The due diligence investigation of a divided co-ownership is generally carried out either for the acquisition of a private portion or simply to study the overall condition of the building and the management of the co-ownership by the administrators of the syndicate of co-owners.
First, let us recall the usual verifications done by the notary in view of the purchase of a building:
The location certificate must notably demonstrate the current state of the building, including, if applicable, the numbers of renovated lots. However, regarding a co-ownership, you must know that:
- For some jurists, a location certificate concerning only the private portion may be sufficient to verify, among other things, if the selling co-owner has carried out work in their private portion that encroaches on the common areas;
- While others recommend obtaining an additional location certificate concerning the shell of the building, in order to ensure that it has been constructed within the boundaries of the land and complies with the standards set by the municipality during its construction.
Secondly, prior to proceeding with the usual verifications, a more thorough due diligence is necessary and can be summarized by the following points:
It is essential to obtain from the syndicate of co-owners a copy of the budget for the current year as well as the assessment notice, and it is also necessary to submit a request to the administration of the syndicate of co-owners for:
Once the request is received, the syndicate of co-owners has a period of 15 days to respond and provide a statement of expenses.
Obtaining a copy of all the minutes of the general meetings of co-owners or, at the very least, those of the past 5 years will allow a potential buyer to discover:
Since certain property managers only provide a minimum of information citing confidentiality and to avoid any ambiguity, it would be appropriate to require, in the offer to purchase, that the selling co-owner commits to providing all the useful and necessary information for the potential buyer to carry out a proper due diligence.
Obtaining answers to all this information will effectively guide a buyer in establishing an adequate legal and financial picture of the co-owned building.
Notary-Direct, your best ally to carry out the due diligence of a divided co-ownership. All you need to do is provide any copies of location certificates that you possess, as well as the contact information of the administrators of the syndicate of co-owners and, if applicable, the contact information of the selling owner with a duly signed copy of the offer to purchase.