Property Management

November 26, 2024 Published by Toronto and Area Chapter - By Alan Rosenberg

Condominium Property Management

From the Fall 2024 issue of CCI Toronto Condovoice Magazine.

“Oh, no – not again!” Yes, again. And don’t try to escape, I have the doors locked and the airports covered

Now that we’ve gotten that unpleasantness out of the way, I’d like to discuss with you, or remind you of – as the case may be – certain realities about the condo management world that will inexorably affect your Board of Directors and the corporation to which the Board so selflessly administers. In my several decades of serving the condo community, and also serving on two different condo Boards during that time for a total of twenty years, I’ve encountered many topics of considerable interest and importance to that community. Here are just a few – and there are many, if the editorial Board of Condovoice can tolerate more of them in future issues.
*I started my condo career when I was thirteen. Honest.

1. Oh, Alan, stop snowing us, it’s all about the property manager. Don’t give us all that candy floss about “It’s important to know the company, not just the property manager.”

I get it. The on-site property manager, whether full-time, part-time, or occasional participant at the site, is the person most dealt with by the Board. And almost always the only representative of the company which employs that person, whom the residents see. So therefore, it would seem to follow that if there’s a good property manager at the site, it means “now there’s a good company.” And if the manager’s not so good, it means “Hey, Board: why don’t you get rid of that management company?” So let’s go with that for a moment. Let’s say your corporation has the best possible on-site property manager. He or she (let’s settle on “the PM”) has most if not all the answers to the Board’s questions, possesses immaculate people skills in dealing with the residents, is proactive in seeing what needs fixing, brings in quality contractors promptly to do the fixing, has a wealth of knowledge and experience, and can read, interpret and explain the monthly financial statement produced by the management company. Amazing. You’re set, right? But what happens if:

• The PM is so good the company promotes them to regional/district/area manager? (Not a tragedy if that region includes your property – at least there’s some continuity.)
• The PM is so good the company promotes them to regional/district/area manager – but in an area that doesn’t include your property? Still not terrible, but not so great.
• The PM has to leave, because the PM’s partner has been transferred to an other city?
• The PM, heaven forbid, takes seriously ill, on a long-term basis?
• The PM – and this may be the juiciest one –gets “poached” by another company? (You all surely know that condo management companies are in interview mode 24/7 these days, right? See below.)

What then? Well, perhaps this doesn’t apply to you, because your corporation has a manager who’s “there for life,” until they retire. But in the other 98% of Ontario’s condo corporations, the management company simply parachutes another fully-trained, fully qualified General License PM, and you’re good to go, right? Except: as stated in a wonderfully wellwritten article several months ago in this very publication, there are between 11,000 and 12,000 condo corporations in Ontario, and fewer than 2,000 fullytrained, fully qualified General License PMs. That makes an instant replacement, with a PM of anywhere near the same calibre, a bit tricky. Therefore, the Board has to hope that the management company:

• Has that replacement PM ready to go, or
• Can safely promote a PM-to-be into that role, or
• Can poach a suitable PM from another company, or
• Can think outside the box, and look at “creating” a PM from other sources (admin assistant, concierge, superintendent, even a hotel manager), or
• Shows that it values its PM’s by supporting them, educating them, mentoring them, and paying them competitively – thereby reducing the risk of their being poached. (Note – in no way does the author encourage poaching! But it happens, whether or not the author approves.)

So how do you determine if the company ticks these boxes? If it’s the incumbent, it might be wise to chat with the decision- makers (the PM’s employers), and receive reassurance that at least some of these boxes have been ticked. If you’re interviewing companies to see what the marketplace has to offer, it’s important to make this a vital part of your search/ appraisal process. Not to burden you, but it’s up to the Board to be aware of this. You do yourselves a disservice by not drilling deep into this aspect of condo property management. In conclusion, I suggest the mantra be updated to: “It’s all about the property manager – until it isn’t.”

2. Alan: These quotes we receive from the contractors (or trades, or suppliers) are all over the place. Why can’t we get companies all quoting on the same thing?

This can happen when there is no standard set of criteria on which the service or product suppliers can bid. Surprisingly, I still encounter situations where incumbent management does not have sets of standard specs for such important areas as grounds-keeping (landscaping, snow clearing), concierge/security, hallway/ common area cleaning, pool maintenance, pest control, etc. (Note: this does not include major projects which are so extensive as to require engineers to provide the specs). But in the other situations not requiring the services of an engineering firm, it’s incumbent upon the management company to:

• Create and maintain these specs
• Ensure that the specs allow for reasonable variations – which must be explained clearly
• Ensure that the PMs are using them consistently
• Send the specs to reputable, experienced contractors/trades/suppliers • Ensure that the quotes adhere to the specs
• Summarize the comparative quotations in readily-accessible form, for the Board’s benefit
• Recommend the choice, based upon not only the quotations but also the management company’s own knowledge and experience.

A capable, experienced, management company, whether large, mid-sized, small, or even boutique-sized, should be capable of creating effective specs for all of the disciplines mentioned above. And you have my assurance that the quotes in response to these specs will be more relevant, rather than “out of left field.”

3. Alan: How do we really know if our management company is doing the right things for us? Are we being reasonable? Are we micro-managing? How do we know what to expect from them?

To reiterate one of my mantras:

• The management company gives the Board advice
• The Board makes decisions based on that advice, and other appropriate criteria
• The management company carries out the decisions made by the Board
• The Board, as the executive body responsible to the condominium corporation, monitors the management company’s execution of the Board’s decision.

Here’s the second part. As to how to assess the company, whether the incumbent or any company the Board may consider hiring, here are my criteria (in no particular order of importance – depends on the situation):

Assessment Criteria ( Seven Elements of Condominium Management)

• On-Site Operations
• Accountability, Credibility
• In-House Resources, Condominium Expertise
• Communication
• Financial/Administration Services
• Cost-Savings/Economies of Scale
• Safety, Conservation

On-Site Operations

• Anticipation of, rather than reaction to, daily occurrences and problems; a thoroughly pro-active approach, on the part of management, to their responsibilities
• Management’s in-house “spec’s” for contract tendering: How rigorous? How thorough? Does the Board receive sufficient “legitimate quotes” in every case? Does management analyze the quotations appropriately, so the Board can make the best possible decisions?
• Effective supervision of all trades and contractors
• Focused guidance on major projects (renovations, etc) – seeing as your corporation, given its age, may possibly have a number of such major projects on the horizon
• Constructive enforcement of the corporation’s by-laws and rules
• Inspections with a purpose – that is, pro-active management
• Preventive Maintenance Program: must implement and apply, to the Board’s satisfaction
• Continuity and consistency in management’s on-site staff

Accountability, Credibility

• Attitude toward client: can you count on management to support, at all times (within reason and legal parameters), the members of the Board?
• Is there at all times someone in authority for the Board to contact, in the event of any lingering dissatisfaction? Does this result in resolution of the problems? Are management’s senior staff reachable, reasonable and responsive, when access to them is required?

In-House Resources, Condominium Expertise

• Management’s available expertise, back-up, and consultative personnel, in such areas as major projects/renovations, technology advances, and legislation updates
• Experience in similar situations (property’s size, age, location)
• Familiarity with insurance issues, to complement (or offset, if need be) the broker’s input
• Reputation in the condominium community, stability of key personnel
• Thorough knowledge of: Condominium Act (including the new Regulations), Declaration, By-Laws, Rules; willingness and ability to enforce the rules (also an “On-Site Operations” issue)

Communication

• How frequently, and how effectively, does the management company communicate with the Board members, (beyond the efforts of the on-site manager)? Response to questions and issues raised by the members: Prompt? Courteous? Credible?
• Ditto, the management company to the residents? How does the on-site property management site staff behave in direct contact with the residents?
• Do the on-site management personnel get the proper assistance from “head offiice”? It is essential – no matter how capable the on-site personnel – that there is appropriate support.

Financial/Administrative Services

• Financial Statements: accuracy, timeliness, readability, variance reports
• Budget procedures: Latest data from utilities suppliers? Comparative statistics?
• Controls: Spending limits (apart from contract limits); signing authority; Investments
• Status Certifi cates: accuracy, timeliness
• Prudent, organized maintenance of the condo corporation’s records (contracts minutes, etc)
• Awareness of Reserve Fund Study: evaluation of replaceable technical equipment; ability to evaluate the Study itself

Cost-Savings
Includes (a) contracted (regulatory and scheduled) maintenance and repairs, (b) unscheduled repair and maintenance items, and (c) administrative expenses, and addresses the following:

• Maximization of the earnings potential on the corporation community’s funds.
• Effective (i.e. “bulk”) purchasing procedures, re: supplies, contracts, etc.
• Access to Bulk Utilities purchases, if applicable
• Energy monitoring and management where applicable
• Knowledge and experience database for info-sharing (result: cost-savings)
• An ongoing intention to pro-actively analyze the budget, line-by-line if necessary

Safety, Conservation

• Management’s 24-hour emergency service: accessibility, communication level, reliability,
• Fire safety/emergency system: suitability of entire program and procedures
• The “WHMIS” Program: the proper storage of all combustible materials, etc.

I hope this will be of assistance to the reader. (Okay, the doors are now unlocked, and you may make your escape.)

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Alan Rosenberg was a member of the condominium management industry for twenty years, following which he established A. R. Consulting, an advisory service to condominium Board members on property management issues. He continues in that role to this day. During this forty-fi ve-plus-year career, he was also a condo Board member for an accumulated twenty years.

* (PS – He was considerably older than thirteen when he began his condo career. Honest.)