Management types

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Every syndicate of co-owners should retain the services of a condo manager, to assist the board of directors carrying out its duties. As the needs of a co-ownership are multiple and complex he needs to be the one man band of the co-ownership and assume enormous responsibilities. This being said, there are three management modes associated with this function, namely: resident-managers (autonomous management), employees (self-management) and contractors (external manager). A review of the various missions that may be entrusted to them.

 

Autonomous management

The board of directors may ask one of its directors, or an occupant of the immovable to assume the day-to-day management of the co-ownership. This type of management is particularly suitable if the co-owners get along well and if they are a majority to be occupants. The choice of autonomous management corresponds especially to small co-ownership for which a condo manager is far too expensive in view of the expected services.

The advantage of using an “in house” manager stems from economic considerations. It allows co-owners reduced management fees. In most cases, the remuneration paid to these managers is symbolic. And since as a resident he is personally involved in the best interest of the immovable, chances are that he will be more attentive to daily problems, such as minor repair, which he may carry out at lower cost?

 That being said, autonomous management can be risky, as more often than not the person in charge does not have the skillset to carry out the job properly. Frequently the shortcomings are caused by:

  •  A lack of experience and knowledge due to insufficient or the absence of training in the field;
  • A lack of availability, on account of the manager’s other professional or personal activities;
  • A frequent flaw of failing to restrict the scope or time spent in carrying out his function;
  • In some cases, confusion between the best interest of the co-ownership and his own (risk of conflict of interest);
  • The failure to observe compulsory formalities.

For all these reasons, the choice of an in house manager should be considered (with exception) only for co-ownerships comprising a small number of units.

Self management

For large co-ownerships (200 units or more), a salaried manager is an advantageous solution. As he is the syndicate’s employee, he shall perform the tasks requested by the board of directors. In essence, he is bound by an employment contract with his employer, which establishes a relationship of legal subordination.

  The Resident Manager is a front-line resource and on account of his almost daily presence at the premises, he is often available to accomplish the tasks that the directors cannot or will not assume because of their lack of availability.

To optimize the resident manager's contribution, the board of directors must ensure that he satisfies several essential qualities such as:

  • Rigorous training and regular updating in the field;
  • Being familiar with all management aspects: administrative, financial or technical;
  • Being able to attend at the premises, on a daily basis, to satisfy the director’s needs, or to react quickly to emergencies;
  • Being able to remain independent in all circumstances, whether with co-owners or the syndicate.

 Warning: The various manager’s attributions raise the issue of the syndicate’s tax obligations. Is he an autonomous self-employed worker or an employee? The first mode might be cheaper, but it may not necessarily be a safe option. Caution must be exercised. It is necessary to clearly establish the status of the manager, whether he remains a self-employed person paid on a fee-for-service basis, or an employee whose taxes are to be collected at source. Failure to do so may result in a painful tax assessment.

External Manager

More and more syndicates of co-owners are mandating an external management firm, dealing at arm’s length with the co-ownership, to ensure the day-to-day management of their immovable. This external relationship is usually governed by a contract of services defining the scope and cost of the services.

 The management of a co-ownership by an external manager has many advantages. Since the latter is usually the employee of a management firm, theoretically he should be competent. Some firms, committed to their mission, set up a team of ressources (e.g. maintenance staff and accountants) according to the number of units to be managed. This type of management needs to rely upon, without limitation:

  • Specialized and duly trained staff;
  • The capacity to manage large co-ownerships, by proposing adequate budgets;
  • Relevant hands on experience which will benefit the syndicates of co-owners;
  • Access to a large network, which could lead to more advantageous contracts and rates, due to a large volume of business.

Do not be fooled by appearances: at first glance, the fees of an external manager may seem high. However, one must keep in mind that in large condominium projects, the task cannot be entrusted to only one person. This is especially true if he or she does not have the skillset to do all the work singlehandedly.

 

WHAT YOU SHOULD KNOW ! Condo managers are not governed by a professional order. Thus, it is in any syndicate of co-owners’ best interest to retain the right candidate, one who will abide to a code of ethics and of conduct in all circumstances.

WHAT TO KEEP IN MIND : There are three types of managers: those who work in autonomous mode, in self-management mode or who come from an external firm. As a result, there are three legal obligations levels.

 WARNING ! The management and maintenance of an immovable are not a walk in the park: one needs adequate legal knowledge, an understanding of building technology, of accounting and sometimes staff management experience.

 

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