Contract of the Manager

The work of the condo manager is not governed by Law. As a general rule, it is up to the board of directors to set the guidelines of the management contract, according to the size and characteristics of the co-ownership. As for the terms and conditions of appointment and replacement of the manager, they are generally provided in the constituting act of the declaration of co-ownership.

Although there is no provision of the law requiring a written contract with the manager, it is strongly recommended that one be executed. This document is essential to the sound management of a co-ownership. It will avoid misunderstandings on the nature of the services to be rendered, as well as their financial terms and conditions of execution.

Essentially, there are two types of contractual arrangements between a syndicate of co-owners and a manager: the contract of employment and the contract for services.

 

Contract of employment

Some syndicates of co-owners prefer hiring an employee to insure the autonomous management of their co-ownership (self-management). Yet, this position, like all others, is governed by a contract of employment. In this case, the manager undertakes to work under the supervision or control of the board of directors as a salaried employee of the syndicate of co-owners.

To properly define all the manager tasks, the syndicate should draft a contract of employment. Thus, it may stipulate the mandate’s commencement date and its term (fixed or indeterminate), the job description; the compensation; the work schedule; the probation period (if applicable); the vacations and holidays; the notice of resignation (reasonable notice period); the notice of termination of employment and any other special clauses.

Contract for services

In turn, under a contract for services the manager or his enterprise (the service provider) undertakes to supply services to the syndicate (the client), for a fee. This type of contract provides (minimally) the effective date of the services, the duration and the expiry of the contract (resiliation by the effect of the Law, resiliation by the syndicate or the manager), its possible renewal, the description of the services offered, their rates and terms of payment.

Since it is bound by contract for services, and not by a contract of employment resulting from being hired, this type of manager has (in principle) free choice of the means of execution, since he is not bound under a relationship of subordination. However, the syndicate is entitled to have expectations toward the manager, as well as to evaluate the quality of his work and of the services.

To improve co-ownership management and increase the transparency of the manager toward the syndicate, the “Regroupement des gestionnaires et copropriétaires du Québec”(Québec Association of Managers and Co-owners) has created a standard contract for services precedent designed specifically for managers and directors. This contract lists the basic services that managers must deliver, while distinguishing those that are considered as additional or supplemental services or benefits.

 

Services relating to the contract for services

It is the responsibility of the board of directors to specify in the contract the nature of the services. Nevertheless, co-ownership managers usually propose their own contracts, including the services in accordance with their vision. This does not mean, however, that its content will meet all the requirements of a syndicate. It should therefore be read carefully, and then adding items and clauses as necessary, because the proposed contracts are negotiable.

In addition, to avoid confusion, the syndicate should indicate the various administrative, financial and technical tasks entrusted to the manager. The management contract must also provide a description of the various basic services, such the number of weekly, monthly or annual visits to the immovable, the required presence of the manager at the meetings of the board of Directors, etc. The syndicate must also clearly spell out tasks considered to be supplementary, such as claims handling, archiving and work supervision.

The contract binding the syndicate to the manager should be unequivocal on the remuneration of the latter (lump sum, cost plus or a combination of various criteria), by separating the amount of the basic fees for management, from other types of fees that could be claimed. The so-called "complementary" benefits or services are not included in the basic services. They usually give rise to additional fees.

 WHAT YOU SHOULD KNOW ! The distinction between a contract of employment (employee) and a contract for services is fundamental. The employee is subordinate to the employer, unlike the service provider, who has (in principle) free choice of the means of execution of the contract.

WHAT TO KEEP IN MIND : In order to properly define the manager's remuneration, the terms and conditions of the contract for services generally distinguish basic benefits from those that are supplementary.

 WARNING ! The preparation of a contract for services is essential to the sound management of a co-ownership. This document should establish a limited list of supplementary services as they involve additional remuneration.

 

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