What is Law 16?
Law 16 contains the first major reform of the condominium law and brings important changes to the “Régie du logement”.
When was Law 16 adopted?
The bill was adopted in December 2019 following the detailed study in the parliamentary committee which took place over several months.
What changes will Law 16 bring?
1. Service book
Within the next three years, you will be required to keep a maintenance log to list the work carried out and to come, as well as all the technical information concerning the maintenance methods used in the common areas of the building.
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2. Study of the contingency fund
Fund that is devoted to expenses relating to major repairs and replacement of common parts of the building, as opposed to simple maintenance. This fund will not be used to pay for daily maintenance expenses. The objective of this fund is to plan for the long term in terms of financing, for work within the common areas, which requires the investment of substantial sums, by spreading them out over time. The board of directors will be responsible for determining all costs, after consultation with the meeting of co-owners, the expenses and amounts to be paid into the contingency fund.
As a result, boards of directors, unions, or even building managers will have to carry out a study of the contingency fund every five years, in order to determine the costs of major repair work to be carried out in the short, medium, and long term as well as the sums that will have to be paid monthly by the co-owners for the realization of the said work.
Why is it important to establish a contingency fund?
Some condominiums are careless enough to carry out a contingency fund study. As a result, the union does not take into account the nature and cost of the major repairs and replacements that will have to be carried out in the building and the contingency fund will be underfunded. Since they have not been scheduled in advance, major repairs or replacements come as a surprise and the board must impose specific levies that can reach large sums. If the co-owners are unable to pay the requested amounts, the work will not be carried out, which can have significant consequences on the general condition of the building and its various components.
3. Replenish the contingency fund
Finally, within 10 years, you will be obligated to replenish the contingency fund if the provision turns out to be insufficient. The law stipulates that this will consequently lead to an increase in co-ownership fees, but these new rules will allow you to resolve certain dysfunctions and ensure the sustainability of your building.
4. Delivery of documents upon resale
Finally, if you are reselling, you will be required to give all the condominium documents to the buyers at the time of the transaction.
Although some of the documents such as the maintenance log and the contingency fund study are already used by some building managers, they are now becoming mandatory for all those responsible for the management of a building. This new law in force ensures the safety of those who live in these homes as well as familiarizing themselves with and ensuring the financial health of the building.