Property Management

February 6, 2025 Published by Grand River Chapter - By Sara Hicks

Your Condo without a Property Management Company: Pros, Cons, and Options

In Ontario, some condominium corporations manage their properties without the help of a professional condominium property management company licensed under the Condominium Management Regulatory Authority of Ontario (“CMRAO”). Sometimes this is because of their remote location, other times it is because there is a very active and capable board, and other times it is in the interest of cost-savings, or a mix of these.

In Ontario, some condominium corporations manage their properties without the help of a professional condominium property management company licensed under the Condominium Management Regulatory Authority of Ontario (“CMRAO”). Sometimes this is because of their remote location, other times it is because there is a very active and capable board, and other times it is in the interest of cost-savings, or a mix of these. While not having a professional manager licensed under the CMRAO can save the owners on fees and offer greater control, it also comes with its own set of challenges. I want to explore how condos can operate without a property manager, the benefits and drawbacks of doing so, and when it might be time to bring in professional management.

How Can Condos Operate Without a Property Manager?

Condominium corporations are governed by a board of directors, usually composed of unit owners. The board is responsible for overseeing the day-to-day operations of the building site. In a scenario where a condo is without a property manager, the responsibilities of property management are typically distributed among the board members or other volunteers within the condo community.

Key tasks include:

• Financial Management: Handling the condo’s budget, collecting fees, managing the reserve fund, and overseeing financial records.
• Maintenance and Repairs: Scheduling repairs, getting quotes, hiring contractors, and ensuring the property is properly maintained.
• Legal Compliance: Ensuring the condo complies with the Condominium Act and all other legislation (Occupational Health and Safety, Human Rights Code, TSSA requirements; the list will go on and on) as well as enforcing rules and regulations, and handling disputes.
• Communication: Keeping residents informed about community issues and updates and addressing concerns or complaints

Pros of Operating Without a Property Manager

Cost Savings: One of the most significant advantages is the potential savings. Property management fees can range, and it will depend on the needs of the condo. By operating without a property manager, the board can allocate these funds to other areas of the budget.

Direct Control and Flexibility: Condo boards that manage the property themselves have direct control over communicating decisions, addressing owners, maintenance schedules, and the handling of issues. There may be more flexibility in choosing vendors and making quick decisions without waiting for a management company’s involvement.

Community Involvement and Transparency: In smaller communities, self-management can foster a sense of connection among residents. With board members directly involved in the day-to-day operations, owners may feel more of that personal touch and involvement in decisions affecting the property.

Personalized Service: Without a management company’s standard procedures, the condo board can tailor their approach to the specific needs of the building and its residents.

Cons of Operating Without a Property Manager

Time and Effort: Self-management requires significant time and effort from the board members. Balancing these responsibilities with other personal commitments can be challenging, especially for busy professionals. If the board struggles to keep members or lacks expertise in certain areas, the site may suffer as needs go unmet.

Lack of Expertise: Property managers are educated in the field and bring specialized knowledge of the condominium industry, including legal requirements, financial management, and building maintenance. Without this expertise, a condo board may struggle to address complex issues such as compliance with the Condominium Act, what to put on a status certificate, managing the reserve fund, or negotiating contracts with vendors to name a few. A qualified property management company may have established connections in the “condo world” with trusted vendors with experience as well as proper insurance.

Potential for Conflict: Condo boards often must make difficult decisions that could upset certain residents, such as enforcing building rules or approving a higher condo fee. Without a professional to mediate or manage complaints, conflicts may escalate and strain community relations. Some may feel uncomfortable with hard choices and must face their neighbours without the “buffer” of management sending the correspondence.

Risk of Liability: Condo boards are legally obligated to comply with regulations and ensure that safety standards are met. If a board fails to meet these obligations due to inexperience or negligence, the condo corporation could face legal or financial penalties and could even be held personally liable. Are the contractors onsite doing work current with their WSIB and/or WHIMIS training? Does the snow contract properly cover the condo in the event of a slip and fall claim? The owners do not want to pay for a major project, but it is needed for the health and safety of the residents; what happens if the board defers?

When Should a Condo Board Bring in a Property Management Company?

There are times when the scale and complexity of managing a condominium require professional help. Here are some scenarios when a management company may be necessary:

Large or Complex Properties: As the size of the building or the number of units increases, so does the complexity of management. Large condos may require more sophisticated financial planning, coordination of contractors, or handling of resident concerns. A property manager can offer the resources and staff needed to manage such tasks efficiently. A building especially has constantly spinning parts, and when emergencies pop up, there must be persons ready to assist, no matter the day or hour.

Limited Time or Expertise: If the condo board members lack the time, expertise, or interest in handling property management duties, hiring a professional can relieve them of the burden and ensure that the property is managed according to best practices.

Ongoing or Escalating Problems: If the condo faces ongoing issues—whether it’s financial mismanagement, maintenance delays, or legal challenges—a property management company can offer the structure, guidance, and experience necessary to resolve these issues effectively.

Difficulty Enforcing Rules or Managing Disputes: A professional property manager can help mediate disputes, enforce building rules, and ensure that residents comply with the condo’s declaration, by-laws, and rules. This can be particularly useful when dealing with difficult or persistent conflicts between residents.

Regulatory or Legal Compliance Challenges: The Condominium Act and other provincial laws and regulations place significant legal responsibilities on condo corporations. A property management company is often well-versed in ensuring that these requirements are met, reducing the risk of legal problems for the condo corporation.

Condo boards should carefully weigh the pros and cons, the above not being all-inclusive, considering the time commitment, expertise, and legal responsibilities involved in property management. If the workload becomes too demanding, or if the board struggles to meet its legal obligations, hiring a property management company can be a wise decision to ensure the long-term success and stability of the condominium. In some cases, condo boards may opt to delegate specific tasks to professionals on a time and material basis rather than bringing in a full-time property management company. Some companies may offer guidance on specific issues (CAT cases, enforcement, major projects, arranging the AGM, etc.) or specifically do book-keeping only (collecting the condo fees, notice of liens, collecting documents for the year-end audit, etc). Every condo is completely unique and should do some research into everything involved in running them to ensure it all flows smoothly!

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Sara Hicks, Vice President at Five Rivers Property Management.