Robert Pouliot
Adviser | Financial advisory

Amendments to Bill 141 of the Civil Code of Quebec imposes new obligations for co-owner syndicates.

You need to know what these obligations are and adequately prepare in order to properly protect your co-ownership in the event of an incident or disaster.

New provisions to better protect co-owners

Insurers need to differentiate between the value of a property at the time of its initial construction and the value added through improvements made by the co-owners of a unit.

In order to better protect co-owners, the government is now requiring the creation of a register of private portions that have not undergone any leasehold improvements resulting in an increase in value. These are called “reference units”. The value of a reference unit is determined according to its original or “base” condition and corresponds to the current cost of reconstruction.

The purpose of this provision is to identify improvements made by co-owners and thus determine whether a change made by a co-owner constitutes a leasehold improvement or a simple replacement of a component at the end of its useful life by a similar one.

Without this reference unit description or data sheet, the law presumes that there are no improvements to the private portions. Therefore, in the absence of the register, the insurer may not pay for improvements made by the co-owners.

In the event that leasehold improvements increase the value of the unit, the owner is required to personally purchase insurance to protect the value of the improvements. A second register or data sheet detailing the modifications to the unit is then required.

As for the reconstruction value of a reference unit, it is assumed by the insurance held by the syndicate of co-owners.

Reconstruction value of the building: a professional appraisal every five years

Another change to the law will be coming into force no later than June 13, 2022: every syndicate of co-ownership must have sufficient insurance coverage to ensure the full reconstruction value of the building. In the new version of article 1073 of the Civil Code of Quebec and according to decree 442-2020, syndicates are required to hire a member of the Ordre des évaluateurs agréés du Québec to appraise a building’s reconstruction cost.

In addition, the reconstruction value must include taxes, excavation costs and the fees of the various professionals involved in the reconstruction. The professional appraisal must be updated every five years. These updates must be sent to insurers in order to have the reconstruction cost indexed to its real value.

Get the right tools and advice

Unfortunately, all too often, co-owners’ syndicates are underinsured and bear the consequences of a disaster causing a total or partial loss. As a co-owner or representative of a syndicate of co-ownership, it is imperative to be aware of current laws and the possible repercussions.

Our real estate appraisal team is there to help you meet the new legal requirements and, of course, make sure you are adequately insured. Drawing on our skills and broad-based experience, we will produce the required reports for the reconstruction value of a building, a reference unit or leasehold improvements to a private unit.

Our professionals have extensive experience in the field of real estate valuations and are also able to assist you in other projects such as:

· Commercial, industrial and residential properties,
· Leasing properties (four units and up),
· Small farms,
· Seniors’ residences,
· Vacant land.

Whether or not your residential, commercial or industrial real estate project is a condominium, our professionals will provide you with recommendations adapted to your needs.

In addition, we are aware of the deadlines you are facing and are able to respond promptly and efficiently to your requests.

Do not hesitate to contact us for more information on your obligations under Bill 141 or any other real estate project.

This article was written with the collaboration of Daniel Bouchard, chartered appraiser.

19 Aug 2020  |  Written by :

Robert Pouliot is an appraiser and a consultant in real estate at Raymond Chabot Grant Thornton....

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Marie-Pierre Gérard
Senior Manager | PhD computational Mathematics | Digital and technology consulting

The pandemic has forced many businesses to speed up their digital shift. How can artificial intelligence help?

As resources become more scarce and distancing complicates their day-to-day, many SMEs have had to review their business plans and speed up their digital transformation while continuing to serve their clients. As long as they have the right approach, they can improve their efficiency by automating their business processes.

Business process automation; yes, but…

Before the pandemic, many players in the financial sector had already lined up their digital transformation projects by adopting a traditional business process automation (BPA) approach for their business lines. They even applied that to more complex projects.

Those projects always required a long, detailed roadmap and the process came with a great deal of challenges. Performance evaluation was often based on hypotheses and data could vary significantly in the short and long terms, thereby invalidating the target solution.

In the last two years, artificial intelligence solutions have gradually made their way into the BPA process. For example, the banks tried to predict consumer behaviours, plan their next steps, speed up document processing or increase their membership.

Many businesses tried to jump into exceedingly complex and costly transformation processes without seeing tangible results. And promoters and operational teams were getting frustrated. They believed that advanced analytical and AI solutions didn’t fit in with the teams’ day-to-day operations. That’s what stopped small businesses from investing in their digital transformation.

However, the current situation has forced businesses to demand more and to take control of their short-term performance. All of our clients are saying it; when it comes to modernizing their infrastructure, streamlining their business processes and data leveraging, they no longer have a choice. Business process automation is the way to go.

Breaking down business process automation for SMEs

The approach has evolved and businesses now want to put in place automation projects in a reasonable, iterative manner. They want to see every dollar invested generate tangible results in their teams’ day-to-day.

Here are the key success factors:

  • An iterative, transferable process-by-process approach;
  • A simple roadmap that describes the existing process and what will be automated and why;
  • A quick visualization of the end result by the promoter through a feasibility demo that includes business data presentation;
  • An AI-enhanced automation solution that’s developed and tested according to the regulations in place and rolled out within a few months.

For example, an insurance company can choose whether they want to start by automating policy processing, follow-ups and updates rather than automating their claims process end-to-end.

In an effort to improving efficiency and reducing human errors, certain clients—including law firms and HR departments in large businesses—are choosing to automate the repetitive portion of their paper documentation verification, research or processing process.

They use optical character recognition (OCR) techniques to improve robotic solutions in order to streamline and accelerate the processes and ensure reliability. This allows the teams to spend more time on value-added tasks.

Digital transformation projects in SMEs are successful when there’s a balance between process-focused automation and data-reliant artificial intelligence. They yield tangible results and can facilitate the operational integration of automated processes.

In short, access to data and how it is interpreted and structured, and automating repetitive human tasks help optimize previously specified business processes. Automation will be logically coded according to applicable business rules. This data leveraging will then make it easier to apply the learning model.

An AI model requiring specific training will then help develop this automation process which will allow for less complex analyses, including document reading and the extraction of relevant information from semi-structured data. The model will accurately decode the information to be extracted using various document types and formats.

Uniting and training the teams to work with the new models

The new models are extremely effective but only if the operational team accepts and welcomes the new players into their day-to-day. They will not be successful without proper training and learning and increased efforts to ensure the solution is fully operational and used and maintained daily.

Everything must be known and included: team learning, knowledge of what the robot can and cannot do, execution programs, error management, new actions from team members, etc. A routine must be established both with the marketing teams and the IT and support teams.

A project of that scale can only work if we look at the big picture. Automation is applied where needed and where its value can be targeted and rapidly delivered. At the same time, it helps integrate more complex technologies such as artificial intelligence—machine learning, natural language processing, interactive capabilities—and makes those involved in the process more efficient. Choosing the type of process to implement is not necessarily complicated; what businesses need to focus on is how to integrate the enhanced automated process and secure buy-in from their team.

Even if businesses had to review their business strategies to survive the pandemic, they had to refocus on what’s important and on getting measurable results. Navigating the digital shift by integrating artificial intelligence into their business processes is an effective, viable solution not only for large businesses, but for SMEs in particular.

19 Aug 2020  |  Written by :

Marie-Pierre Gérard is a digital consulting expert at Raymond Chabot Grant Thornton.

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The International Accounting Standards Board (IASB) has issued Amendments to IFRS 17 (the Amendments). The aim of the amendments is to address the concerns raised by stakeholders and help entities to more easily transition and implement IFRS 17 Insurance Contracts.

The IASB also issued an amendment to the previous insurance Standard IFRS 4 Extension of the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4) so that entities can still apply IFRS 9 Financial Instruments alongside IFRS 17.

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With the pandemic, telework was introduced at a breakneck speed in many organizations, which have seen their IT security risks increase.

Attempts at phishing, ransoming and other data theft or malicious traffic disruptions have increased as fraudsters are taking advantage of the vulnerabilities resulting from people working from home.

In order to avoid high costs for your organization and the loss of customer confidence, it is essential to secure your data, monitor your networks’ security and have a cybersecurity plan to effectively and quickly respond to and mitigate cyber attacks.

To help you assess the situation, here are five aspects to keep in mind to ensure that your organization is minimizing its IT risks.

1. Adopt a policy on the use of computer security equipment

Make sure that all devices being used, including mobile devices, are designated for the worker and used only for the worker’s job. Additionally:

  • Use a virtual private network (VPN) that secures access through encrypted authentication and encrypts sensitive data;
  • Limit users’ ability to add applications through whitelisting (preapproved security applications) by controlling installation permissions;
  • Provide a firewall—a barrier that filters incoming and outgoing data;
  • Protect your networks and devices with a professional IT solution;
  • Use a mobile device management solution to protect mobile devices from loss, theft, damage and unauthorized access;
  • Ensure that all devices (personal or business-owned) that remotely connect to the entity’s resources meet the security requirements of the information security policy: for business-owned devices, the IT department must ensure that only software authorized for use on the entity’s resources is installed.

2. Safeguard data access

Make employees aware of the importance of best practices and implement secure user authentication mechanisms:

  • Consider using multi-factor authentication (MFA) for all high-level access and access to sensitive data, applications and mission-critical environments;
  • Include a screen saver with automatic lockout;
  • Install regular automatic updates to anticipate security breaches;
  • Disable wireless access to unused devices;
  • Put advanced antivirus and anti-malware software on all devices that have access to the entity’s environment and data;
  • Ensure that all sensitive data communications are encrypted (including email communications).

3. Train employees on working remotely

Provide ongoing training to make employees aware of key security issues and remind them of good practices:

  • Detecting fraudulent emails and phishing attempts;
  • Using a strong password;
  • Never leaving a device unattended;
  • Using a secure wireless network;
  • Quickly contacting a resource person in case of a security issue, such as a lost device or detection of a problem (provide emergency contact information).

4. Protect information and store it in a secure environment

This is important at all times, but when everyone is working from home, the stakes are even higher: it is essential to provide a data backup environment.

  • Back up data regularly by making copies that are stored securely and, ideally, in a cloud environment so that they can be accessed from any secure device;
  • Limit employee access to the information they need to do their jobs. Limit access to the required individuals only or, in accordance with the “minimum privilege” principle, to minimize the risk of unauthorized access to sensitive data;
  • Ensure that sensitive information is encrypted (e.g. intellectual property, personal identification information, registered credit card numbers, health care data): only access secure sites (HTTPS protocol) using devices provided by the employer.

5. Prepare a contingency plan: respond, manage, mitigate and recover

Whatever their size, all organizations are at risk of one or more cyber attacks during their lifetime. Unfortunately, this is even more so in this day and age, as malicious individuals are taking advantage of teleworking to infiltrate loopholes. It is essential that you have a contingency and risk prevention plan in the event of phishing, ransomware or other fraudulent attacks to:

  • Assess potential threats;
  • Closely monitor attack attempts;
  • Anticipate the measures to be taken to protect your systems and data;
  • Ensure that records are captured and monitored;
  • Rely on professionals to anticipate risks and assist you in monitoring and responding to cyber attacks.

Keep your business out of the reach of fraudsters. Contact our cybersecurity experts. They can offer solutions adapted to your organization and the assistance you need.