Definition : Director - Duty of honesty

Moral, legal or contractual obligation that is characterized by not deceiving and abusing someone's good faith. This obligation includes, in particular, the obligation not to appropriate the property of others. Article 322 of the Civil Code of Quebec requires the director of a legal person (e.g. a syndicate of co-owners) to be honest. A director cannot thus confuse the assets of the syndicate with his own.

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The law does not establish an exhaustive list of the duties and obligations that the members of the board of directors must assume. It is the declaration of co-ownership (constituting act of the co-ownership) and certain articles of the Civil Code of Québec which, for the most part, determine them. Furthermore, the administrators are considered to be agents of the syndicate. Directors must therefore act within the limits of the powers conferred on them by law and by the declaration of co-ownership. As such, they are required to act with care, diligence, honesty, loyalty, efficiency, fairness, and in the interest of the union.    
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The juridical personality of the syndicate is distinct from the one of the co-owners and directors. His acts are binding only on himself, besides for the exceptions provided by law. The faults committed by the syndicate have consequences only on its own civil liability and not on the directors. Under these conditions, they are held harmless by the syndicate and assume no responsibility for any costs, expenses, charges or losses they have incurred for the administration of the building and the syndicate. This is the basic principle, but it is important to bring several nuances to it. Indeed, a director must never lose sight of the interest of the community of co-owners.
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The director plays a leading role in a co-ownership. As a mandatary of the syndicate of co-owners, he ensures the smooth running of the immovable’s day to day business, which implies a working knowledge of the tasks related to this key function. As such, directors must act with prudence, diligence, honesty and loyalty. The members of the board of directors thus evolve in a legal environment where their personal liability can be sought as part of their mandate on behalf of the co-ownership as well as towards third parties. The civil liability of the directors with regard to the tasks incumbent upon them is largely ignored. Thousands of Quebeckers who sit annually on a board of directors, maybe including yourself, are unaware of this state of affairs.
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The director of a co-ownership is called to play a key role in the sound management of the co-ownership and preservation of the patrimony of the co-owners. To strengthen and maintain the relationship of trust with them, every director must be fair, honest and loyal toward the Syndicate and the co-wners. The director must also respect ethical standards and the Code of conductstipulated by the Civil Code of Quebec and the declaration of co-ownership. In case of doubt, directors must act according to the spirit of those principles and rules. They must also arrange their personal affairs in such a manner that they cannot interfere with the performance of their duties.
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As a result of the loss of control of the developer, we have just held the first meeting of co-owners to replace the director who had been appointed by the developer and elect a new board of directors.  However, this director has not reported on his administration since the publication of the declaration of co-ownership!  Even worse, we don't know what he did with the condo fees he collected. Question: What rights do we have against it?
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