The By-laws of the immovable generally provide all the director’s office specific provisions, including the duration of his term of office. If the By-laws are silent thereon, the legal term of one year will apply, in accordance with section 339 of the Civil Code of Québec, which specifies that “At the expiry of that period, their term continues unless it is revokedˮ. A director usually remains in office until the next annual general meeting of the co-owners, who will proceed to a re-election.
Sound and efficient administration: How to achieve it?
In order to ensure the stability of the Board of Directors and the continuity of its member’s actions, it can be beneficial that a syndicate of co-owners provides in the By-laws of the immovable the “staggered renewal of the elected directorsˮ, such as two-year terms, along with an annual election. For instance, in a five-member Board of Directors:
Thus, it ensures that, from year to year, directors serving during the previous mandate are still in office. This formula is ideal as it favors a form of stability in the administration of the co-ownership, and it nourishes the syndicate’s memory over time. The sudden transition from one board to the next can be brutal, because a syndicate is self-deprived of an otherwise profitable transition phase.
The term of office of a director ends:
A resignation is the act by which an administrator relinquishes his office and ends it voluntarily, prematurely. This act is effective upon signature, or often 30 days later, according to the declaration of co-ownership. To do this, the administrator has to submit his resignation to the President of the Board of Directors. However, his decision must be carefully considered. It shall not be taken at an inopportune moment and be detrimental to the proper operation of the co-ownership, failing which the resigning director could be liable for damages (if any) caused by his decision.
The reasons to resign are varied, such as health or work-related reasons (overwork), relational problems with other members of the Board of Directors, or because a director has sold his apartment. This right is generally not predicated upon any condition such as the prior acceptance of the resignation by the Board of Directors or his replacement by another director. The resigning member must ensure that a current updating statement is filed promptly so that his name no longer appears (as a director) at the “Registraire des entreprises du Québec (REQ)” (Quebec Enterprise Registrar).
During his term of office, any director may be removed from office by the general meeting of the co-owners or by the person who appointed the director, for example a developer removing his interim director. Where such power is vested in the general meeting of the co-owners, removal requires the adoption of a resolution. A vote may be taken at a special general meeting or at an annual general meeting in the event that the director's term of office has not yet expired.
Disqualification and replacement
Any co-owner who has not paid his share of the common expenses for more than three months, is disqualified for the office of director. He then becomes unfit to sit on the board of directors and to perform any legal act in this capacity (e.g. an act of a conservatory nature). Such disqualification ceases as soon as he has paid all the common expenses due. He may then once again be elected as a director.
The syndicate can replace a director who, being co-owner, neglects to pay his contribution to the common expenses.
Vacant director position
If a director’s position becomes vacant, the By-laws of the immovable stipulate its replacement’s provisions. However, if the declaration of co-ownership is silent on this issue, section 340 of the Civil Code of Québec applies as a default clause: “Directors fill the vacancies on the board. Vacancies on the board do not prevent them from acting; if their number is less than a quorum, the remaining directors may validly convene the membersˮ.
WHAT YOU SHOULD KNOW! In the event of the resignation or removal of a director, the procedure set out in the By-laws of the immovable must be followed. The latter may provide that the directors still in office shall choose the substitute, or that a special general meeting must be convened to elect one.
WHAT TO KEEP IN MIND! The director’s duty of loyalty to the syndicate is unfailing. If he wishes to withdraw from the Board of Directors, he should do so while respecting a reasonable prior notice, so that his resignation may not be considered faulty.
WARNING! The resignation of one or more members of a Board of Directors often reveals that the co-ownership is in crisis. In such cases, it is likely that things are in disarray between the directors or between co-owners and the Board of Directors.
CONSULT THE PUBLICATION: Administrateur de condo, Tout ce qu'il faut savoir (Condo Director, All you need to know)