How Bill 16 and 141 Truly Protect The Public.

October 12, 2022

Throughout the last two years, I’ve been hearing a lot of condo owners and buyers complaining about the steep increase in condo fees since 2019. Obviously the quick and easy explanation is that the government of Quebec introduced two new bills [Laws 16 and 141] which is the reason for most condo fee increases in the province. Doing so unfortunately does not properly explain to everyone how these new laws protect both current owners and future owners and why they’ve been put into place.

Let’s take a look into what these two bills actually propose and obligate, why they’ve been put into place and how they help and protect co-owners and property buyers.

Bill 16:

Bill 16 aims to reinforce building maintenance in Quebec. To keep condo fees low, some condo associations don’t put enough money into their contingency fund and as a result, when major work is required or emergencies occur, the boards charge co-owners  special assessments due to a lack of funds or even worse, they delay repairs, which can lead to the building deteriorating quicker than normal. To avoid buildings from becoming deteriorated, the government has imposed condo associations to do two things: 
 
1. Create a maintenance log – This document identifies the renovations that have been carried out, and allows for a track record of when things have been done, by who and its total cost. Keeping track of what has been done is an essential way to know where the building stands and what type of budget the association should be keeping. 
 
2. Organize a contingency fund study – This document is used to describe and evaluate the cost of major renovations to be completed over the next 25 years on the building’s common elements, (Windows, doors, roof, concrete, exterior cladding, staircases etc.) The study essentially estimates, on a yearly basis, the amount required in the contingency fund to cover these projects for the next years to come. 
 
Bill 141:
This law requires condo associations to create a self-insurance fund, a new addition to the existing operating fund and contingency fund. The new fund must contain the equivalent of the highest deductible (the amount that the insured party has to pay in case of an insurance claim) among all insurance contracts purchased by the board. Often the water damage deductible is the highest, if excluding earthquake and flood damage, and it tends to increase as claims are made. Condo associations must have a municipal property assessor determine the value of the property every five years. They’ll determine the depreciation of the property, which will subsequently cause the deductible to increase or decrease. The idea here is to not delay repairs/renovations if ever an insurance claim is made due to co-owners not having the necessary funds available. 

Obviously moving forward condo fees in most buildings will increase because a lot of associations did not think to set this type of system up, and in term negatively affects the building. In some cases condo fees can increase 30-40$ or even $100 monthly depending on the needs of the building. This may seem like a lot for condo owners and buyers alike, but did you ever think of what would happen in the case of major damage?

Think of this, Your neighbour downstairs, irresponsible joe decided to use his BBQ tonite, and unfortunately forgot to turn off the gas and the burners. By some freak accident, at some point in the middle of the night, his BBQ lit up, and destroyed the buildings, brick, some windows, aluminium railings, drywall and exterior emergency exits before the fire department could put it out. Now an insurance claim has to be made but your condo association does not have enough in the fund to pay the deductible, nor do the renovations themselves. So they have to ask you to pay $1,500 each co-owner to get the deductible going, so that the repairs can be done. Obviously some people will have the money ready, but some won’t, and now what?

The government is acting to protect co-owners from that type of situation exactly, and make buying condo buildings more appealing to young buyers now that their funds are properly set up and all works are addressed.

So the next time you question a building’s condo fees, take the time to properly look at their budget, the minutes of meetings and understand if they have respected and updated their policies to follow both bill 16 and bill 141. If they haven’t? get ready for a hefty condo fee increase in the future!