The provisions related to the appointment and replacement of the directors are provided for in the By-laws of the immovable (2nd part of the declaration of co-ownership). In their absence, they are also found in the Civil Code of Quebec (C.C.Q.). The law thus leaves it to the co-owners to establish themselves, in their declaration of co-ownership, the rules that best suit them. However, the appointment of directors generally falls within the competence of the general meeting of co‑owners, although the declaration of co-ownership may provide for other provisions.
When a co-ownership is newly constituted, the declaration of co-ownership usually provides for the appointment of a provisional director. The latter carries out and assumes the duties and responsibilities that rest upon the board of directors, until the general meeting of the co-owners elects new directors.
The most common form of appointment (at the Annual General Meeting) is the election of directors by the co-owners or their proxies. Insofar as an election is concerned, the By-laws of the immovable deal with nominating procedure and the required majority, so that a candidate can be elected a director. An absolute majority is required in most instances, i.e. the majority of the votes cast by the co-owners present or represented at the general meeting. In the event this condition is not fulfilled, more than one ballot may be required to elect the directors. This question is explained in detail in the factsheet: The majorities required in general meetings.
Each director is elected individually by a separate vote. However, if the general meeting is in agreement and the number of candidates is equal to the number of seats to be filled, a block election is possible by the means of a resolution submitted to a single vote.
The election of directors is not the only method of appointment. For example, the composition of the board of directors in a mixed co ownership is often characterized by the fact that the commercial unit’s co-owners may appoint one or more directors to the Board of Directors. This ensures the commercial units minimal representativeness of on the board.
In large co-ownership complexes comprising many immovables structured as a "co-ownership by phases", the initial declaration of co-ownership often stipulates that a director representing each of the syndicate of co-owners- constituted under a "Concomitant declaration of co-ownership "- acts ex officio on the Board of Directors of the "large syndicate ", being that of the initial.
Furthermore, in small immovables with two or three apartments, it is also often provided in the declaration of co-ownership that the owners of each private portion designate a director.
Terms and conditions of presenting its candidacy
The co-ownership directors are often co-owners, but the law does not prevent a third party from being appointed a director. However, the declaration of co-ownership can provide for a contrary provision, so that a director is obligatorily one of the co-owners of the immovable.
The function of director is not accessible to a bankrupt or to a person to whom the court prohibits its exercise. The same usualy holds true of minors and persons of full age under tutorship or curatorship. The By-laws of the immovable may provide for other restrictions, such as prohibiting couples (spouses or common-law partners) from sitting on a Board of Directors at the same time.
At no time can the general meeting of the co-owners elect someone who has not presented his candidacy. It is therefore advisable that every candidate for the position of director be present on the day of the meeting, so that he can give his assent. If he is absent, the latter may confirm his intention, by means of a written notice given beforehand to the president of the meeting.
Appointment by the Court
Sometimes the general meeting of co-owners condominium fails to elect the members of the Board of Directors, for lack of candidates or of obtaining a sufficient majority of votes. This situation must be mentioned in the minutes of the general meeting. The syndicate or the co-owners may, in such cases, require the court to appoint or replace one or more directors and to fix the conditions of their office. Generally, the nominees (e.g., professional managers) will act for a fee.
The appointment of the Board of Directors’ members shall be recorded in the general meeting minutes. It must also be brought to the attention of third parties, bearing in mind that it must be registered with the Registraire des entreprises du Québec(Quebec Enterprises Registrar). Without limitation, it makes available to the public the syndicate of co-owners’ existence and essential information. This information includes information relating to the members of the Board of Directors, namely:
Once registered, the syndicate is required to update the information contained in the Registraire des entreprises, such as when there is a change in its situation, or it wishes to modify information. The update must be carried out with one of the following documents:
WHAT YOU SHOULD KNOW! The court may, at the request of any interested person, prohibit the exercise of the function of administrator of a syndicate of co-owners to any person found guilty of a criminal offence involving fraud or dishonesty in a matter related to legal persons. This prohibition also applies to any individual who repeatedly violates the laws relating to legal persons or fails to fulfill his director’s obligations.
WHAT TO KEEP IN MIND: The By-laws of the immovable establishes the nominating procedure for potential directors. It also defines the candidates’ qualifications and prerequisites to hold the position, as well as the duration of the mandate and any other rules to which they may be subjected (e.g. number of administrators, appointment and replacement procedures and remuneration).
WARNING! The election of directors who have received the largest number of votes, without obtaining an absolute majority (more than 50% of the votes of the co-owners present or represented), is invalid, unless the declaration of co-ownership permits an election under these conditions.