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Steve Sedgwick
Royal Lepage Noralta Real Estate
3018 Calgary Trail, Edmonton, Alberta
P: 780-431-5600
F: 780- 431-5624

Tuesday, September 18, 2012 - Condo Documents & Property Management

What's up with condos & property managers?

I'm writing this post due to a very recent and frustrating experience I had with a condominium management company and their fully licensed manager.

For the average condominium owner the annual general meeting (AGM), board meetings, and all the documentation pertaining to a condominium corporation can be summed up in one word.
BORING.......... zzzzzzzzzzzzzz
Most people don't realize that there is actually a legal act in place making it mandatory for sellers to provide a full complement of documentation for any prospective buyer to review. The current Alberta Real Estate Association forms that Realtors use for resale condominiums adequately addresses this. So does the proper Seller Brokerage Agreement used between the seller and the brokerage they decide to retain.

Another thing most condominium owners fail to recognize is the fact that the condo corporation they bought into essentially makes them shareholders with a substantial equity position. A condominium corporation needs to be managed just as well as any other business if it is to succeed. If a board does not have a clear understanding of their responsibilities and obligations under the Condominium Property Act then it is unlikely the Board of Directors is performing at their best.
One of the inherent problems with many boards is that they are relying on ineffective "professional" property managers to guide them and the corporation through the numerous challenges associated with a condominium development.

I could share countless horror stories of property managers and boards that are unknowingly contravening the law with respect to the Act. They are potentially exposing themselves and the corporation to liability that could easily be avoided through full disclosure. One thing to remember is that just because you didn't know you were breaking the law doesn't mean you are innocent. Most of these problems can be remedied with some basic education of the Board of Directors as to exactly what their obligations and duties are and exactly what role a property manager should play. Too many property managers are essentially acting as if they were the board and simply updating the directors on their actions. I consider this to be a dangerous practice and I am hoping that revisions to the management of condominium properties by licensed professionals will soon be mandated by our governing bodies. That in itself will force many property management companies to improve the way they do business.

FOR THE RECORD: Not ALL property management companies suck. Most commercial managers are great to deal with because they treat it like the professional business it is. In my opinion, too many condominium property management companies don't do enough to educate the boards they serve nor do they understand the full obligations and fiduciary duties they owe those boards. Too many condominium management companies hide behind misguided interpretations of the Act or simply conduct themsleves so unprofessionally it makes it a challenge to properly serve the needs of a client in a condo transaction.
It is extremely refreshing to encounter a proactive board with a great property manager. All documentation is provided quickly and easily (usually online these days) and this makes the whole process of selling/buying condominiums much easier on the clients and the Realtors that serve them.

The regulatory changes can't come soon enough in my opinion. Until then, it pays to have a real estate professional that truly knows what to look out for, and how to prevent or overcome the problems, associated with a condominium transaction.

posted in General at Tue, 18 Sep 2012 14:16:26 -0600

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