Interim director

The presence of a Board of Directors is mandatory in a co-ownership. It is the executive body of the syndicate and its legal representative. Its members act as the mandataries of the syndicate.

When a co-ownership is newly constituted, the declaration of co-ownership generally provides for the appointment of a interim director, who exercises the functions of the Board of Directors until the Meeting of co-owners appoints a new board of directors. Consequently, the obligations related to administration, listed below, apply to this director. 

Its appointment

Usually, it is the developer who designates him, in accordance with a provision in the declaration of co-ownership (By-laws of the Immovable). Often he appoints one of his  representatives to act as the interim director of the syndicate.

Duties and obligations of the interim director

The interim director assumes the same responsibilities and holds the same powers as any other administrator of a syndicate of co-ownership. He is required to administer and manage the co-ownership. As such, he must, minimally:

• Register the syndicate with the Registraire des entreprises du Québec (Quebec Entreprises Registrar) as soon as the declaration of co-ownership is published;  ;
• Enforce the declaration of co-ownership;
• Ensure the administrative and financial management of the co-ownership;
• Prepare the annual forecast budget of the co-ownership;
• Ensure that the forcast budget is adopted by the syndicate;
• Open a bank account in the name of the syndicate;
• Collect common expenses, including those owed by the developer, as soon as the declaration of co-ownership is published;
• Provide for the preservation of the immovable, the maintenance and management of common portions;
• Take out insurance covering the immovable against the usual risks, covering the entire immovable, excluding  improvements made by a co-owner to his portion;
• Obtain an evaluation (for insurance purposes) of the reconstruction cost of the immovable;
• Take out insurance covering the civil liability of the syndicate towards third parties, the directors and the president and the secretary of the general meeting of the co-owners and the other persons responsible for seeing to its proper conduct. ;
• Establish the agenda of the first Meeting of co-owners;
• Prepare, for the benefit of the co-owners, a rendering of account of its administration;
• Provide financial statements on the financial situation of the syndicate for the period in which he administered the syndicate, together with comments from an accountant;

 Contingency fund study

The efficient startup of a co-ownership requires a serious and realistic assessment of the contributions of co-owners to the contingency fund.  Theoretically, the interim director must take appropriate measures so that his forecast is adequate, and even seek the help of a building professional, such as, an architect, an engineer or a professional technologist.

A matter of ethics

In accordance with its mandate, the interim director must act in the best interest of the syndicate. Prudence, diligence, honesty and loyalty are prerequisites   in the exercise of his functions. He must put the interest of the co-owners before his own or that of the developer who appointed him, on pain of being personally liable.

If he finds any poor workmanship or construction defects in common portions, he must require from the developer and other persons involved in the construction of the immovable, the execution of corrective work. Moreover, it must ensure that the developer does not include in the budget of the co-ownership expenses that do not concern the operation of the syndicate. This is often the case so for construction site expenses (such as, electrical and cleaning costs).

Special transitional General Meeting

The interim director is required to call the "Special transitional General Meeting." This must be done within 90 days from the time the developer of the co-ownership no longer holds the majority of votes at the General Meeting of co-owners. During this General Meeting, the co-owners will have to choose one or more directors, in accordance with the provisions of the declaration of co-ownership. Their task will be, among others, to verify whether the interim administration was conducted in accordance with generally accepted standards.

Rendering of account

During the transitional General Meeting, the interim director must render an account of his administration by the presentation of  financial statements. This presentation is made by an accountant who comments the financial situation of the syndicate. His report will identify any potential irregularities.

Among the irregularities sometimes discovered, the developer may not have paid its contributions towards common expenses (condo fees) on unsold lots. Yet, he remains the owner until he sells them. His participation in common expenses is thus compulsory.

The rendering of account of the interim director is important because it allows co-owners:

• To obtain clear information on the financial situation of the syndicate;
• To exercise some control over the management of the interim director chosen by the developer;
• To strive towards the sound management of the syndicate, during the period when the co-ownership is under the control of the developer;
• To limit the risk of abuse on the part of the developer, in the administration and management of the co-ownership.

  WHAT YOU SHOULD KNOW! The interim director is the first director of a co-ownership. It must ensure the management of the co-ownership, pending holding the Special Transitional General Meeting.

WHAT TO KEEP IN MIND : The interim director must proceed - within 60 days from the registration  of the declaration of co-ownership in the land register – to the registration of the syndicate with the Régistraire des entreprises du Québec ( Registrar of  enterprises of Quebec ).

WARNING! The Insurance coverage for the co-ownership, which was subscribed by the interim director, must be taken out in favor of the syndicate. Its name must be written in the policy. Remember that it is neither the developer nor the hypothecary creditors who are the insured party, but rather the syndicate.

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