Initial Syndicate and Concurrent Syndicates: Co-ownership in Complexity

For reasons that are more economic than practical, municipal authorities often require that multi-phase co-ownership projects be developed under a model involving an initial declaration of co-ownership followed by concurrent ones.

Developers, however, dislike this development model, as it requires a full and final commitment to build buildings that may only be sold several years later, at which point real estate market conditions may have changed, depending on the economy. This model is also immediately off-putting due to the mere rules governing the creation of multiple syndicates interconnected by increasingly complex declarations and servitudes.

This approach offers virtually no concrete advantages and, without a doubt, several disadvantages for those who later acquire residential units within it. Many dissatisfied individuals have come to us in the past seeking relief from this situation by separating the phases from one another. We had no practical or low-cost solution to offer them. How can one truly live well in such a “layered” co-ownership structure?

AN INTELLECTUALLY CLEVER STRUCTURE, BUT POORLY SUITED IN PRACTICE TO DIVIDED CO-OWNERSHIP

Co-ownership with concurrent syndicates is based on a two-tier structure. The initial syndicate, first created for all properties to be built, is intended to manage the general common portions, typically exterior elements such as land, streets and private roads, parking areas, access points, external or underground infrastructure, technical networks, and shared equipment. In some cases, where buildings share connected underground spaces (such as garages), these may also form part of the initial declaration. The concurrent syndicates, for their part, manage the common portions specific to each building, such as roofs, elevators, and internal mechanical systems.

This division introduces administrative and decision-making complexity that should not be underestimated.

BUILDINGS UNDER DEVELOPMENT

The planned construction of several neighbouring buildings under a forced co-ownership structure over a number of years involves several uncertainties:

• The inconvenience of noise and disruptions caused by ongoing construction;
• The fact that the developer retains control of the initial declaration and charges owners of the first phases without granting them any say;
• The fact that early buyers face competition from the developer, who will continue selling identical but newer buildings nearby for several years;
• Situations where the developer retains rights over parking spaces for use in future phases, even though current residents would like to use them;
• The fact that the allocation of shares in the initial syndicate is determined at the outset, but the final built version of the phases may change and become unfair to already completed buildings;
• The possibility that the developer may go bankrupt before completing construction, leaving certain areas as no man’s land;
• The development of later phases as rental units because the market no longer supports the sale of new condos.

Unfortunately, these situations are rarely disclosed to buyers in the early phases, who discover them soon afterward.

EVERYTHING DEPENDS ON THE DRAFTING OF THE DECLARATION OF CO-OWNERSHIP

The success of such a real estate arrangement depends above all on the quality of the co-ownership declarations. The initial declaration and the concurrent ones must clearly define the common portions, their allocation among the various syndicates, decision-making mechanisms, and the distribution of costs. Only specialized notaries can properly structure such legal arrangements.

However, in many projects, the declaration is drafted at an early stage, sometimes before the actual use of the property is fully known. As a result, ambiguities remain: a parking slab, a pipe, or a structural wall may be subject to multiple interpretations. These grey areas quickly become sources of disputes and administrative deadlock.

In particular, the allocation of costs between completed and yet-to-be-built phases has led to numerous disputes between developers and co-owners. Developers may claim exemption from paying for undeveloped land, while co-owners demand contributions toward the management of the existing initial syndicate, which incurs expenses that must be fairly distributed. Notaries must never overlook the importance of clearly addressing such situations.

FRAGMENTED GOVERNANCE

Managing a co-ownership with multiple syndicates means that each vertical syndicate must participate in two boards of directors, prepare two budgets, two financial statements, hold two annual meetings, conduct two contingency fund studies, maintain two maintenance logbooks, produce two syndicate certificates, and so on. This duplication significantly increases the workload for administrators.

It should not be forgotten that administrators are most often volunteer co-owners. In a context of concurrent syndicates, they are expected to master complex legal and financial concepts while coordinating their actions with other boards of directors. This discourages many.

Too often, in the medium or long term, syndicates become dysfunctional: either the initial syndicate takes control of the phases, which then cease to function properly, or worse, the initial syndicate itself deteriorates and fails to comply with its governing declaration. It is difficult to overstate how crucial it is that all syndicates operate in accordance with their obligations and governing documents.

SENSITIVE FINANCIAL ISSUES

The financial aspect is also a source of concern. Co-owners generally contribute at two levels: to their concurrent syndicate and to the initial syndicate. This dual contribution is often poorly understood and can create a sense of inequity, particularly when costs increase for infrastructure that is not highly visible or frequently used.

The management of contingency funds adds another layer of complexity. Without rigorous coordination, some syndicates may be adequately funded while others fall behind, jeopardizing long-term planning for major work.

SIMILAR BUILDINGS THAT MUST REMAIN SO

In these “layered” co-ownership structures, the different buildings are not merely neighbours but co-contracting parties. Rules requiring uniform appearance, often imposed through servitudes, prevent syndicates from allowing any exterior modifications by co-owners, particularly on balconies and terraces. Vertical syndicates that consider their existing materials outdated or impossible to replicate may struggle to agree with others on replacement materials. Without clear mechanisms and ongoing collaboration, conflicts between phases are inevitable.

A VIABLE BUT DEMANDING MODEL

Concurrent syndicates are not inherently flawed. When well designed, they allow for tailored management of complex real estate developments. However, their effectiveness relies on three pillars: a rigorous declaration of co-ownership, continuous collaboration between syndicates, and transparent communication with co-owners.

RECOMMENDATIONS FOR PROPER FUNCTIONING

• Each syndicate must strictly comply with its declaration (and amend it if necessary);
• Concurrent syndicates should, where possible, delegate a representative to the initial syndicate’s board;
• Each syndicate must limit itself to its own responsibilities;
• Syndicates may collaborate to obtain professional services at scale;
• Co-owners should attend both their own and the initial syndicate’s annual meetings;
• The initial syndicate should leverage its financial strength to consult professionals when needed;
• Attempts to separate phases should be abandoned, as dismantling such a structure is nearly impossible;
• Prospective buyers must understand the complexity of this model before committing.

Co-ownership with an initial syndicate and concurrent syndicates is a powerful tool for residential development, but a demanding one for its residents. It has contributed to densifying central urban areas with medium-sized, more affordable buildings, and for that reason alone, it should not be dismissed. However, developers must recognize that they are not merely constructing buildings, but must also ensure thorough planning and a solid legal framework, supported by experienced and competent professionals.

A text by Me Michel Paradis, Ad. E., partner at Therrien Couture Jolicoeur S.E.N.C.R.L. and president of the RGCQ – Québec chapter.

This text is taken from the Spring 2026 issue of Condoliaison, available in full to RGCQ members.