The condo manager must stipulate, in the contract for services, the scope and the cost of his services for the co-ownership’s day-to-day management. Day-to-day management includes the usual acts usually included in the basic package. The manager may also charge for additional remuneration for "supplementary" services. Therefore, it is necessary to specify the services included in “day-to-day management”, to avoid arguments, or having to pay unforeseen additional fees.
Preparing detailed specifications helps the syndicate to identify the nature of the basic services it expects. Before entering into the contract, it is necessary to question oneself on the scope of the mandate to be devolved to the manager. Does the board of directors wish to delegate in whole or in part the day-to-day management (administrative, financial and real estate) of the co-ownership? Regardless of the scope of the mandate, the remuneration of the manager should correspond to the scope of his tasks. It should be noted that the manager who accepts a ridiculous low fee could be incompetent, and undermine the future of the co-owner’s community. Every syndicate must keep in mind the old saying, “One always get his money’s worth.”
Day-to-day management fees
Essentially, the cost of the manager’s services is based on the number of hours spent ensuring the preservation of the immovable, as well as its administration. His fees vary according to the number of apartments and co-owners to be served, the age of the building, and also the complexity of the co-ownership’s legal structure (e.g. co-ownership by phases and servitude). Other factors are also taken into account, such as recreational facilities (e.g. swimming pool, exercise room, sauna and guest suites), the number of employees and the budget allocated to its operation.
His compensation is usually part of an annual fixed fee. The contract for services should specify the services included therein. Although fixed price contracts is only one of the methods of remuneration among others, it is the one usually recommended and is based on the number of doors (private residential portions). For example, in a co-ownership comprising 10 apartments, the unit cost per door is multiplied by 10, and then multiplied by 12 months. If the cost is $ 35 per door, it will cost the syndicate $ 4,200 annually to contract out the day-to-day management of the co-ownership.
Additional services fees
In special circumstances, the manager may charge additional fees. The contract for services should therefore list the services to be paid over and above the basic fixed fee, and their cost. These additional fees may be payable at a pre-agreed hourly rate, or for a pre-established fixed amount.
Additional services bill could be related to:
The contract for services should also specify the costs and fees payable by the co-owners. For example, at the occasion of the sale of a private portion, the manager may be required to fill documents such as as the notary’s questionnaire or the broker’s questionnaire. The costs for such services should be paid by the co-owner-seller.
Personalized management fees
Some managers offer customized services. They are intended for small co-ownership projects that wish to reduce the tasks of the directors, by relying on the services of an experienced manager. Depending on the specific needs of each co-ownership, the manager could, for example, agree on an hourly rate to take over the immovable's stewardship, or a lump sum to handle accounting.
The manager cannot charge for a service that does not directly concern his function. He must act with integrity in all circumstances, and avoid conflicts of interest with stakeholders within the co-ownership, such as service providers and co-owners. Thus, the manager must refuse any compensation or any gifts whatsoever, which could be offered by these people.
WHAT YOU SHOULD KNOW ! A manager's fees may seem higher for small co-ownership projects, as fixed charges are spread over a smaller number of apartments. It should be noted that many managers and management firms consider that small co-ownerships are not profitable. The latter sometimes require as much work as larger co-ownership.
WHAT TO KEEP IN MIND : The remuneration of the managers is generally a fixed fee, as specified in a contract for services. Additional specific compensation may also be charged if additional services are required in addition to the basic fixed fee.
WARNING ! Beware of ridiculously low prices proposed by some managers. Their remuneration must be adequate, otherwise the services offered may not be up to expectations, or even be downright unacceptable.