The following question is asked to us regularly by the members of the board of directors of the co-ownerships, and even by the co-owners: “There is no one who would like to sit on the board of directors, so can we simply entrust the whole to a manager and let him take care of it?”
We have to answer this in the negative.
A co-ownership may be composed of as few as two dwelling units, but regardless of the size of the co-ownership, the law provides that the day-to-day management of the syndicate may be entrusted to a manager, chosen or not, among its co-owners. This manager acts as the administrator of the property of others being responsible for the mere management of it.¹ In the majority of cases, the deed of co-ownership gives the board of directors power to obtain the services of a manager and to fix the amount of his fees. The board of directors must provide the manager’s fees to the budget that it will submit to the annual general meeting of the co-owners for consultation.
On the other hand, the manager cannot take the place of the board of directors, even if no one agrees to sit on the board. The board of directors is one of the two decision-making organs of the syndicate, the other being the general meeting of the co-owners, and the status of the syndicate as a legal person requires that its affairs be administered by a board of directors.² Therefore, it is the board of directors that must take decisions that are not otherwise within the purview of the general meeting of the co-owners³ and it shall see to the proper administration of the affairs of the syndicate in compliance with the deed of co-ownership and the Civil Code of Québec. It must therefore be understood that the ultimate decision-making power in the context of the powers and duties of the board of directors must be exercised by the board of directors and not by the manager of the building, who reports directly to the board of directors.
The board of directors will determine the tasks to be entrusted to the manager: the complete management of the syndicate's operations (accounting, physical management of the premises, search for suppliers of goods and services, etc.), or simply selected tasks. Regardless of the scope of the tasks entrusted, the Board of Directors remains responsible for overseeing the work of the manager and must continue to exercise its decision-making authority. There must be close collaboration between the board members and the manager, who, we hope, will bring benefits from his experience in this area. The manager must implement the decisions of the board of directors insofar as they are not contrary to the deed of co-ownership or to the mandatory provisions of the law. In case of doubt as to which of the council or the assembly of the co-owners is the decision-making body competent to decide, the manager will have to suggest to the board of directors to obtain the opinion of a legal expert having experience in divided co-ownership.
There must be a relationship of trust between the board members and the manager: your manager should be an experienced person, with skills in supplier management, accounting and book keeping, negotiation, and management of employees where appropriate. However, the board should avoid micro-management. It remains important for the board to be kept informed of the evolution of the various tasks entrusted to the manager, but to do more will render the services of a manager unnecessary if the board prefers to dictate every detail.
Do not hesitate to contact us for advice from a lawyer working in the field of co-ownership on how to better understand your manager’s role and what is best practice in this field.