Funds used to manage the day-to-day operations of the syndicate, including the maintenance and operation of common portions, and administrative duties.
The basis of the management of divided co-ownerships, the financing and accounting of syndicates of co-owners must be mastered both by those who must establish the accounts and by those who have to report to the co-owners. A syndicate of co-owners has the obligation to account for its operations by funds. The Civil Code of Québec requires the creation of a general fund, a contingency fund and in April 2022, the creation of the self-insurance fund. The creation of the early self-insurance fund is recommended. The general fund for current operations is also sometimes referred to as an administration fund or an administration fund.
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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Co-ownership work is of the utmost importance. Yet, they are more often than not overlooked by the syndicates of co-owners. Work that needs to be done in common portions can be minor or major in scope. Yet one needs money to pay for them. Good financial planning is therefore advisable in the medium and long term, so that the community of co-owners can adequately protect its real estate investment.
Replacing windows, the roof or rehabilitating the underground parking slabs, to name just a few examples, is usually very expensive. Three options are available to the syndicate to pay for this work: