The financial guarantee of the manager

A manager generally has the responsibility of the accounting and financial management of the co-ownership. When the syndicate hires an unpaid manager, either a resident or an outside source, it is in its interest to prevent any type of deficient management, if not fraud. However, the absence of clear standards in relation with the management of the funds of the syndicate renders the syndicate vulnerable to misappropriation or unauthorized use of its funds.

Financial guarantees

Contrary to other jurisdictions, Québec has yet to adopt a Law for the protection of the funds of a co-ownership. Therefore, currently, the manager of a co-ownership which commits a financial fraud, misappropriates funds or declares bankruptcy can cause considerable damage to the group of co-owners. And nothing guarantees that the money which was embezzled will be reimbursed to the syndicate. In those situations, often, the manager has no financial guarantees. Consequently, you could lose the money that your syndicate of co-ownership has put in his trust.

“Ordre des administrateurs agréés du Québec” (the Order of Certified Administrators of Québec)

To limit unexpected surprises, the manager of the common property of the co-owners should be a member of the “Ordre des administrateurs agréés du Québec” (“Ordre des ADMA”). Its members are governed by rules of ethics, must maintain professional liability insurance, and a separate trust account for each syndicate. This professional order has put in place an indemnity fund in order to protect the public interest. This amount will be used to indemnify a syndicate of co-owners, in the case where it is proven that its manager has used the funds (of the syndicate) for other purposes than the ones for which it was destined.

 WHAT YOU SHOULD KNOW! The Civil Code of Québec does not impose to the managers of co-ownerships the obligation to supply a financial guarantee, to ensure the reimbursement of the funds which they might have used for an illicit purpose. It is the same situation for the professional liability insurance of the manager, which would cover the latter against its errors and omissions in the exercise of its duties.

 WHAT TO KEEP IN MIND: The managers do not give all the useful guarantees on the financial and competence plan. Therefore, a professional liability insurance of the manager covering their civil liability should be subscribed and maintained in favor of the syndicate, to minimize the damages caused by its faults.

 WARNING! Most insurers exclude from the coverage reprehensible actions, which include voluntary and fraudulent actions. In the case of a fraud or of the misappropriation by a manager, you will not be necessarily covered by insurance. You should therefore be vigilant and supervise your manager!


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