Undivided co-ownership is subject to specific rules. As experts in real estate law, notaries can advise you in the purchase or sale of property held in undivided co-ownership.
In undivided co-ownership, none of the undivided co-owners owns a private portion of the property; each owns a fraction of the whole.
Property held in undivided co-ownership has a single cadastre, i.e. a single lot number, but it belongs to several people, the undivided co-owners. None of these undivided co-owners owns a private portion of the property; each owns a fraction of the whole.
For example, let’s say you buy a triplex with two of your friends. Your three down payments are equal. After the purchase, you decide to move into the second-floor apartment. You don’t own this apartment exclusively, as your two friends share its ownership with you. In the same way, you share ownership of the first- and third-floor units with them. You and your friends are therefore undivided co-owners of the entire triplex (see illustration below). Your shares in the building are one third each.
Undivided co-ownership of a property begins informally when several people, the undivided co-owners, acquire ownership of the same property. However, it is in their best interest, especially in the case of real estate, to establish a written agreement between them. The indivision agreement must be published in the land registry to be enforceable against third parties.
The undivided co-owners are, in particular, jointly and severally liable for the payment of taxes. This means that if one of them does not pay their share, the others will have to cover it according to the terms provided by law or in the undivided co-ownership contract.
The indivision agreement protects co-owners by providing that an undivided co-owner wanting to sell their share must first offer it to the other co-owners.
Undivided co-owners, i.e. those who purchase a property together, are considered equal owners unless the act of sale or a co-ownership agreement provides for a different distribution.
The indivision agreement may cover the following:
- Term of the agreement
- Rights and obligations of the undivided co-owners with respect to enjoyment of the premises
- Sharing of maintenance and renovation obligations
- Sharing of expenses
- Responsibility for improvements
- Restrictions on selling
- Rules on administering the property
- Rules governing division in the event of the indivision coming to an end
An indivision agreement usually contains the right of pre-emption. This clause obliges an undivided co-owner who wants to sell to first offer their share to the other undivided co-owners.
An indivision agreement must be renewed every 30 years. It must be published in the land registry to be enforceable against third parties.
With some exceptions, if one of the undivided co-owners sells their share, the other undivided co-owners can turn away a buyer by refunding the sale or transfer price plus expenses.
Each undivided co-owner is free to sell or transfer their share in the property, unless otherwise stipulated in the agreement. With some exceptions, however, the law allows the other undivided co-owners to turn away the new buyer by refunding the sale or transfer price and expenses. The undivided co-owners must exercise this right within one year of the sale or transfer of that share.
The Civil Code of Québec allows each undivided co-owner to mortgage their share of the property individually. In the event of non-payment, the other undivided co-owners will not be held liable. Creditors do tend to be reluctant to loan to an undivided co-owner without requiring the involvement of all the other co-owners, however.