Marcotte, Hamilton, Lavallée
Appeal from a judgment of the Superior Court dismissing the appellants’ application to annul and declare unenforceable against them a decision made during a co-owner’s meeting. Allowed.
The original declaration of co-ownership defines the destination of the immovable in question as residential. The two concomitant declarations covering phases 1 and 2 also stipulate that the immovable is intended [translation] “exclusively for residential living”, while allowing for the possibility for co-owners to engage in professional activities on the condition of not disturbing the peace. In addition, the original declaration expressly provides for the right to lease the private units, whereas the concomitant declarations state that leasing is allowed for a minimum term of one year. During the annual general meeting held on May 25, 2017, the co-ownership by-laws were amended to limit the proportion of units leased in the immovable to 10%.
The appellants mainly argue that the trial judge erred in law in finding that the decision made on that date constituted merely a framework for the reasonable exercise of the right to lease without changing the destination of the immovable, and therefore the vote did not have to be a vote under art. 1098(1) of the Civil Code of Québec (S.Q. 1991, c. 64 (C.C.Q.)).
The amendment of any document included as part of the declaration of co‑ownership under art. 1052 C.C.Q. can be done only if justified by the destination, characteristics or location of the immovable, as stated at art. 1056 C.C.Q. Article 1063 C.C.Q. provides that all co-owners have free use and enjoyment of their private portions.
The restrictions applied to the co-owner’s right to lease are much more than a simple scheme for or framing of the right to lease. The restrictions bring the proportion of units that can be leased down from 100% to 10% and give priority to owners who are already renting out their units (18% of the co-owners at the time of the vote). In practical terms, on the day of the vote, this had the effect of denying 82% of the co-owners their right to lease their unit, whereas it is one of the rights of ownership protected by art. 1063 C.C.Q. and is expressly provided for in the declaration of co-ownership. These restrictions cannot be justified by the destination of the immovable, understood according to the broader concept that takes into account its luxurious nature, or by the fact that the residents are concerned about its maintenance.
Moreover, the indeterminate duration of the restriction and the fact that there is no way to foresee when the leasing rate will drop below 10% undermine the legitimate or foreseeable exercise of the right to lease, making it impossible to plan for the use of such a right. This practical and concrete difficulty fundamentally affects the right to lease, amounting a negation of its existence, and cannot be considered an extension of the destination of the immovable merely because the majority of the co-owners are in favour of it.
In the absence of proof that the by-law is an extension of the destination of the immovable, it must be held that it violates art. 1056 C.C.Q. and that it must be annulled, inasmuch as the threshold that would have allowed its adoption – that is, a vote of three-quarters of the co-owners representing 90% of the voices – was not achieved during the assembly of May 25, 2017. The decision was not made in compliance with art. 1098 C.C.Q., which undermines its validity and it must therefore be annulled.
Text of the decision: Http://citoyens.soquij.qc.ca