Property Management Issues
January, 9 2023 Published by Golden Horseshoe Chapter - By Carole Booth
Growing Pains of Switching from Self-Management to Property Management after 40 Years!
From the Volume 14, Winter 2023 issue of the CCI GHC Condo News Magazine
After over 40 years of being self-managed, and having excellent, dedicated Boards during that time, the Board of Directors for HCC #116 decided to investigate the concept of becoming managed. There were many issues the Board wanted to consider in their decision-making process – doing their due diligence. Below is a summary of the main items that were considered.
- Succession – being able to get enough Owners/Residents to continue to join the Board going forward (an eight-member Board);
- Knowledge - Board members willing to attend courses in addition to the required online government course (this info is just the tip of the iceberg); need to keep abreast of the changes in the Condo Act and all other Acts that apply to the Condo community; know when to use a professional or not;
- Liability increasing for Boards – re quickly changing legislation – the need to be up to date regarding the CAT, Occupiers Liability Act, Construction Act, municipal by-laws, etc.;
- Engagement of Owners/Residents – volunteering for the Board; younger owners with families and careers – they have a life and find it difficult to commit; and
- New Stewardship – time for new and younger Owners/Residents to take the reins, but no one to do so – how to encourage Owners/Residents to “step up” and do their part – volunteer!
The Board first broached the subject with the owners/residents at the AGM three-and-a-half years ago. The topic of succession – having enough Owners/ Residents stepping up to join the Board each year is important. This topic was addressed again at the next two AGM’s.
In the fall of 2021, the Board asked a PM (Property Manager) to come to a Board meeting and present a general overview of what a PM would do for a Board and Condominium Corporation, responsibilities of the Board and what the Owners/Residents could expect with a Q&A following the presentation. This meeting was very informative. Three PM’s were interviewed over the next few months. All discussions regarding PM’s were noted in the minutes to keep everyone (owners) informed.
At the 2022 January Board meeting, the Board further discussed the pros and cons of remaining self-managed versus becoming managed. In February, 2022, after the final deliberation and discussion, the Board put forth a motion and approved hiring a PM. In addition to the recorded motion in the minutes, the Board prepared a letter for the Owners/ Residents confirming that the Board had made the decision to become managed and had approved the hiring of a PM. The letter included the rational and a brief description of what this would mean to HCC #116 to have a PM to become effective June 1, 2022. As well, our new PM was introduced in the March Wellington Green News and Views Newsletter with a photo and short biography.
After receiving the contract, it was reviewed by the Board and the Corporation’s lawyer; a motion was made and approved to accept the contract to become effective June 1, 2022; the contract was signed at a Board meeting in March. June 1, 2022 was chosen to coincide with the new fiscal year so the Budget could be aligned with what would now require monthly Management fees.
In June, the Property Management Company sent an Introduction package to each Owner which again explained what role is of a PM. A Special Meeting was called for in August, to change the number of Board Members from 8 to 3 in the Corporation’s By-Laws to be reset at the AGM. The changed was approved.
As the title of the article alludes to, there are many growing pains for everyone involved – Owners/Residents, Board members, current contractors and definitely the PM – this learning curve is enormous; it is not one sided! There are new protocols that everyone now needs to follow; all concerned parties!
Now instead of sending a concern or request to the Board, Owners/Residents need to send their questions, concerns, requests for repairs, etc. to the PM. If they send their emails to the Board, the Board needs to acknowledge the email and then forward it to the PM. The Owner/Resident should also be reminded that in the future all correspondence goes to the PM. We are almost there!
A self-managed Board has to remember that the PM will now deal with day to day issues (repairs, compliance, complaints, conflict, contracts, etc.) of the Corporation. Therefore, Board members have to remember not to step in and do something – that the info they get from Owners/Residents needs to be forwarded to the PM. There are proper channels that need to be followed to make sure that everything runs smoothly.
Your new PM has a tremendous amount of information to learn regarding about your community. They are as follows:
- The Documentation (Declaration, By-Laws, and Rules);
- Unique characteristics of the condo and condo community;
- Layout of the property – the buildings and grounds;
- Amenities of the condo community;
- Ongoing projects;
- Vendors/Contractors corporation would like to continue to use;
- New projects to be tendered;
- Current processes in place;
- Specifications that the condo adheres to;
- All of the idiosyncrasies of the Corporation; and
The Board too has adjustments to make. The day-to-day work of the Condominium is streamlined through the PM’s schedule and their companies’ processes, which may be different than a Self-Managed Board would do. HCC #116 had 8 Directors – each took on a specific role on the Board (i.e., Director of landscape, maintenance, security and garbage, pool pavilion, -at-large, secretary, treasurer and president). When becoming a “Managed” site, it now has only 1 person implementing the work. After the decisions have been made, the work is then scheduled in the PM’s timeframes, which can be different than when the Board “did it themselves”.
The Board is required by law to manage the assets of the Corporation; the Board makes the decisions and the PM follows the direction of the Board.
In other words, the Board is governance – sets direction/tone as to the documents of the Corporation and the PM is the enforcer – follows the direction of the Board in implementing compliance.
This can be a good time to reset the way some issues have been handled in the past – make it clean.
Having said all of that, Board members will still need to be involved in some operational aspects of the Corporation (i.e. onsite contact for contractors if required, do routine walkabouts and seasonal walkabouts with PM, open underground overhead garage doors if power failure, turn main water valve off if required, etc.). Another option could be to implement a lockbox system for contractors. If those two possibilities are not working, the Board may want, or have to consider the use of a Superintendent who is on site daily (half days or full time), which of course will add to the expenses of the Corporation.
There is another learning curve for both the Board and the PM which involves working with the contractors. If the Board would like to retain contractors that they have used, the PM needs to establish a working relationship with these contractors – explain the protocol for contractors dealing with property management. As well, Board members need to become familiar with new contractors and what is required re onsite contact with contractors.
In addition to all of the documentation and information that the PM requests prior to the date the Corporation becomes managed, it is helpful for the PM if the Board compiles an up-to-date list of vendors with name, and contact information for the PM to reference.
As well, if there are outstanding projects or scheduled projects that are to start after the date the Corporation becomes managed, then a comprehensive list should be provided with contractor information, start dates, contracts, etc. Any additional information that the Board can provide the PM will be beneficial in the transition.
Going forward, the retired Board members of HCC #116, with a combined 36 years of experience, will be there to answer “historical” questions – give background information on previous projects, etc. if future Boards and/or the PM have any questions.
During the transition period, everyone will be frustrated, and there will be many questions from all of the involved parties! Going from self-management to management is definitely a process! Working as a team and being patient is definitely a must for everybody.
It has been just over seven months since HCC #116 became managed – the growing pains are now fewer and farther apart! We are well on our way - making a smooth transition to becoming managed.
By June 1, 2023 – one year later, the transition should be finalized.
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