Changes to the Regulation that came into force in 2025: no retroactive effect

The changes to Regulation on the guarantee plan for new residential buildings provided for in Decree 156-2014¹ of February 2014 came into force on 1 January 2015.

Therefore, the question arose: were the guarantees already in force enhanced by the entry into force of new regulatory provisions? After all, it did mention that these changes were effective immediately.

This question is legitimate, in particular with regard to certain existing guarantees that were not available before January 1, 2015 and which have improved the guarantee offered. For example, section 10 (6) of the Regulation, which now provides for an obligation to relocate when the building is no longer habitable while corrective work is being carried out, has no equivalent in the previous version of the Regulation. It is therefore an enhancement of the guarantee. Does it apply to guarantees that are already in force?

The Superior Court recently considered this question in the context of an application for judicial review of an arbitration award.² and concluded that” the decision to apply the amendment made to article 10 of the Regulation and which came into force on 1 January 2015 to the contract signed [in this case, in February 2014] is erroneous ”.

The Tribunal bases its reasoning on the contract signed between the parties at the time, which refers to a warranty plan that was approved by the Régie du Bâtiment du Québec and was in accordance with the version of the Regulation applicable at the time of its signing. In short,” At the time the contract was signed, neither the guarantee plan it contains nor the Regulation then in force entitles you to relocation costs after the reception of the building ”.

Therefore, by allowing beneficiaries to benefit from a new regulatory provision to their advantage, this would be equivalent to imposing on the Entrepreneur and the Administrator” an obligation that did not exist when the contract was signed or even when the building was built and delivered ”.

However, applying this new regulatory provision would consist in granting a” retroactive effect to the amendment to section 10 of the Regulations ”, while” the Act is presumed to have no retroactive effect unless otherwise specified ” and that there is no provision in the Decree that would allow such retroactivity to be concluded. In any event, even if that had been the case, the Tribunal recalls that” the Act delegates to the Régie the power to adopt regulations but not the power to adopt a regulation with retroactive effect ”, which shows that even if retroactivity had been provided for, it would have been done without right by the Régie.

In summary, the warranties in force for vessels constructed and delivered prior to the amendments to the Regulations are not affected by these amendments since this would be equivalent to modifying the contract signed between the parties when it was in compliance with the requirements of the Regulations at the time it was signed.

However, there is still reason to question the scope of these amendments with respect to private units in buildings owned in divided co-ownership when some units were sold before January 1, 2015 while others were sold after January 1, 2015.

1 It is this decree that introduces the “Regulation Amending the Regulation on the Guarantee Plan for New Residential Buildings”.
2 Pricewaterhousecoopers Inc. v. Desjardins, 2019 QCCS 513 (CanLII)

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