Selling a Quebec Condo: Special Assessment at the Notary

Selling or buying a condo in divided co-ownership always raises the same question: who must pay the special assessment, and how does the contingency fund come into play at the notary’s office? In practice, everything comes down to the documents provided by the syndicate, the adjustments made on the signing date and the clauses in the offer to purchase. This article guides you step by step to avoid unpleasant surprises and structure an equitable allocation.

The notary’s role and the documents you will need to provide

The notary secures the transaction and ensures that the parties understand the financial condition of the co-ownership. To do so, the notary will generally request a certificate from the syndicate indicating:

• The monthly condo fees (common expenses) and any payment arrears;
• The special assessments adopted, their amounts, due dates and outstanding balances;
• Relevant claims, judgments, legal proceedings or losses affecting the common portions;
• The syndicate’s insurance policies in force and, where applicable, the relevant deductibles.

In addition to this certificate, the buyer and their broker often request: the declaration of co-ownership and its amendments, the by-laws of the immovable, the minutes of the latest annual general meetings and special meetings, recent financial statements and the budget, the maintenance logbook/EUC and, where applicable, the contingency fund study. These items provide a clear picture of upcoming work, the condition of the common portions and the syndicate’s financial health.

• Useful references:
  • LégisQuébec – Civil Code of Quebec (Divided co-ownership, sections 1038 and following) for the obligations of co-owners and the syndicate (see C.C.Q.): https://www.legisquebec.gouv.qc.ca/fr/document/ccq-1991
  • RGCQ – Publications and practical resources on condo management: https://rgcq.org/publications/
  • OACIQ – Resources on documents to obtain during a co-ownership transaction: https://www.oaciq.com/

To organize and issue these documents without friction, a strong financial and administrative management service is a major help to the board of directors. See our offerings: financial management and administrative management.

Special assessment when selling: who pays and under what rules?

Under Quebec law, a co-owner must contribute to common expenses and special assessments according to their relative share (see C.C.Q.). However, in the context of a sale, the allocation depends mainly on:

• The date on which the resolution was adopted by the meeting (annual general meeting or special meeting) or by the board of directors, as applicable under the declaration of co-ownership;
• The dates on which the instalments become due (the due dates set out in the resolution);
• The clauses negotiated in the offer to purchase and reproduced in the deed of sale;
• The adjustments made at the notary’s office on the signing date.

In the absence of a specific clause, a common practice is for the co-owner at the time an instalment becomes due to assume payment. That said, the notary can adjust the price or provide for holdbacks to respect this principle while avoiding payments crossing over after signing. Here is a summary of the usual scenarios.

Important: the special assessment resolution must be clear (total amount, relative shares, payment schedule and purpose of the work). A precise resolution makes adjustments at the notary’s office easier and helps limit disputes. The RGCQ recommends expressly stating the due dates and the connection with the approved work.

Contingency fund: what buyers and sellers need to know

The contingency fund belongs to the syndicate; it is never “transferred” to the seller or the buyer. When a sale takes place, there is therefore no individual reimbursement from the contingency fund. The buyer takes over the corresponding share, with its rights and obligations, in a co-ownership whose fund may or may not be sufficient depending on its long-term needs.

• The contingency fund study and the EUC (maintenance logbook) make it possible to anticipate major work (roofing, building envelope and mechanical systems) and assess whether special assessments are likely. Since the recent reforms associated with “Bill 16,” these tools have been central to planning. The notary and buyer will therefore want to review the reports and the entries in the syndicate’s register (see C.C.Q.).
• If the fund is undercapitalized, the risk of a future special assessment increases. The buyer may negotiate the price accordingly, request a seller’s declaration or agree to a temporary holdback if a vote is imminent.

Additional resources:
LégisQuébec – Civil Code of Quebec (divided co-ownership section): official text
RGCQ – Practical files and guides on the contingency fund: publications
Regie du batiment du Quebec (RBQ) – Choosing a qualified contractor for major work on the common portions: rbq.gouv.qc.ca

Adjustments at the notary’s office: condo fees, assessments and other amounts

On the signing date, the notary makes the “adjustments.” Typically:

• Condo fees (common expenses): allocated pro rata for the month based on the possession date. Did the seller pay for the current month? The buyer reimburses the seller for the portion after signing.
• Special assessments: if an instalment falls due after signing and nothing has been provided for, the buyer pays it. The parties may nevertheless provide for a pro rata allocation based on the reference period (e.g., an assessment covering work spread over the current year), or a holdback in trust until the final invoice is received.
• Special fees charged by the management provider (certificate, document copies, etc.): allocated according to the agreement. Some syndicates charge administrative fees for issuing the certificate; confirm this in advance.

Tip: before signing, have the balance of the common expenses and special assessments confirmed in writing to avoid surprises. Also keep proof of payment and the relevant minutes.

On the tax side, certain amounts (e.g., duties on transfers of immovables, known as the “welcome tax”) are payable by the buyer and are not settled through the contingency fund or common expenses. For the official rules, refer to Revenu Quebec: duties on transfers of immovables.

Practical advice for the board, seller and buyer

• For the board and condominium manager: announce anticipated work early in the minutes and at the annual general meeting, publish the reports (maintenance logbook, study), and adopt clearly quantified assessment resolutions with a clear payment schedule. Keep the register up to date and make it easy to issue the certificate quickly.
• For the seller: proactively disclose any special assessment that has been adopted or is in the process of being adopted, and provide the requested documents. An up-to-date certificate speeds up preparation of the deed.
• For the buyer: review the financial statements, budget and contingency fund study. If an assessment is likely, negotiate an allocation clause, a price adjustment or a temporary holdback at the notary’s office.
• For everyone: record the agreement on the allocation (pro rata, full payment by one party or the other, or a holdback in trust) in the offer to purchase and then in the deed of sale. This helps avoid disputes after signing.

If you would like to equip your syndicate to respond quickly to notaries and standardize certificates, explore our services and an overview of our packages. For more practical topics, browse the multiRent blog.

Frequently asked questions (FAQ)

Q1. Can the seller recover “their share” of the contingency fund when the property is sold?

A. No. The fund belongs to the syndicate and is used exclusively for major work on the common portions. There is no individual reimbursement when a sale takes place; any desired adjustment must be negotiated in the price or through a specific clause.

Q2. A special assessment is voted on after signing, but the work was discussed at the previous annual general meeting. Who pays?

A. In principle, the co-owner at the time the assessment becomes due pays, unless the seller and buyer have agreed to a different arrangement. Earlier discussions are not enough; it is the formal adoption and payment schedule that matter.

Q3. The final assessment amount is uncertain at the time of signing. Can an amount be held back at the notary’s office?

A. Yes, if the parties agree. A clause may provide for a holdback in trust at the notary’s office until the syndicate adopts its resolution and the invoices are received. Work with the notary to set the amount and release date.

This article provides general information and does not constitute legal advice. Consult a lawyer or notary regarding your situation.

This article provides general information and is not a substitute for advice from a tax specialist or accountant. Refer to Revenu Quebec and the CRA for the exact requirements.

Do you manage a co-ownership in Quebec? Discover our packages or contact us to assess your needs.