Service Agreement Requirements Between Condominium Corporations and Managers
What is a Service Agreement?
A service agreement is a legally binding contract between a condominium corporation and a condominium management brokerage, outlining the scope of management services, financial arrangements, and obligations of both parties.
Key CPA Regulation Requirements for Service Agreements
Must be in writing and signed by the condominium corporation and the brokerage.
Must include specific mandatory elements, such as:
The legal names of both parties.
The address of the condominium property.
A detailed list of services the manager is responsible for providing.
Fee structure and payment schedules.
Duration of the agreement and conditions for renewal or termination.
Dispute resolution procedures in case of contract disagreements.
The condominium corporation must receive a copy of the signed agreement.
Example: A condominium manager cannot begin providing services unless a written service agreement is in place as required under the CPA Regulations.
Legislative Reference: The Condominium Property Regulation mandates that all service agreements must be in writing and include clearly defined terms of service.
Financial Disclosure Obligations Under the CPA Regulations
Financial transparency is a key responsibility of condominium managers, ensuring owners have access to accurate and timely financial information.
Required Financial Disclosures to Owners
The CPA Regulations requires condominium corporations to provide owners with:
Annual budgets before the start of each fiscal year.
Financial statements, including income, expenses, and reserve fund reports.
A notice of fee increases or special assessments before implementation.
Reserve fund study reports to show how major repairs and replacements will be funded.
Example: A condominium board cannot increase condo fees without providing written notice and justification to owners.
Timeline for Disclosure
Owners must receive the budget at least 30 days before the start of the fiscal year.
The reserve fund study must be updated every five years.
Example: A manager fails to distribute the budget before the fiscal year starts. This would be a violation of the CPA Regulation's financial disclosure rules.
Legislative Reference: The CPA Regulation requires corporations to provide owners with timely access to financial information, including budgets and reserve fund reports.
Handling Bylaw Enforcement and Owner Disputes in Compliance with the CPA Regulations
Enforcing Condominium Bylaws
Condominium managers must ensure bylaws are consistently and fairly enforced. The CPA Regulation outlines the following enforcement process:
A written notice must be provided to an owner or tenant violating a bylaw.
The notice must specify the bylaw breached and the required corrective action.
The board may impose sanctions, such as fines, if permitted by the bylaws.
The owner must have an opportunity to respond before penalties are enforced.
Example: If an owner repeatedly parks in a restricted area, the board must provide written notice before issuing fines.
Handling Owner Disputes
If a dispute arises between an owner and the condominium corporation:
The board must follow the dispute resolution process outlined in the bylaws.
Mediation or arbitration may be required before legal action is taken.
The manager must document all correspondence and actions related to the dispute.
Example: A unit owner disagrees with a noise violation fine. The board must provide the owner with a chance to appeal before escalating the matter.
Legislative Reference: The CPA Regulation states that owners must receive proper notice and an opportunity to respond before sanctions can be imposed.
Compliance Policy Development
Scenario:
A condominium manager imposes fines on a resident without giving prior written notice.
Your Task:
Identify which CPA Regulation section was violated.
Explain how the manager should have handled these situations correctly.
Develop a checklist that managers can use to ensure compliance with CPA.
Correct Answer:
The manager violated CPA Regulation section 73.7(1) by issuing fines without prior written notice.
A compliance checklist should include:
Timely financial disclosure reminders.
Proper documentation of all bylaw enforcement actions.
Required approval steps before imposing fines or penalties.
