Governance

May 1, 2024 Published by Manitoba Chapter - By Alan Forbes

Condo Conversation Corner - May 2024

From the CCI Manitoba Spring 2024 Condominium News and Views Magazine

In this edition, we have four topics of interest:

• Property manager concerns
• Summaries of the recent Presidents’ and Treasurers’ forums
• Financial audit or review engagement
• Condo corporation appraisals and insurance

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If you want to contribute to the discussion, you can make a submission via our website or send us an email.

Disclaimer

CCI Manitoba is unable to provide specific legal advice. We recommend that you speak to a lawyer regarding the challenges or problems you may be experiencing. For your information, a list of lawyers who are Professional Members of the Manitoba Chapter of the Canadian Condominium Institute is available on our website.

Note that frequent references are made to Manitoba’s Condominium Act and regulations.

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Property manager conversations

We’ve started reaching out to our property manager members to answer our question: “How can CCI Manitoba provide better membership value to you and your condominium corporation clients?” 

PM: The loss of the printed newsletter is a big deal, especially for those who do not have internet access. Our client unit owners and boards saw the printed newsletter as valuable and its disappearance prompted some to cancel or consider cancelling their membership. 

Some considered the printed newsletter as the only tangible or visible benefit of membership. Some condo corporation directors would show up to meetings with sticky notes sticking out of their newsletters to identify items to discuss at the meeting. Some readers of the news do not want to spend a lot of time on an electronic device and would rather grab a coffee, relax in a comfy chair and read a printed newsletter that they can put down and return to.

CCI: We recognize the loss but had to go online for economic reasons. Short of a dramatic increase in membership or a sponsor coming forward to cover the printing and distribution costs of a newsletter, digital delivery is our only option. 

We maintain an online newsletter archive, available only to CCI members, which contains a trove of articles for condo directors to use and learn from. As well, for readers who prefer using an electronic device, we have our E-magazine, whose  content is formatted for cellphones and tablets. The newsletter is still published quarterly and can be delivered directly to a member's email inbox by the member becoming a subscriber. All a member has to do is click the Stay informed button on our website.

PM: Many of us want to attend the monthly education events but find it impractical to spend 30 minutes driving to a venue, spending one and a half hours dining and learning, followed by another 30 minutes of driving back to the office. 

Long ago, events were held at Polo Park, then at south Pembina. Now they’re held at Kenaston  and McGillivray, a location far away for those in the northeast part of the city, and even worse for those in the bedroom communities surrounding Winnipeg.  

CCI: We will look into the possibility of holding future events at a more central location but that doesn’t really help the people outside of Winnipeg.  A few years ago we recognized the travel problem to attend our education events and started posting recordings of the presentations along with copies of the presentation materials. These recordings, which we started to offer in September 2019,  are available in the Members Only area of our website. So if you can’t attend an education event, you can still access the information presented. As well, the COVID-19 pandemic forced us to start holding online webinars. For those that were free to non-members, we have posted recordings in the Resources area of our website, under Sponsored Webinars.

PM: The search capability within the newsletter archive is difficult to use. Is there a trick to finding articles easily? A search for pet-related articles, for instance, uncovers  lots of editions in the archive, but not necessarily the relevant one.

CCI: Yup, the search capability sucks. We have all become spoiled by how much more effective Google searches can be. CCI National has plans to roll out improvements to our websites across the country; a pilot project is now underway. In the meantime, you might have luck by searching using Google and including CCI Manitoba in your list of keywords.

PM: The professional directory would be much more helpful if more contractors and service providers were listed. Whenever we need a new service provider, we look there first, but often there is little to find.

CCI: We, too, would like to see more listings, since each one is a CCI member. Other than property management firms and lawyers, there are few entries. We do encourage condo directors and property managers to mention CCI to their service providers. Service providers should recognize being listed in the professional directory as a marketing opportunity, as many unit owners, condo directors and property managers consult the directory before getting work done at their property.

PM: Can you help address the problem of disengaged condo boards? More than a few feel that they need not be a CCI member nor educate themselves on condo governance because their property manager is a CCI member and should know it all.

CCI: We recognize the problem and, short of any provincial requirements for condo director training, don’t see an easy solution. Condo directors need to know that they are ultimately responsible and accountable for what happens at their property. To help address this problem, CCI Manitoba is more than willing to send a representative to a condo board meeting or AGM to explain what CCI is all about, what we have to offer and why they should take advantage of the opportunity.

PM: What other value can CCI Manitoba provide to members?

CCI: We are part of a national association with 17 chapters across the country. Many chapters offer training and education online (some of it for free) and if  members of CCI Manitoba are interested in participating, they can do so at the member rate for their chapter. For more information, check out the national event schedule. As well, there is the CCI National Resource Centre with information compiled from all chapters.

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Presidents’ Forum

On Feb. 7, we held our second in-person Presidents’ Forum since the end of pandemic shutdowns. Attendance was good, with presidents of almost 40 condominium corporations present, supported by a half dozen CCI directors on hand to help answer questions. If you missed this session, we have another planned for Wednesday, June 26. Click here to register.

The audience was engaged and many discussions were memorable. While some questions were fielded by CCI directors, many were answered by other presidents. Here is a sampling:

• More than one president mentioned a major project needed engineering work done upfront, but the quoted cost was deemed too expensive. They asked if someone could recommend a more cost-effective engineering company. A retired engineer who is president of his own condominium corporation replied that there are three types of engineering consultants – fast, cheap and good – a useful reminder that you get what you pay for.
• Many attendees thought the session was useful and wanted to continue the discussion. One of the presidents offered to help set up a Facebook group strictly for the  presidents of  CCI member condominium corporations to continue the dialogue. This has been done, and CCI Manitoba Presidents' Forum is now active.
• The topic of snow removal came up a few times. Several presidents lamented that their contractors would not shovel snow from stairs and sidewalks. One president indicated that his own condominium property, WhiteOut, does both machine clearing and shovelling. 
• One president from a self-managed condominium corporation indicated that his board makes extensive use of artificial intelligence and chatbots. Board members find it especially useful to respond to unit owner complaints. He said it takes just a few minutes to get a well-written AI letter that would need only minor editing and verification of the key facts. (Note: There are risks and rewards when using AI. See the article headlined “Artificial intelligence has both risks and rewards” on page 7 for more information.)

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Treasurers’ Forum

On March 20, we held our second ever Treasurers’ Forum. We had a good turnout, with treasurers from 25 condominium corporations registered. They were supported by four CCI directors on hand to help answer questions. In case you missed it, our next Treasurers’ Forum is scheduled for Wednesday, Aug. 14. Click here to register.

There were many common themes in the discussions. While some questions were fielded by CCI directors, most were answered by other presidents. Here is a sampling:

• Many treasurers had a story such as this one. A new condominium project is undertaken although the reserve fund is underfunded. Once the turnover from the developer to the unit owner board happens, there is implicit or explicit pressure to keep condo fees low. The property ages, stuff needs to be replaced and there are inadequate funds in the reserve. Special assessments happen.
• One attendee indicated that while there are three directors on his condo’s board, no one was designated as the treasurer and the board relied on the property manager for the accuracy of the financial statements. This also came up in the Treasurers’ Forum last summer. So, the question is, is a treasurer required?
  • Yes, but not by the provincial condo act or regulations
  • Yes, because it probably is required in a condo corporation’s bylaws
  • Yes, because someone has to ensure the financial statements are accurate
  • Yes, because if everybody on the board assumes somebody else is diligently reviewing the financial statements, probably nobody is. 
  • Yes, because the treasurer’s role is key. The treasurer must study the details, and then summarize at a high level for the other directors, so all board members are confident they understand the financial situation.
• Many attendees complained that their property manager was overburdened, with the effect of less frequent communication and a decrease in responsiveness. Most saw this as a side effect of Akman leaving the condo management business. It is hoped that the effect is only temporary, but if developers keep building new properties and boomers continue to retire, where are new property management staff going to come from?
• Several attendees related stories that suggested a misunderstanding of the relationship between a condo board and the property manager. Ideally, the property manager and the board work together as partners governing and managing the corporation and property. That said, it is important to restate that the board provides the direction and the property manager acts based on that direction.

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Financial audit or financial review

A question came up at both the Presidents’ Forum and at the Treasurers’ Forum about whether the provincial condo act allows for a financial review engagement instead of an audit. While CCI Manitoba published an article in the May 2016 newsletter (available in the newsletter archive) expressing the opinion that review engagements were acceptable, that opinion has been called into question. We are now reviewing this opinion and hope to provide an update in the near future.

The provincial condo regulation mentions “auditor” in 11 places and “audit” in four places, but mentions "audit or review engagement” only in the context of report requirements in Section 34, where it references the CICA Handbook,  implying a review engagement is an option. The condo act, on the other hand, mentions “audit” 16 times and “auditor” 51 times but makes no mention of “review engagement.” So there’s a clear  need for a review of CCI's opinion on the matter. We have posed the question to the provincial department that has responsibility for the act and regulations. We are waiting for its response.

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Condo corporation insurance and appraisals

Normac put on an excellent presentation about condominium corporation appraisals for our members on March 13. You can view the presentation slide show and watch a recording of the session: Just click here. While the presentation dealt with appraisals, many discussions arose about insurance. Fortunately, we had two CCI directors present who work in the insurance industry to field questions – Seth Henoch from BFL and Kathleen Vandale from HUB. Here are some of the highlights:

• Condo corporations should have a standard unit definition, either in their bylaws or in their declaration. Most new corporations have it defined, but many older corporations do not. If no definition exists, it will affect claims against the corporation’s policy because it covers the standard unit. If a corporation does not have a standard unit definition, it should work with a lawyer to get it defined.
• Unit owners’ insurance policies cover the betterments and their unit contents and personal items. It is recommended that unit owners document, photograph, video record or do whatever is required so that in case of a claim they have sufficient information to support the claim. Imagine a total loss due to a fire. Would you like to rely on your memory of everything in your unit?
• Do you understand the concept of co-insurance and the implications if you have to make an insurance claim on your corporation’s policy? Here is an explainer from BFL and another by Normac. 
• While the condo act in section 185(9) requires an appraisal at least every five years, appraisers and insurance professionals advise getting an appraisal done every three years, to make sure you are properly insured. Appraisers generally offer a three-year program, with a full appraisal in year one followed by free updates in years two and three. If you plan for it in your budget process, affordability is not much of an issue.

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Alan Forbes is a director of CCI Manitoba and its vice-president. He was the chair of the Communications Committee for the past few years and has served on the Government Relations and Advocacy Committee. He currently serves on the Membership Committee, the Education Committee and the Communications Committee.