Civil liability

The civil liability of a director for the tasks incumbent upon him is largely unrecognised. It should be noted that failure to act with prudence, diligence, honesty and loyalty in the performance of his duties may engage his personal liability. A director must always keep in mind the interest of the co-owners' community. Thousands of Quebecers who sit on an annual basis on a Board of Directors, such as yourself perhaps, are unaware of this reality.

 

Multiple risks

Insofar as the commitments and obligations of the syndicate are concerned, directors do not (in principle) incur any personal liability. Nevertheless, it could be invoked for faults and omissions committed during their mandate, whether remunerated or acting as volunteers. Without limitation, a director could be held liable for:

Other elements

Fraudulent practices, bad faith, abuse of right and contravention to a public order rule are other elements that may bring into play the director’s personal liability.

Recourse

If he fails to comply with the obligations prescribed by Law and the declaration, a director may be required to pay for the damage suffered by the syndicate, co-owners or third parties. This liability can be invoked, by virtue of the mandate given to him to administer the co-ownership. The same applies when a director fails to carry out the work necessary for the preservation of the immovable. Co-owners may also invoke the liability of a director in the event that his fault has caused them injury. For example, a director could be held liable for failing to insure the immovable adequately.

Consequences

Once his personal liability is engaged, the director is exposed to be sued in damages. In such cases, he would be obliged to assume (personally) the economic losses resulting therefrom. The injury must nevertheless be a direct consequence of the alleged fault. For these reasons, before offering its candidacy to act as a director, it is essential to ensure that the syndicate has taken out third party liability directors insurance.

Solidary liability

The director is accountable for his actions. As a party to the resolutions adopted by the Board of Directors, he engages his personal liability. If he does not want to be held liable for a decision taken by the Board of Directors, he must dissociate himself by recording his dissent in the minutes or its equivalent (Article 337 of the Civil Code of Québec). In addition, a director absent from a board meeting is presumed not to have approved the decisions taken at that meeting.

Level of liability

Even if you are an unpaid volunteer director, you may incur civil liability, just as if you were remunerated, although generally the extent of the damages caused by a volunteer is assessed less rigorously by the courts.

 

 WHAT YOU SHOULD KNOW! The failure of the directors to insure the immovable adequately may be considered a breach of their duty to act with prudence and diligence towards the syndicate. Insurers generally do not cover directors for this fault. In such cases, the directors at fault would be exposed to be required to indemnify, from their own funds, the injured co-owners and third parties.  

 WHAT TO KEEP IN MIND:  The mandate of a director, whether a volunteer or remunerated, is neither a favor, an honor, nor a hobby: it is a responsibility, to be taken very seriously. A director is the equivalent of a politician: he must serve others, not himself and assume his responsibilities adequately.

 WARNING!  In a decision rendered in 2014, the Court of Québec held three syndicate directors personally liable. Although the financial stakes were modest, this case demonstrated that directors who refuse to submit a claim to the syndicate’s insurer to the detriment of the co-owners can engage their own liability.

 CONSULT THE PUBLICATION: Administrateur de condo, Tout ce qu'il faut savoir (Condo Director, All you need to know)

 

Back to the super factsheet ''Director''