Refusal or withdrawal of membership with the Residential Construction Guarantee: the remedy

You receive correspondence from the Residential Construction Guarantee (GCR) informing you that your company's membership has been refused or withdrawn. Obviously, correspondence from the Régie du Bâtiment du Québec (RBQ) will follow shortly informing you of the withdrawal of your 1.1.1 or 1.1.2 license subcategories. Bad news for your projects in operation or about to start. Do you have recourse?

First of all, let's remember that joining the GCR is a regulated process, so the legislator enacts the 12 requirements that a person must comply with in article 78 of the Regulation on the guarantee plan for new residential buildings to apply for membership. The entrepreneur must also meet certain general admission conditions, namely a bond and compliance with financial criteria, which differ depending on whether the company is a type A or B¹. In addition, there may be specific requirements for a company that intends to work in the field of multi-family buildings owned in divided co-ownership of more than 5 private parts or other conditions (technical or monetary) depending on the solvency of the company or its ability to comply with the conditions mentioned in Regulation².

Once all conditions and requirements have been met, the membership will take effect from the moment the RBQ issues the appropriate license to the contractor and will be valid for a period of one year (unless otherwise specified). Thereafter, it will be up to the entrepreneur to send an annual renewal request to the GCR at least 30 days before the expiry date of his membership.

Moreover, the acquired membership may be withdrawn if various situations are observed (non-compliance with established conditions, false declaration, non-payment of contributions, non-compliance with quality criteria, etc.) so that the entrepreneur may be refused or withdrawn his membership on the basis of a variety of criteria.

This is why in the event of refusal or withdrawal of membership, the GCR is obliged to send the contractor a decision that is not only written and reasoned, but which must also be dated and contain the appeals and appeal deadlines provided for in the Regulation to contest.

In fact, in the event that the entrepreneur disagrees with GCR's decision to refuse or withdraw the membership, he may request that the fate of his membership be decided by an arbitrator in accordance with article 67 of the Regulation:

67. The administrator must submit to the arbitration mechanism determined by
this regulation when the entrepreneur appeals against a decision of
the administrator refusing or cancelling membership in the approved plan [...]

If applicable, the request for arbitration³ must be sent to an arbitration body authorized by the RBQ within 30 days of receipt by registered mail of the administrator's decision. Since the costs of the arbitration will be borne equally by the administrator and the contractor, the contractor will generally be required to provide a provision for costs.

Finally, although the hearing of the contractor's request for arbitration on his membership must begin within 15 days of its receipt, it should be noted that the arbitration request does not suspend the execution of the administrator's decision unless the arbitrator decides otherwise, so that the RBQ license could be withdrawn during the arbitration process even if the withdrawal of membership is contested.

In short, although arbitration is possible with respect to membership, the fact remains that in order to keep its sub-categories of licenses 1.1.1. or 1.1.2 active, the contractor has every interest in respecting the various criteria provided for in the Regulation and in being vigilant with regard to its membership renewals, the solvency of its business and the quality of its constructions.

DID YOU KNOW THAT?

The guarantee of a plan applies to a private portion that does not have a beneficiary at the end of the work on the common portions provided that the private portion is received within 24 months following this end of the work.

¹ A: Company working, partially or exclusively, in the field of residential building construction for less than 4 years, B: Company working, partially or exclusively, in the field of residential building construction for at least 4 years (articles 84 and 85 of the Regulation on the guarantee plan for new residential buildings.)

² For more information on membership, see sections 78 to 97 of the Regulation.

³ For more information on arbitration, see sections 106 to 131 of the Regulation.

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