The Difference Between Divided and Undivided
Undivided, “a co-op”, means that the owners share the same mortgages, rights and obligations.
These are some important tips to know:
- You need 20% down
- You can only bank with the Caisse Desjardins or La Banque Nationale
- You own shares, which may not be split 50%/50%
- Sometimes you may have to share the same furnace (heat source)
- Cheaper taxes because they are divided in half
- There is a co-op agreement in place (make sure you see it before you buy). It is a good idea to go through it together with the other owner (s)
- Usually one person receives the common bills and collects payment from the other person. Both parties are liable if the taxes do not get paid
- There is no tax assessed if the property is held in undivided co-ownership by a corporation, where the transaction is a sale of shares
- You cannot turn a plex into an undivided if you have a mortgage and a renter.
Because you will be part owners with someone, take the time to get to know them.
If you are interested in turning your plex into a co-op, you will have to make sure that the apartments are not being rented. They have to be vacant for the deed to take place. It is a process that a specialized notary can do for you. It will take about 2-3 weeks, $900 for the notary fees and about $1000 for the land surveyor.
To turn your plex into a condo, from my experience, it can take well up to nine months. There is a lot more red tape involved, but the outcome is a lot more appealing to most buyers.
One very important note that I found out, you will not be able to evict a tenant. So be very, very cautious. Get in touch with the Régie du Logement to find out exact details.
Comment by Home Mortgage
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Posted on March 23, 2006 at 12:25 pm