Quebec’s condo landscape is changing in 2025, and as a buyer, understanding these new laws can help you make informed decisions about your potential investment.
The updated regulations focus on ensuring that condominium buildings are financially stable and transparent, but they also bring added scrutiny from mortgage lenders. Here’s what you need to know about how these changes could affect your property purchase and financing options.
Key Changes to Condo Laws
1. Mandatory Reserve Fund Studies
Under new laws (Loi 16 and Bill 31), all condo buildings must conduct a reserve fund study every five years. This study evaluates whether the condominium syndicate has enough money set aside to handle major repairs and replacements in shared areas, such as the roof or elevators. It also provides a roadmap to ensure the reserve fund stays adequately funded over time.
2. Greater Transparency
Condominium syndicates are now required to share detailed reserve fund studies and financial reports with all owners and potential buyers. This means you’ll have access to key information about the building’s financial health and any expected future costs.
3. Improved Compliance
Syndicates must act on the recommendations outlined in the reserve fund study, adjust contributions as needed, and document maintenance plans. This ensures better management of the property and a clear understanding of your potential financial obligations as an owner.
How This Affects Mortgage Financing
1. Stricter Requirements from Lenders
Mortgage lenders are taking a closer look at condo financing. Here’s what you can expect:
Reserve Fund Evidence: Lenders may require proof that the condo syndicate has conducted a recent reserve fund study and is following its recommendations.
Financial Health Checks: Lenders will analyze the syndicate’s financial reports to ensure there’s enough money for upcoming repairs.
Risk Assessment: Buildings that don’t meet the new legal requirements may be flagged as higher risk, which could delay or even prevent mortgage approval.
2. Implications for You as a Buyer
Here are some challenges you might face:
Devaluation of Properties: Condos in buildings with insufficient reserve funds or poor financial management could lose value, making them less attractive investments.
Unexpected Costs: If the reserve fund isn’t adequately funded, you could be on the hook for special assessments to cover large repairs.
Mortgage Approval Issues: If the condo syndicate isn’t compliant with the new laws, securing a mortgage could be more difficult or come with higher interest rates.
What You Can Do
1. Review the Reserve Fund Study
Before making an offer, request the latest reserve fund study. This document gives insight into the building’s financial health and any upcoming repairs that might affect your costs as an owner.
2. Evaluate the Condo Syndicate
Ask for detailed financial statements to ensure the building is managed responsibly and complies with the new regulations.
3. Consult Your Mortgage Broker Early
A mortgage broker can help ensure that your financing aligns with lender requirements. They can also assist in addressing concerns related to the condo’s financial status, speeding up the approval process.
While these new regulations aim to promote better financial management and transparency in condo buildings, they also introduce new considerations for buyers. By understanding these changes and taking proactive steps, you can avoid surprises and make a confident, well-informed purchase.
If you have questions about how these changes might impact your condo search or mortgage financing, don’t hesitate to reach out. We’re here to help you navigate the process and secure your ideal property.
Ryan La Haye President – Mortgage Broker Groupe RLH – Planiprêt – Cabinet hypothécaire rlahaye@planipret.com