The day-to-day administration of the syndicate may even be entrusted to a co-ownership manager who may, but need not be, chosen from among the co-owners. The syndicate of co-owners can thus delegate to the co-ownership manager other tasks and responsibilities that are generally the responsibility of the board of directors (collect the syndicate's claims, publish a notice of legal hypothec on the fraction of defaulting co-owner, instituting legal proceedings for all matters concerning his administration, giving releases and discharges, etc.). Yet, anyone who is in charge of administering property that is not his own or that is not only his own assumes significant responsibilities. That is why - and notwithstanding the co-ownership manager’s best intentions- it is advisable to take out insurance to cover his faults, errors or omissions.
The second sub-paragraph of article 1085 of the Civil Code of Québec states that the "manager acts as an administrator of the property of others charged with simple administration". This provision is very useful as it makes it possible to clearly identify the manager’s powers and duties.
Any manager engages his personal liability, if he does not observe a duty of prudence and diligence in the execution of his mandate. Thus he may - whether remunerated or not - be on the receiving end of legal proceedings in case of a serious breach of his obligations. This could be the case of the manager who loses documents or causes damage to third parties or to one or more co-owners.
This type of insurance limits the financial consequences of the manager’s liability on his patrimony. It protects him by helping him to defend a suit, that is to say, it covers the insured’s defense costs (legal fees, expert fees and other court costs). And if he is held liable of having caused injury, the insurance will assume, at least in principle, the damages and other costs that the insured is required to pay as a result of a claim.
Obligation to take out insurance
Co-ownership manager's civil liability insurance will become mandatory in the near future (April 15, 2021). At this time, such insurance coverage is compulsory in several declarations of co-ownership. It covers the civil liability of the co-ownership manager towards third parties. The declaration of co-ownership can also specify the amount of coverage. This insurance is not only intended to protect the co-ownership manager, it also allows the syndicate and co-owners to be adequately covered, if a director is at fault, makes mistakes or omissions, or is negligent in the performance of his duties .
The civil liability policies of the manager do not cover all situations involving legal liability. They generally provide several exclusions, such as damage resulting from intentional misconduct, gross negligence, as well as acts of malfeasance, which are not generally covered.
WHAT YOU SHOULD KNOW ! By becoming a manager, you are exposed to certain risks that may involve your personal liability. It is therefore in your best interest to require the board of directors to take out liability insurance so that damage to third parties is covered by this insurance policy.
WHAT TO KEEP IN MIND : The syndicates of co-owners should take out liability insurance for the manager, in particular to increase the chances of people outside the co-ownership accepting this function.
WARNING ! Although the multi-risk insurance taken out by the syndicate generally provide for civil liability insurance coverage for directors, this coverage does not necessarily cover the actions of the manager. To avoid any uncertainty, the board of directors must ensure that the directors' civil liability coverage is extended to the manager.
CONSULT THE PUBLICATION : Condo Insurance: Everything you should know .