Convening A General Meeting Of Co-Owners / Condo Law

CONVENING A MEETING OF CO-OWNERS

Contact the author : s.fiset@fisetlegal.com

It is mandatory for all co-ownerships to hold a general meeting of co-owners each year[1]. The annual general meeting informs co-owners of the financial status of their holdings, consults the co-owners on the budgets, permits them to elect the members who will form their board of directors, and to exchange and debate decisions which are theirs to make.

As required, special meetings (extraordinary) may also be necessary during the year.

Under the terms of article 345 of the Civil Code of Québec, it is the responsibility of the board of directors of the syndicate of co-ownership, or following its directives, to convene the meetings of the co-owners. Meanwhile, article 352 C.c.Q. provides that co-owners also have the power to convene a meeting :

« If they represent 10% of the votes, members may requisition the directors or the secretary to convene an annual or special general meeting, stating in a written requisition the business to be transacted at the meeting.

If the directors or the secretary fail to act within 21 days after receiving the requisition, any of the members who signed it may convene the meeting.

The legal person is bound to reimburse to the members the useful expenses incurred by them to hold the meeting, unless the meeting decides otherwise. »

For all practical purposes, this article would generally be used in the event that grounds existed for holding a meeting and the board of directors refused to act. The percentage of votes required under the terms of this article may differ according to the terms set out in the declaration of co-ownership providing that the rights of the co-owners are protected (article 334 C.c.Q.).

PROCEEDINGS FOR CONVENING A MEETING

There may exist certain particularities in the terms of the declarations of co-ownership however, in general, the procedure for convening a meeting is quite standard. One must first :

• State the reasons for the meeting and determine if it is an annual general meeting or a special meeting (extraordinary);
• Draw up a list of topics to be addressed, which will form the agenda;
• Determine the place, date and time of the meeting.[2] Verify the required delays[3];
• Assemble the documents to be discussed during the meeting;
• Ensure you have an updated list of all the co-owners of the building.

Once these steps are completed, you are ready to prepare and send out your Notice calling the Meeting.

Under the terms of article 346 of the Civil Code of Québec, the Notice calling the Meeting will inform the participants that an annual general meeting will be held (obligatory, following the close of the financial period[4]), or a special meeting (extraordinary), the date, place and time at which the meeting will be convened and the topics to be addressed.

Each and every individual co-owner (holding a deed in the co-ownership) should receive the Notice to calling a Meeting at the address they have registered with the syndicate. What about co-owners who have lost their right to vote ?[5] They must also be convened to the meeting. It would be well advised to inform them of the loss of their right to vote and to encourage them to remedy the situation when sending the notice to convene the meeting.

In order to avoid the possibility of having the meeting nullified by a co-owner who did not receive the Notice to calling a Meeting, and for your records, it would be wise to protect oneself by obtaining a proof of reception by either sending the Notice registered mail, hand delivering with signature acknowledging receipt, by email with proof of reception or by telefax. One or several of these methods may be stated as obligatory under the terms of your declaration of co-ownership. If this is the case, these instructions will prevail and you are bound to conform to them.

Unless otherwise stated in the declaration of co-ownership, the Notice to calling an annual general meeting must be distributed to co-owners at least 10 days, but not more than 45 days, prior to the meeting.[6]

If it is absolutely urgent and it is necessary to convene a special meeting without delay, a shorter lead-time could be reasonable. If the co-owners are all present or represented, they may also waive the convening notice (article 353(2) C.c.Q.). A written resolution, signed by all the co-owners, may also compensate for such a situation (art. 354 C.c.Q.). What is of primary importance is to act in the common interests of all the co-owners.

DOCUMENTS TO BE SENT WITH THE CONVENING NOTICE

When an annual general meeting is convened, it is stipulated under the terms of the Civil Code of Québec[7] that the Convening Notice should include the following documents:

• The Agenda[8];
• The Financial Statements :
  • Income statement;
  • Balance sheet;
  • Statement of payables and receivables;
  • Budget forecast;
• The proposed modification(s) to the declaration of co-ownership[9];
• A note on the essential terms of the proposed contracts and the planned projects;
• Proxy forms (recommended).

The distribution of the documents mentioned above will prepare co-owners in advance so they can be well informed and make the right choice on the « decisions » which they will be debating. This is the reason for transmitting this information, taking into account the appropriate circumstances.

Only the items listed on the Agenda will be discussed during the meeting. The co-owners have a delay of five (5) days following reception of the Convening Notice to notify the Board of Directors of any questions to be added to the agenda. When this delay has lapsed, unless all the co-owners entitled to be convened are present and consent (art. 348 C.c.Q.), the Agenda is « closed ». The additional questions or topics added to the agenda will be sent to co-owners before the meeting is held. Article 1088 of the Civil Code of Québec states that :

« Within five days of receiving notice of a general meeting of the co-owners, any co-owner may cause a question to be placed on the agenda.

The board of directors gives written notice of the questions newly placed on the agenda to the co-owners before the meeting. »

The documents which accompany the Notice calling a special or extraordinary meeting depend on the nature of the meeting. For example, pertinent documents related to a proposed amendment to the declaration of co-ownership could be included, so that co-owners may be prepared to exercise their decision making power.

QUORUM AND ADJOURNMENT

If quorum for the meeting is not reached, the meeting will be postponed to a future date. In fact, article 1089 states :

« Co-owners holding a majority of the votes constitute a quorum at general meetings.

If a quorum is not reached, the meeting is declared adjourned to a later date, notice of which is given to all the co-owners; 3/4 of the members present or represented at the second meeting constitute a quorum.

A meeting at which there is no longer a quorum shall be adjourned if a co-owner requests it. »

All co-owners must then be advised of the revised date of the meeting.

* * * *

It is essential for a syndicate to respect the terms of the Civil Code of Québec and of the declaration of co-ownership as to the protocol for convening a meeting as described above. If not, the administrators and the syndicate would be remiss in their responsibility and this could result in having to pay damages to those who would claim prejudice or even worse, could result in a meeting being nullified if it is seen as biased, held with the intention to cause prejudice to co-owners or be in contempt of their rights. This last legal action must be taken within sixty (60) days following the meeting (art. 1103 C.c.Q.).

Whether it is a general or special meeting, it is possible to obtain assistance from a professional who specializes in co-ownership law, which will ensure that you meet all necessary requirements when convening your meeting. Some may offer, upon request, training and samples of a Notice to Convene a Meeting, Budgets and proxy forms

Good luck !

The information provided on this page is general in nature and cannot compensate for the need to obtain legal advice specific to a particular situation.

[1] See also : articles 339, 345, 346 and 1072 of the Civil Code of Québec

[2] At the discretion of the syndicate, subject to the provisions of the declaration of co-ownership.

[3] For an annual meeting, the terms of article 345 C.c.Q. provide that a delay of 6 months following the end of the financial period or, according to the provisions in the terms of the Building By-Laws of your declaration of co-ownership, a delay of generally at least 90 to 120 days of the closing of the financial period.

[4] Article 345 and 334, al. 2 C.c.Q.

[5] A co-owner is deprived of his voting rights if he has not paid his share of the common expenses or his contribution to the contingency fund for more than three (3) months. (see article 1094 C.c.Q.)

[6] Article 346 C.c.Q.

[7] Articles 347 and 1087 C.c.Q.

[8] See our text « Running an effective meeting of co-owners » according to the agenda.

[9] Or, where applicable, a detailed resolution outlining these.

Mise à jour le Samedi, 16 Août 2014 17:01