Definition : Contingency fund - Misappropriation of funds

Use without right, by the board of directors, of the contingency fund to make payments that are not related to major repairs and replacements of the common portions  of the building. At the request of a co-owner, the court may order a syndicate of co-owners and its directors to reimburse the sums misappropriated therein.

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At our last annual co-owner's meeting, the board of directors informed us that it was going to take $10,000 from our contingency fund to set up a self-insurance fund. To justify their decision, the directors said that this will allow to avoid putting up a special assessment. Several co-owners seemed to agree. Question: Can the board unilaterally decide to use part of the sums accumulated in the contingency fund to set up a self-insurance fund without consulting or obtaining the approval of the co-owners? And if so is this a good way to manage the funds of our co-ownership?
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  Your co-ownership is not immune to fraud. It may be defrauded by directors, co-owners, condo managers, service providers and third parties. Therefore, it is in your best interest to be wary of the behavior of potential suspects. You should not indulge in a witch hunt, however, some warning signs should arouse suspicion and command vigilance.    
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