By Alan Rosenberg
A.R. Consulting

ecently, I heard someone say: “Management agreements should be fair to both sides.” Fair, my eye. Fairness has little or nothing to do with it.

The Management agreement between a service provider and a particular condominium corporation must, as accurately and pragmatically as possible, incorporate the elements of the management routine deemed most suitable to that very condominium corporation.

Not so easy, is it? After all, who does the “deeming?” Management? The Board? An arbitrator? Judge Judy?

I don’t for one minute deny the need for standard, reasonable criteria in certain areas of condominium management agreements. These criteria are essential to the process of establishing principles of conduct, while maintaining at least a minimum template of (a) management behaviour and (b) Board member expectations.

It’s those darned expectations, however, that make condominium life intriguing. Why? Because those expectations are a moving target. As any manager will tell you, there is often very little consistency between:

  • what the Board expects and what the Board should expect
  • what the Board expects and what the condominium’s other residents expect
  • what one Board expects as opposed to another one across town
  • what one Board member expects, as opposed to another member of the same Board
  • what, for instance, the new President expects as opposed to the outgoing President

At first glance, the obvious answer would seem to be one of almost self-defense: a standard management agreement with specific, unchallengeable criteria, a document which leaves no room for doubt, and ignores the vagaries of the above list. In that scenario, the relationship between management and Board can be easily defined in terms of standard “management duties and responsibilities” to be included in the management agreement, such as:

  • term of agreement
  • collections, disbursement of CEA funds
  • enforcement of relevant legislation (declaration, by-laws, rules)
  • communication (Board and owners)
  • staff supervision
  • overseeing of trades, contractors
  • inspections and maintenance routines
  • contracts
  • inventory
  • emergency procedures
  • management reports
  • record keeping, statement reporting, budgets
  • meetings (Board and general)

These points cover most of what constitutes the minimum management performance standard. But what about the relationship between management and the Board? Is that fully addressed by the above list?

Stated another way, I always suggest to my clients and potential clients the following formula: (A): Management advises the Board on policy; (B): the Board uses this and all other relevant advice to set policy; (C): Management carries out this policy; (D): the Board makes sure step (C) takes place. For those of you, either Board members or management personnel, who have experienced frustrations of one sort or another in your professional condominium relationship(s) (namely everyone), can this formula be fully achieved using a management agreement incorporating the points listed above?

The answer may well lie hidden in the fourth point of the list: Communication to Board and owners. In fact, most agreements address this item in terms of:

· advisement and consultation with the Board (re by-laws, etc, etc,etc)
· communication with the unit owners (by-law enactment, general meetings, etc)

What happened to Communication with the Board? If Board/management conflicts are in any way caused by misinterpretations, inconsistencies in levels of understanding, differing expectations, general lack of knowledge of basic facts, and so on ad nauseum, shouldn’t the management agreement attempt to solve this most fundamental set of problems? Shouldn’t it be a contractual requirement for the Board and management to be regularly apprising one another of expectations, industry standards, realities versus misconceptions, and so on?

One might argue that the monthly management reports are a sufficient reporting vehicle. Or one might say that common sense usually prevails in professional relationships. (“Who needs a contractual clause telling the parties thereto to talk to one another?”)

I would respond by telling you that, in my travels, I see no shortage of common sense, heroic effort, and good intentions exhibited by (mostly) unpaid Board members, and (not always well) paid management personnel. Yet misunderstandings abound, even decades after the inception of condominium management. And from misunderstandings come discord, aggravation, lost contracts and upheaval.

Instead, what if the management agreement compelled the two parties to actually sit down periodically and talk to each other? What have we got to lose?


Alan Rosenberg
A. R. Consulting
November 6th, 2002

 




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