Lawful Delegation of Duties Under the Ministerial Regulation
The Ministerial Regulation outlines the responsibilities of condominium managers and specifies which tasks may be lawfully delegated to others.
Duties a Condominium Manager May Delegate
A condominium manager may delegate certain operational and maintenance tasks, including:
Routine maintenance (e.g., landscaping, snow removal, minor repairs).
Vendor coordination (e.g., hiring and managing contractors for common property repairs).
Administrative tasks (e.g., preparing meeting agendas, processing unit owner requests).
Basic financial processing (e.g., collecting condo fees, paying invoices, record-keeping).
Duties a Condominium Manager May NOT Delegate
The Ministerial Regulation states that a condominium manager must not delegate:
Decision-making responsibilities related to financial planning, reserve funds, or legal matters.
Trust fund management, including holding or disbursing funds without board authorization.
Signing legal documents on behalf of the condominium corporation.
Legislative Reference: A condominium manager must not delegate responsibilities related to the handling of trust funds, signing of contracts, or providing advice to the board.
Legal Implications of Improper Delegation Under the CPA
Improper delegation can have serious legal consequences for both the condominium manager and the condominium corporation.
Potential Legal Risks of Improper Delegation:
Breach of Fiduciary Duty – The condominium manager has a legal duty to act in the best interest of the condominium corporation. Improper delegation may breach this duty, leading to legal liability.
Financial Mismanagement – If financial responsibilities (e.g., reserve fund administration) are improperly delegated, the corporation may fail to meet CPA financial requirements.
Contractual and Legal Liability – Unauthorized delegation of contract signing or legal decision-making may result in unenforceable contracts or legal disputes.
Regulatory Penalties – The Real Estate Council of Alberta (RECA) may impose fines or suspend a manager’s license for improper delegation under the Real Estate Act Rules.
Example of Improper Delegation:
A condominium manager assigns a bookkeeper to handle all financial transactions, including disbursing reserve funds. Since reserve fund management is a non-delegable responsibility, the corporation may face legal consequences under the CPA and Condominium Property Regulation.
Case Study: Improper Delegation and Corrective Action
Scenario:
Sarah, a condominium manager, is overwhelmed with her responsibilities. To ease her workload, she delegates the review and approval of financial statements to a junior administrative assistant. She also allows the assistant to authorize payments from the reserve fund.
A few months later, the condominium board discovers that several unauthorized payments were made from the reserve fund, and no proper documentation exists. The board holds Sarah accountable for the financial mismanagement.
Questions for Analysis:
What errors did Sarah make in delegating tasks?
Which legislative provisions were violated?
What corrective actions should be taken?
Corrective Actions:
Sarah should immediately revoke the unauthorized delegation and take direct oversight of financial reporting.
The condominium board must conduct an internal audit and rectify unauthorized financial transactions.
Sarah should provide documentation of all financial activities to demonstrate compliance with the CPA.
To prevent future issues, the corporation should establish clear delegation policies that comply with the Ministerial Regulation.
Justifying Delegation of Maintenance vs. Financial Responsibilities
Not all condominium management tasks can be safely and legally delegated. It is important to determine when delegation is appropriate.
Comparison: Delegating Maintenance vs. Financial Tasks
Task Type | Appropriate to Delegate? |
Routine maintenance (e.g., cleaning, snow removal) | Yes
Does not involve financial or legal decision-making. |
Major repairs requiring board approval | No The board and manager must oversee budgeting and compliance. |
Vendor management | Yes Manager can coordinate but must ensure board approval for contracts. |
Reserve fund disbursement | No Only the board and manager can authorize reserve fund use under the CPA. |
Collecting monthly condominium fees | Yes This can be assigned to a bookkeeper but must be supervised by the manager. |
Preparing periodic unaudited financial statements | No The manager is responsible for ensuring financial accuracy and CPA compliance. |
Justification for Financial Responsibilities Not Being Delegated:
Trust Fund Protection: Improper handling of reserve or operating funds can result in legal liability for the corporation.
Regulatory Compliance: The CPA and Ministerial Regulation require strict oversight of financial transactions.
Board Accountability: The condominium board relies on accurate financial reporting to make informed decisions.
