Provisional administrator

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 provisional administrator, who exercises the functions of the Board of Directors until the General Meeting of co-owners elects its first Board of Directors.

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 provisional administrator of the syndicate.

Duties and obligations of the provisional administrator

The provisional administrator 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);
• Enforce the declaration of co-ownership;
• Ensure the administrative and financial management of the co-ownership;
• Prepare the budget forecast of the co-ownership;
• Open a bank account in the name of the syndicate;
• Collect common expenses and the contingency fund contributions from all co-owners, including those owed by the developer;
• Provide for the preservation of the immovable, the maintenance and management of common portions;
• Take out insurance covering the immovable against the usual risks such as fire and theft, covering the entire immovable, excluding  improvements made by a co-owner to his portion;
• Obtain an evaluation (for insurance purposes) of the replacement value of the immovable;
•  Take out insurance covering the civil liability of the syndicate towards third parties and the civil liability of the directors, if in the latter case, the declaration of co-ownership requires it ;
• Establish the agenda of the first General Meeting of co-owners.

 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 provisional administrator 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 provisional administrator 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 provisional administrator 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 provisional administration was conducted in accordance with generally accepted standards.

Rendering of account

During the transitional General Meeting, the provisional administrator 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 provisional administrator 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 administrator 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 provisional administrator 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 provisional administrator 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 provisional administrator, 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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