The concept of “new” in buildings: not easy to define

The subjection of a residential building to the New Residential Buildings Guarantee Plan Regulation depends on several criteria¹. Some of these criteria relate to the building as such.² while others concern the purchaser³. The Regulation even goes so far as to provide that coverage is conditional on the building being intended for primarily residential purposes. In addition to all these criteria, there is one that seems obvious: the building must be “new”. However, although the term “nine” is emphasized in the title of the legislation, there is no definition of the term in the Regulations. What exactly is the situation? What is considered a new residential building?

As surprising as it may seem, the Regulations do not define the term “nine” any more than the Building Act. In the absence of a definition, one must fall back on doctrine. On this subject, as soon as the first versions of the Rules came into force, the authors Doyon and Crochetière⁴ were of the opinion that although no definition was specified, the term should be interpreted in its usual meaning although it should also be interpreted comprehensively. In other words, buildings that have been restored (a factory converted into a condominium, for example) or modified (to which an annex would be added) are not “new” within the meaning of the Regulation and are therefore not subject to it since the restoration and modification of a building are distinct from the construction of a new building.

Another clue to discover its meaning: in September 2017, the information available on the Régie du Bâtiment du Québec website indicates that “the mandatory guarantee plan applies only to completely new buildings.⁵.”

However, although it may seem simple, the Administrative Labour Tribunal⁶ nevertheless had to address, in a recent case, an issue arising from the new character of a building. In this case, the contractor maintained that the building was not “completely new” since a portion of the foundation of the neighbouring building was incorporated into the foundation of the building under construction.

It was only after studying the plans and based on expert testimony that the Tribunal was able to conclude that although “the scope of application of Regulation on the guarantee plan for new residential buildings does not in any way refer to the modification or transformation work relating to an existing residential building, or the work that consists in erecting such a work on an existing foundation”, the building at issue was subject to the Regulation since it was designed to support its own load regardless of the existing portion of the foundation, so that this pre-existing portion was not part of the structure of the building.

In short, as simple as the term new may seem, the wise contractor will have every interest in validating with the competent authorities whether or not a building whose construction is proposed is subject to the Regulations.

DID YOU KNOW THAT?
For each housing unit registered with the administrator, a contribution must be made to the Guarantee Fund. The RBQ is the manager of this fund. The amounts constituting this fund are held in trust by the RBQ and deposited with the Caisse de Dépôt et Placement du Québec. Authorized investments are those provided for in the Caisse's secure portfolios that the RBQ chooses according to an investment policy.

¹ For this purpose, see article 2 of the Regulation.
² Owned in divided co-ownership or not, the type of building itself (single-family (isolated, semi-detached or in a row), multi-family (from duplex to quintuplex), multifamily comprising at most four superimposed private portions).
³ Some exclusions apply to buildings acquired from a trustee, a municipality or a mortgage lender by contractor, or buildings acquired by a client who is an NPO, a cooperative or a housing office are excluded.
⁴ Gilles DOYON and Serge CROCHETIÈRE, The regulation on the guarantee plan for new residential buildings commented, Cowansville, Les Éditions Yvon Blais inc., 239 pages.
⁵ https://www.rbq.gouv.qc.ca
⁶ 9333-9034 Quebec Inc. v. Quebec Construction Commission, CM-2017-4512.

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