Because there are many duties which volunteer members of the condominium council do not have the time, skill, or inclination to fulfill, such as maintenance, repair, and the administration of routine matters, a management company is frequently hired under contract with the condominium corporation to deal with those tasks; or other procedures are set up to deal with routine matters.
The Condominium Property Act in most provinces permits the council to employ a professional management company to carry out these daily functions. The management company’s authority and responsibility are limited to matters affecting the security and maintenance of the common (shared) elements, and the assets and facilities of the condominium corporation. This limitation is to ensure that the management company does not take over the decision-making role of the council.
There are essentially three forms of condominium management: self-management, resident management, and professional management. A combination of these alternatives may also be employed.
Self-Management
In smaller condominium developments, it is often more practical for the owners to be responsible for the management of the development directly. For example, in a condominium duplex or development of up to approximately 15 units, this self-management alternative could be attractive. Another example would be a bare land condominium corporation with detached houses, and which has minimal common elements and facilities to maintain.
It is not necessary in a self-management situation that the owners themselves clean the grounds, cut the grass, do the gardening, and sweep the driveways. It does mean, though, that the owners, or a representative of the owners, would have to be directly involved in supervising the performance of these types of services. Frequently the jobs are done by volunteers, part-time or full-time employees, contracting firms, or combinations of this type of help. For the sake of continuity and accurate delegation of responsibilities, it is important that someone on the condo board of directors be responsible for communicating with those who are providing the services.
In addition to communicating with the staff, some form of supervision will have to be put into place to monitor such services as maintenance of the pool, grounds, and elevators, painting, garbage removal, and accounting and typing functions. Various federal and provincial government responsibilities relating to employees will also have to be considered, such as unemployment insurance, income tax deductions from employees’ wages, and Workers’ Compensation Board contributions. If the board of directors negotiates with a contractor to provide services, then deductions do not have to be taken off in the same fashion as with employees, because the contractor would be signing a written agreement to the effect that he or she will hire and pay his own employees. In that event, the board of directors would simply pay the negotiated contract fee for services rendered by the contractor.
Another reason for self-management is that a condominium development may be outside the metropolitan area, and so there may be difficulty in obtaining the services of a professional management company.
Resident Management
In this situation, the condominium corporation employs one or more people directly to perform the daily management requirements. These people would normally operate out of an office in the development and would be paid a full-time or part-time salary. Because the manager would be an employee of the condominium corporation, he would in effect be an employee of all the owners; it is therefore important to be very careful in selecting the manager, in order to maintain harmony with the members. Generally only large condominium developments can financially justify employing a full-time resident manager.
Professional Management
Many condominium corporations use a professional management company to some extent. These companies tend to be experienced at condominium management, and have many systems and procedures for efficient operation of their support function. This would include computerized accounting procedures and management systems, experienced staff, access to suppliers who can provide bulk-buying discounts and goods service, and careful selection of competent tradesmen. The condo management company designates a specific individual staff member to act as the property agent for the management of the condo.
One of the key benefits of using a professional management company is that due to the periodic turnover of the condo board of directors members, such a company will provide the continuity of management to ensure a consistent level of quality in the condominium development. The responsibility of the condominium board of directors would be one of providing instructions to the management company and monitoring the company’s performance.
