be submitted along with the fee, specified in the regulation, which varies according to the number of dwellings.

Given the complexity of the procedure, applicants are advised to consult a notary or lawyer for help preparing the application and in relation to the hearing .

When a notary assists an applicant, the notary shall see that the application is signed by the applicant, and may act only as a witness for the applicant. He may not be considered a representative, in accordance with the requirements in Articles 72 and 74 of the Act respecting the Administrative Housing Tribunal: mandate free of charge, etc.

  1. Notification of the application

Notice of the application shall be notified, at the applicant's expense, to each tenant and each joint tenant individually, where applicable. This notice shall also be notified to any third party, where applicable.

The most common methods of notifying notice are:

  • registered mail;

  • person to person;

  • bailiff.

Notice can also be notified using any other method that provides proof of receipt, such as delivering the notice by hand. Proof of receipt, in this case, may be an acknowledgement of receipt or the testimony of a person who witnessed receipt of the application.

  1. Hearing

The Tribunal shall notify the parties, tenants and any third party of the location, date and time of the hearing. A presentation notice is, therefore, not necessary as is the case for some applications and petitions before common law courts.

When applicants are physical persons, they must attend the hearing. Failing this, applicants may mandate a spouse or may be represented by a lawyer. Applicants who cannot attend the hearing may also mandate in writing a relative, person connected by marriage or a civil union, or friend. When the applicant is a corporate body (e.g., company, etc.), an officer, lawyer, director or an employee duly mandated by a resolution, or a lawyer may represent the applicant at the hearing.

Applicants shall bring to the hearing proof that the notice of the application was notified and proof that the notice of intent to convert was conveyed to the tenants (see point 2).

Because the hearing is not a mere formality, it is important to know that failure to provide any required evidence may lead to a postponement of the case and additional waiting periods.

Applicants or their representatives should be able to prove all the facts related to the application and all circumstances surrounding the conversion by means of testimony and material evidence. When an applicant is being represented and the representative is not personally aware of the facts, the applicant should ensure that there are witnesses able to relate the facts.

  1. Posting of notice

The law stipulates that a notice shall be posted before the building. The Tribunal asks for the cooperation of landlords concerning the logistics of the posting.

The posted notice includes the statement that any person may make a written representation in relation to the application within ten days of posting or of the publication of a public notice, if such is the case.

The Tribunal may, if it considers it expedient, hold a public hearing or hear any person who has made a representation.

  1. Decision

The Tribunal will convey a copy of its decision to the parties and to each tenant identified on the list appended to the application.

Under the law, the Tribunal's decision shall give the names of all tenants concerned and their apartment number, so that no further effort to repossess the dwelling can be carried out.

  1. Registration of the declaration of co-ownership with the Bureau de la publicité des droits (Land registration system)

Once authorization to convert has been obtained, landlords have one year to have the declaration of co-ownership registered in the property records. The Tribunal's decision to authorize the conversion must accompany the declaration of co-ownership.

Once this period has elapsed, the authorization becomes null and void. The applicant may, for valid reason, apply for an extension, provided the application is conveyed to the Tribunal before expiry of the period.

  1. Sanctions

If is important to be aware that any interested party, including the Tribunal, may apply to the Superior Court to have any declaration of co-ownership that has been registered without the Tribunal's authorization removed, where such authorization is required, and to have any contract arising from this registration cancelled.