Bill 16: The CPA Order calls for a true reform and professional supervision of co-ownerships
A modest step forwardThe Order recognizes that Bill 16 is a step forward on a number of issues raised in recent years. Among other things, the Order notes the government’s commitment to link contingency fund contributions to a syndicate’s obligation to obtain a contingency fund study every five years establishing the sums necessary for the fund to sufficiently cover the estimated cost of major repairs and replacement of common portions. The Order also commends the obligation imposed on contractors or developers to submit a realistic initial budget, as well as a maintenance log and contingency fund study upon transfer of a property.
Three major issues left unaddressedAlthough the bill is a step in the right direction, it still does not address the serious shortcomings in the current legal framework and the numerous concerns largely shared by the various stakeholders in the co-ownership market:
1. Ill-defined financial reporting and certificate requirementsThe bill is silent on the quality and relevance of co-ownership financial reporting. Accordingly, for comparison purposes and to enable a wide understanding, the Order believes that it is desirable for the government to provide by regulation for financial reporting requirements and the accounting standards applicable to all syndicates of co-owners.
2. Poor supervision of co-ownership managementTo ensure the competencies of co-ownership managers and safeguard against possible abuses or malfeasance, the CPA Order considers it important that the certification of co-ownership management be entrusted to designated professional orders or a self-regulatory body, in partnership with professional orders, so that this professional activity is subject to the supervision required to protect the public, especially as regards professional liability insurance, ethics, qualification, continuing education, inspection and the holding of funds in trust.
3. Lack of competent authority in the area of co-ownership
It is common knowledge that the current legal and regulatory framework for co-ownership is lacking and fails to adequately ensure the protection of the public, in this case existing and future co-owners. To address this urgent need, the CPA Order believes it is necessary to create a competent authority, as Ontario did a few years ago.
This single point of contact would have the following responsibilities:
- establish a drop-off place for accountability reporting required of syndicates;
- ensure co-ownerships meet their compliance requirements;
- provide directors with tools to help them fulfil their governance and management responsibilities;
- foster governance and management best practices;
- raise stakeholders’ awareness of their responsibilities;
- develop and deliver official information tools for co-owners;
- mediate conflicts between co-owners and syndicates of co-owners;
- manage the bank of certified co-ownership managers.
“Syndicates of co-owners and owners should be better supervised, informed and equipped to protect their real estate assets,” said Geneviève Mottard, CPA, CA, President and Chief Executive Officer of the Order. “Furthermore, condo buyers should have access to complete, standardized, quality information on their future co-ownership so they can give their informed consent at the time of purchase.”.
About the Quebec CPA Order
The Ordre des comptables professionnels agréés du Québec has 39,000 members and 5,000 future CPAs, making it the third largest professional order in Quebec. The Order ensures the protection of the public and the visibility of the profession. It represents all areas of expertise of the accounting profession, including financial reporting, management accounting, strategy and governance, audit and assurance, finance and taxation.
– 30 –
Read the brief submitted by the CPA Order (in French only) >
Manager, Public Affairs
Quebec CPA Order
T. 514 288.3256  1 800 363.4688