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19/08/2026Wire Fraud in a Condominium Syndicate
Wire fraud is increasingly targeting divided co-ownership syndicates. Fraudsters impersonate a board member, condominium manager or supplier and obtain an “urgent” wire transfer to a controlled account. Within minutes, the common funds disappear and the syndicate is left with an unexpected deficit.
This article will help you recognize warning signs, put internal controls in place and know how to respond if a fraudulent wire transfer has been executed. We review the board of directors’ responsibilities, sound document-management practices (minutes, statement of condition) and the impact on condo fees and assessments. For more practical resources, visit our blog.
SEO note: we discuss “syndicate wire fraud” here to equip boards of directors.
Recognizing wire fraud: typical scenarios and warning signs
The most common schemes target the payment-approval chain. The fraudster pretends to be the board president, a treasurer or a condominium manager and requests a “discreet and immediate” wire transfer. Sometimes, the fraudster impersonates a contractor and provides “new” banking information for a genuine invoice.
Here are scenarios often observed in syndicates we support:
- Spoofed email (phishing) requesting a confidential wire transfer before the end of the day.
- False request to change a supplier’s banking information, received as a PDF by email.
- Authentic invoice, but fraudulent substitution of the account number during the payment process.
- Pressure escalation: threats of penalties, a blocked worksite or a purported “audit.”
Warning signs to identify quickly:
- A similar-looking email address, but with an extra character or a different domain.
- Unusual language for the impersonated person, errors or a sudden switch to an overly familiar tone.
- Requests that bypass the normal approval procedure.
- Banking details changed without an official signed notice verified by telephone.
The board of directors administers the syndicate’s property and must act prudently and diligently, in accordance with the Civil Code of Quebec (see the “Divided Co-ownership” section of the C.C.Q.). Refer to your declaration of co-ownership and the by-laws of the immovable to clearly establish powers, authorization thresholds and payment methods.
Essential internal controls for the board: reducing risks
Putting controls in place does not eliminate every risk, but it significantly reduces exposure. The board of directors can formalize these measures in a resolution recorded in the minutes, consistently with the declaration of co-ownership. As a reminder, the syndicate acts through its board of directors to protect the collective interests of the co-owners.
Recommended measures adapted to a syndicate’s reality:
- Mandatory dual approval for every wire transfer, regardless of the amount, through two separate accounts.
- Segregation of duties: one person prepares, another approves and a third executes.
- Written procedure for adding or changing a supplier, including a telephone “call-back” to the official number.
- Up-to-date list of authorized signatories after every annual general meeting or change to the board of directors.
- Clear authorization thresholds for unplanned expenses, with formal approval recorded in the minutes.
- Shared email inbox with multifactor authentication (MFA) for the syndicate’s treasury functions.
- Locked wire-transfer templates and a whitelist of recurring beneficiaries.
- Weekly review of the payment log by at least two directors.
- Independent monthly bank reconciliation, including advances and holdbacks.
- Systematic archiving: invoices, purchase orders, approvals and screenshots of validations.
Also establish controls for advances and emergencies. Avoid making payments from a personal email account or an unsecured phone. When banking information is updated, require an official signed form, identification from the person authorized by the supplier and a verification call to a number already on file. To structure your administrative processes, see our management services.
For the syndicate’s and board of directors’ general obligations, consult the Civil Code of Quebec on LégisQuébec. The articles dealing with divided co-ownership set out the syndicate’s formation and responsibilities.
Secure payment procedure: from purchase order to wire transfer
A clear, consistent and documented procedure limits the attack surface. Here is a typical sequence we recommend to boards of directors:
- Receive and triage the invoice through the syndicate’s official email account, with MFA enabled.
- Match it with a purchase order or board resolution and with the budget adopted at the annual general meeting.
- Technical validation: confirm that it corresponds to the work planned in the maintenance logbook and the EUC, if applicable.
- Verify the supplier: legal name, NEQ and current licence in the Regie du batiment du Quebec (RBQ) registry for contractor work.
- Banking validation: do not change an account without a signed form and a call-back to the confirmed number.
- Prepare the wire transfer in the bank’s system without executing it, then submit it for dual approval.
- Obtain dual approval from two different directors, ideally on two different devices.
- Execute the transfer, then save the confirmations and supporting documents to the file.
- Record the transaction in the accounts and reconcile the bank statement for the current month; mention it in the next minutes.
Before a major project, favour staged and traceable payment terms over a disproportionate deposit. If you use digital tools, enable strong authentication, real-time alerts and a beneficiary whitelist. If you want to standardize these steps, take a look at our packages and procedure templates available on our blog.
Fraudulent wire transfer executed: what to do in the first 72 hours
Act immediately to maximize the chances of recovery. Banks have alert mechanisms, but time is critical.
- Lock down access: change passwords and revoke sessions for email accounts and online banking.
- Notify the financial institution, initiate the wire-transfer recall and tracing procedure and open a file.
- File a police report and record the incident number.
- Preserve evidence: original emails, headers, access logs and screenshots from the bank.
- Notify the board of directors promptly, convene a special meeting if necessary and document decisions in the minutes.
- Notify the syndicate’s insurer (crime or cyber coverage, depending on the policy) to determine the required steps.
- Inform co-owners with measured transparency: the facts, measures taken and preliminary impacts.
Assess the budgetary impact. In principle, the contingency fund is reserved for major repairs and the replacement of common portions; it should not cover an operating loss related to fraud. Common expenses may require a temporary adjustment or a special assessment, depending on the circumstances and your declaration of co-ownership. Consult the relevant provisions of the Civil Code of Quebec concerning co-owner contributions and financial management, and seek professional advice as needed.
After the incident, conduct a “post-mortem” review: which controls failed, which steps should be strengthened and what training should be provided to the board of directors and managers? Update the procedure and clearly communicate the new rules to everyone involved.
Training the board and securing communications
Most wire fraud exploits social engineering more than technology. Regularly raise awareness among directors and anyone who processes payments. Simulate phishing scenarios, review the emergency procedure and require dual verification for every critical change.
From a technical standpoint, require multifactor authentication for the syndicate’s email and banking services. Use dedicated professional email addresses for the board of directors rather than personal accounts. Enable anti-spoofing filters and standardize electronic signatures. Finally, adopt a password manager, prohibit sharing by text message and apply document-retention rules for financial documents.
For inspiration on best governance and condominium operations practices, browse our services and the recent articles published on our blog.
FAQ
Will the bank reimburse a fraudulent wire transfer?
It depends on the method of attack, how quickly it was reported and the terms of the banking agreement. If the order was authenticated using your credentials, recovery is uncertain. This is why it is so important to notify the bank immediately, file a police report and activate your insurance where coverage is available.
Can the contingency fund be used after fraud?
The contingency fund is used for major repairs and the replacement of common portions. Fraud is instead an operating loss. Generally, the fund should not be used, unless expressly permitted under the legal framework and your declaration of co-ownership. Discuss the budgetary options with your legal adviser and accountant.
Should a special meeting be called?
If a major decision is required (e.g., a special assessment or approval of a revised budget), a special meeting may be appropriate. The board of directors may also adopt temporary measures and report on them at the next annual general meeting, depending on the declaration of co-ownership and established practice. Document everything in the minutes and inform the co-owners.
This article provides general information and does not constitute legal advice. For your situation, consult a lawyer or notary.
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