A conflict of interest between the association of co-owners and the trustee
Suppose the co-owners' association is involved in legal proceedings and in the process faces an unfavourable judgment. The general meeting then decides to file an appeal, but the trustee forgets to give instructions to the lawyer involved to do so. The trustee has clearly committed an error which involves his liability. Simultaneously, the trustee also remains the representative of the co-owners' association to claim damages. Clearly, in such situations, the trustee faces a conflict of interest.
The law provides a solution in case of a conflict of interest between the co-owners' association and the trustee. In this Wanted Fact, you will learn all about the provisional trustee.
The provisional trustee
In the situation of a conflict of interest between the co-owners' association and its trustee, a provisional trustee can be appointed in addition to the “primary” trustee. Of course, this is only the case when there is still sufficient confidence in the primary trustee, despite the latter's mistake (in our example). The assignment of this provisional trustee is then limited to a specific purpose, i.e. the matter in dispute and is also limited in time.
The provisional trustee acts alongside the primary trustee. The primary trustee remains competent for his general assignment, with the sole exception of the file where the conflict of interest exists.
As this provisional trustee is added alongside the ‘general’ trustee, a strict interpretation of its assignment as well as a precise definition of its duration and purposes is required.
The limited assignment of the provisional trustee entails that its liability is also limited to its actions within the limits of this temporary and/or specific assignment.
The appointment of this provisional trustee can be done in two ways, either by the general meeting or by judicial means.
Appointment of the provisional trustee
Article 3.89, §7 and §8 of the Civil Code provides for two methods of appointment for a provisional trustee.
One is that the general meeting can appoint a provisional trustee. The primary trustee must then convene the general meeting for an ordinary or extraordinary meeting. A vote on the appointment of a provisional trustee will then take place at this meeting. A simple majority is sufficient for this appointment.
In addition, the Justice of the Peace can also appoint a provisional trustee. This situation occurs, for example, if the general meeting does not agree on the appointment of a provisional trustee. Each co-owner therefore has the right to request this appointment from the Justice of the Peace. Since a judge appoints this provisional trustee, he is also a judicial trustee.
However, when a co-owner requests the appointment of a provisional trustee before the Justice of the Peace, it is required that the primary trustee is, on the one hand, prevented from carrying out his assignment or must, on the other hand, be in default of doing anything. It is therefore up to the court to decide which impediments or defaults are sufficiently serious to proceed with this judicial appointment.
An example from case law is the case where there were justified doubts about the accounts kept and the statement of accounts drawn up between the co-owners and the primary trustee. In this situation, the court appointed a provisional trustee for well-defined purposes, namely to review the disputes regarding the accounts as well as the trustee agreement.
Addition to the existing trustee
As this is a case of ‘adding’ a provisional trustee, it is thus necessary that a trustee already exists before the general meeting or the court appoints a provisional trustee.
The addition of the provisional syndicator creates a kind of division of powers between the two syndicates. The primary syndicator remains competent for its general remit, except for the limited task of the provisional syndic.
Contact Wanted Law!
Do you still have questions about conflicts of interest or would like more information on the appointment of a provisional trustee? Feel free to contact one of our Wanted Lawyers so that we can advise and assist you personally.