Le mardi 08 janvier 2008

Who can be a Director of the Co-owners’ Syndicate ?

By : Yves Papineau,

lawyer PAPINEAU AVOCATS inc.

Who can be a director? Like any other question regarding coownership, the answer can be found in the Quebec Civil Code and/or in the co-ownership’s declaration.

Section 1084 of the Civil Code reads as follows:

« The composition of the board of directors of the syndicate, the mode of appointment, replacement and remuneration of the directors and their other terms of appointment are fixed by by-law of the immoveable.

The court, on the motion of a co-owner, may appoint or replace a director and fix his terms of appointment if there is no provision therefor in the by-laws or if it is impossible to proceed in the prescribed manner.»

The Civil Code’s chapter on divided co-ownership does not include any other rule on this specific matter and therefore one must refer to its more general sections regarding legal persons.

Those sections do not say who can be a director but they specify who cannot:

« Minors, persons of full age under tutorship or curatorship, bankrupts and persons prohibited by the court from holding such office are disqualified for office as directors.» 1

Also, Section 329 of the Code states that a co-owner could ask a tribunal to prohibit a person from holding office as a director «if the person has been found guilty of an indictable offence involving fraud or dishonesty in a matter related to legal persons […]».

Each syndicate’s declaration of co-ownership must be consulted in order to get all the applicable conditions, eligibility rules, election and replacement procedures and the duration of the directors’ terms.

Since those rules and conditions will vary from one declaration to another, each one should be read in its entirety. People are mistaken when they believe that they’re all similar.

Unless the declaration of co-ownership says otherwise, here are some observations that should help rectify some misconceptions:  A legal person, such as a company, can be a director;  Spouses or life partners can both be elected on the same board of directors;  A director does not have to be a co-owner of the building in order to become a director;  Living in the building is not a requirement in order to be a director; Basically, apart from the restrictions that are mentioned in sections 327 and 329 of the Civil Code, a declaration of co-ownership can restrict the access to a director’s office as long as it does not discriminate among individuals in a way that is contrary to Quebec’s Charter of Human Rights and Freedoms.

CONCLUSION

Some myths still exist about hindrances or conditions that could prevent some persons to be directors. In any similar situation, the right answers can always be drawn from a good reading of the coownership’s declaration.

1 Paragraph 1 of Section 327 of the Quebec Civil Code