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Choosing the right property management company for your condo is one of the key decisions a condo board will ever make. Here is a proven strategy for selecting the best company to work with on managing your condo corporation.
Condo board responsibilities
First, let’s establish what condo corporations are responsible for. In Ontario, condos must have a board of directors who manage the condo corporation and represent the owners.
Condo boards are responsible for a whole slew of things, including making major decisions when it comes to the condos they manage.
This includes things like the maintenance of buildings, grounds, and the corporation’s finances. As well, they actively support and enforce Ontario laws, the condo corporation’s by-laws, and the applicable rules.
However, condo board members are often owner volunteers. In addition, they typically join the board with minimal experience or expertise in managing real estate, homeowners, and all that goes with it.
This is why boards look to an experienced property management company to help oversee and manage a condo corporation.
Choosing a property management company: what to look for?
Condo boards rely on property management companies to support them run an effective condo corporation. Property management companies provide the expertise and services that promote a comfortable living environment for the condo residents.
However, when choosing the best property management company to manage your condo, start with these critical three steps.
Step 1: Prepare an information package about a condo
The initial step for the board is to develop a basic information package about the condominium property. It’s a good idea to include photos and detailed information about the building age, grounds, assets, etc.
Step 2: Complete a needs assessment
The condo board needs to document the condo corporation’s needs and expectations. These will be tangible and intangible expectations. A tangible expectation includes a list of services used by the condo property and corresponding service performance expectations. An intangible expectation could be the management style of the on-site property manager assigned to the property.
Completing the description and needs assessment will help identify the type of property management company the board may want to consider for their specific needs.
Step 3: Develop a Request for Proposal (RFP)
- How long has the company been managing your type of condo property?
- What kind of experience, expertise and qualifications does the company have?
- How many properties does the company currently manage?
- How responsive is the property management team to clients for board support and operational issues?
- Do they have references?
- What services do they offer?
- How can you be assured that your condo will get the best service?
In addition, the RFP initiates the selection process and requires a sharing of information and personal interaction between the board and a property management company. Therefore, as a best practice have an interested property management company sign a confidentiality agreement before sharing the RFP.
Core services a property management company must offer
In most scenarios, a property management company offers a suite of different services. However, there are several core ones that every condo corporation can tremendously benefit from. Let’s take a look at what those are.
Financial management services
Financial management services are vital when managing a condo property. The financial services that are routinely required to meet the condo board’s needs include:
- Provide and maintain a comprehensive financial and accounting reporting process to the condo board
- Provide monthly financial and management reports and budget update
- Review monthly costs and expenses to ensure the condo corporation meets its approved guidelines and annual budget
- Create annual budgets for the condo board approval
- Collect monthly common element and unit expenses
- Responsible for managing all routine banking and reconciliation monthly
- Management of outstanding payments and taking the required action for a successful resolution
- Coordinate Reserve Fund Studies and required updates; identify recommendations for reserve fund investments for the condo board information and approval
Operational and administrative services
A property management company typically can offer administration, planning, supervision, and daily operational responsibilities. Each condo corporation has varying requirements depending on the size, age, and unique needs of the property. These services often include:
Administration and Planning Services:
- Management of all operational and day-to-day activities
- Management of all communications with property owners and the board of directors
- Adhering to and enforcement of all regulations and bylaws under the Condominium Act of Ontario
- Liaising and communicating with all corporation’s third-party stakeholders including auditor, project leads, trade representatives, vendors, and other professionals.
- Maintenance of all corporation’s core and non-core records electronically
- Coordinating, conducting, and organizing all regular meetings, including AGM and special meetings
- Preparation and circulation of regular newsletters for the residents
- Supervision and coaching of staff
Regulatory compliance and condo board support
Condo Corporations must uphold and enforce the requirements of the Condo Act. The condo act regulates the creation, purchase, living in, and governing of condos across Ontario. In 2015, the Province of Ontario enacted changes to the Condominium Act. These changes focus on how condos are governed. As well, the act works to strengthen the transparency and accountability of condo corporations.
For example, the Ontario Ministry of Government and Consumer Services have created and posted 15 new forms that must be used under the Condominium Act. The purpose of these forms is to help regulate and simplify communication between condo boards and tenants/owners. Today, this is a mandatory practice.
Due to the changes made to the Condo Act, all elected or appointed board members must complete mandatory training within six months of joining the condo corporation board. The Condominium Authority of Ontario (CAO) provides members with free online training modules. If any member fails to complete the training within the assigned time period, they will immediately and automatically be asked to step down as a board member. Board members must also comply with new disclosure obligations.
Examples of these obligations are:
- Whether they (or related person) are party to any legal action;
- Whether they have been convicted of an offence under the Condo Act;
- Whether they have a material interest in a contract or transaction;
- Whether they are in debt for more than 60 days.
Property management companies are required to comply with the Condominium Management Services Act. As a result of the Act, the Condominium Management Regulatory Authority (CMRAO) became responsible for administering the requirements of this act, which includes:
- Mandatory licensing and regulation of condo managers and management providers
- An online Condo Management Database providing information related to condo licenses that are available and can be accessed by the public (for example, license types and any restrictions);
- The process for condo tenants/owners to lodge complaints against a condo manager or the property management company;
- Actions that may be taken by the Registrar, such as suspending or revoking a license, or requirement for more education.
Since November 2017, in Ontario, all condo property management companies must obtain a license with the Condominium Management Regulatory Authority of Ontario (CMRAO).
Any licensed property managers or a property management company must provide tenants/owners with a copy of their license upon request. Additionally, based on the new changes to the Act, it isn’t permitted to provide condo management services without a license. That includes those that haven’t provided proof of application for one and those that are waiting for the CMRAO to approve your application.
Beyond the core property management services
While many companies deliver a similar suite of services to their condo corporation clients, there are a few things that can set a great property management company apart from the rest.
Specifically, it is how diligently they deliver these services. Additionally, the collective expertise of the leadership and operational team. As well, how effectively they communicate with residents and board members. And most importantly a solid understanding and a successful accomplishment of the established goals. All of these qualities not only help increase the value of the property but also foster a sense of community amongst stakeholders.
At CPO Management Inc., our boutique-style approach enables us to get to know our clients, their challenges, and the environment around us on a much more personal level. Each member of the board at all times will have a clear understanding of the corporation’s financial standing and the type of strategies being implemented to maintain the health of the property. We are known for our friendly demeanor and a highly-analytical nature, which is why at the core of our property management service is the preventative strategy approach. We don’t wait for problems to appear. We prevent them from occurring in the first place.