The presence of a Board of Directors is mandatory in a co-ownership. It is the executive body of the syndicate and its legal representative. Its members act as the mandataries of the syndicate.
When a co-ownership is newly constituted, the declaration of co-ownership generally provides for the appointment of a provisional administrator, who exercises the functions of the Board of Directors until the General Meeting of co-owners elects its first Board of Directors.
Usually, it is the developer who designates him, in accordance with a provision in the declaration of co-ownership (By-laws of the Immovable). Often he appoints one of his representatives to act as the provisional administrator of the syndicate.
Duties and obligations of the provisional administrator
The provisional administrator assumes the same responsibilities and holds the same powers as any other administrator of a syndicate of co-ownership. He is required to administer and manage the co-ownership. As such, he must, minimally:
Contingency fund study
The efficient startup of a co-ownership requires a serious and realistic assessment of the contributions of co-owners to the contingency fund. Theoretically, the provisional administrator must take appropriate measures so that his forecast is adequate, and even seek the help of a building professional, such as, an architect, an engineer or a professional technologist.
A matter of ethics
In accordance with its mandate, the provisional administrator must act in the best interest of the syndicate. Prudence, diligence, honesty and loyalty are prerequisites in the exercise of his functions. He must put the interest of the co-owners before his own or that of the developer who appointed him, on pain of being personally liable.
If he finds any poor workmanship or construction defects in common portions, he must require from the developer and other persons involved in the construction of the immovable, the execution of corrective work. Moreover, it must ensure that the developer does not include in the budget of the co-ownership expenses that do not concern the operation of the syndicate. This is often the case so for construction site expenses (such as, electrical and cleaning costs).
Special transitional General Meeting
The provisional administrator is required to call the "Special transitional General Meeting." This must be done within 90 days from the time the developer of the co-ownership no longer holds the majority of votes at the General Meeting of co-owners. During this General Meeting, the co-owners will have to choose one or more directors, in accordance with the provisions of the declaration of co-ownership. Their task will be, among others, to verify whether the provisional administration was conducted in accordance with generally accepted standards.
Rendering of account
During the transitional General Meeting, the provisional administrator must render an account of his administration by the presentation of financial statements. This presentation is made by an accountant who comments the financial situation of the syndicate. His report will identify any potential irregularities.
Among the irregularities sometimes discovered, the developer may not have paid its contributions towards common expenses (condo fees) on unsold lots. Yet, he remains the owner until he sells them. His participation in common expenses is thus compulsory.
The rendering of account of the provisional administrator is important because it allows co-owners:
WHAT YOU SHOULD KNOW! The provisional administrator is the first director of a co-ownership. It must ensure the management of the co-ownership, pending holding the Special Transitional General Meeting.
WHAT TO KEEP IN MIND : The provisional administrator must proceed - within 60 days from the registration of the declaration of co-ownership in the land register – to the registration of the syndicate with the Régistraire des entreprises du Québec ( Registrar of enterprises of Quebec ).
WARNING! The Insurance coverage for the co-ownership, which was subscribed by the provisional administrator, must be taken out in favor of the syndicate. Its name must be written in the policy. Remember that it is neither the developer nor the hypothecary creditors who are the insured party, but rather the syndicate.