By Jennifer Lynn Walker
In a divided co-ownership, each owner owns part of the building, whereas in an undivided co-ownership, all owners are responsible for the entire building together.
These are some important tips to know when buying an undivided:
- You need 20% down.
- Only Caisse Desjardins or La Banque Nationale are lending on undivided.
- You will be purchasing shares.
- Sometimes you may have to share the same furnace (heat source).
- Cheaper taxes because it’s one bill for the entire building and you pay the percentage of your share.
- 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 owners. All parties are liable if the taxes do not get paid.
- The bank will not allow you to rent out your condo as long as you hold a mortgage.
- You cannot ask a tenant to leave in an undivided condo situation, even if you as the owner wants to take occupancy. Get in touch with the Régie du Logement to find out exact details.
- To purchase an undivided, only a specialized notary in the field can complete the transaction.
Because you will be part owners with someone, take the time to get to know them.
You might want to read up on the Divided and Undivided, which property is better?
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. The apartments need to be vacant for the deed to take place. This is a process that a specialized notary can do for you. It will take about 2-3 weeks, and the cost is for the notary fees and for the land surveyor.
To turn your plex into a divided condo, can take up to nine months or more. There is a lot of red tape involved, but the outcome is a lot more appealing to most buyers since you only need 5% to buy (depending on your financial situation), and can bank with anyone you wish.
Real Estate Broker & Educator
Jennifer Lynn Walker has specialized in buying and selling both residential and multiplex properties since 2003. She’s built a strong network of specialist, to give her clients a seamless experience throughout the real estate journey. Founder of Montreal Real Estate Investor’s Group, and Jolly Green Homes. How can I help you today?