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.
Every January or February, the manager, the accountant or the administrator of the co-ownership syndicate must complete, at the request of the co-owners concerned, the form TPZ-1029.MD.5-V for the tax credit for home support services for seniors. Completing this form requires an analysis of the accounting books to use only eligible expenses. This work can take a lot of time, depending on the volume of transactions of the condominium. It is tempting to charge the co-owner requesting this form a fair amount of professional fees for the production of the said document. Especially that in condominiums, the trend is according to the user-pays principle. Can we do it?
The statement of financial position, also known as the balance sheet, lists the assets, liabilities and net assets of the co-ownership syndicate at a specific time. It is a picture of the financial situation at a given date compared to other statements that usually cover a full fiscal year.
The statement of financial position shows assets on one hand and liabilities and net assets on the other. Assets are always equal to liabilities plus net assets. Everyone knows the famous quote "nothing is lost, nothing is created, everything is transformed". This principle is reflected in accounting. The statement of financial position is always balanced since the asset is financed either by the creditors (liabilities) or by the co-owners (the net assets).
The statement of earnings is essential for performance assessment and informed decision-making. This statement is expressly required by the article 1087 of the Civil Code of Québec. It states that the income statement, in addition to the balance sheet, the budget and the statement of debts and claims, must accompany the notice of the annual meeting.
CASH BASIS OF ACCOUNTING
A cash basis of accounting consist of recording the transactions of the syndicate when the receipt or disbursement related to the transaction occurs. It is a faithful reproduction of the bank statement, broken down into various asset, liabilities, income or expenses accounts. Moreover, instead of talking about income and expenses, one should speak of receipts and disbursements. This basis of accounting has many limitations.
May 19, 2015 - I am sometimes asked for how long documents filed in the co-ownership register should be kept by the syndicate. This is a fair question, since the legislator has given no explicit directions on this subject in the Civil Code.
It could be that its silence means, "You must keep everything, permanently !” As far as I am concerned, I rather lean in that direction.
Your condo does not necessarily need a Chartered Professional Accountant to present its financial information, whether it is the financial statements, financial forecasts or funding requests. Competent administrators or contractors supervised by the directors could do the job and present the required financial information.
The need however could however be felt if the owners have doubts about the work done, the skills or the honesty of the current administration. Internal reporting to co-owners may also be absent or deficient. It is also possible that the general by-laws require the production of certified financial statements.
January 27th, 2016. Among the various obligations imposed upon each and every Syndicate of co-ownership, there is a particular one worthy of note. It is the obligation to keep the list of the Syndicate’s co-owners and the books and registers necessary for the proper functioning of the Syndicate. This is easily understandable, since the Syndicate, as a moral person distinct from its members, has its own “corporate life” which must be properly documented. The Code also tells us that these documents are the Syndicate’s property and that the co-owners have access to them (Article 342 of the Quebec Civil Code).
December 14th 2015 - Besides seeing to the respect of the declaration of co-ownership, you as directors of a condominium must ensure the maintenance and conservation of the building. It is your uppermost duty and the majority of your tasks ensue from this fundamental obligation.
December 11th 2015 - The main duty of the board of directors in a condominium is to manage the Syndicate’s business. This means first to ensure the maintenance and conservation of the building, secondly to see to it that everyone respects every disposition of the declaration of co-ownership.