Recognizing Legitimate Grounds for Disputing an Invoice
Why is Invoice Review Important?
If an invoice contains errors or unjustified charges, paying it without review can lead to:
Overpayment for services that were never provided.
Financial strain on the condominium corporation’s budget.
Potential legal disputes due to non-compliance with contract terms.
Legitimate Grounds for Disputing an Invoice
To ensure fair billing, condominium managers should check for the following issues before approving payment:
1. Overcharging
The invoice exceeds the agreed-upon rates in the contract.
Charges do not match previously approved estimates or agreements.
Example: A landscaping company’s contract states a monthly fee of $2,500, but the invoice requests $3,000.
2. Unauthorized Services
The invoice includes charges for work that was not approved.
Extra services were performed without prior authorization from the board or management.
Example: A maintenance provider repairs five additional units without board approval and bills for the extra work.
3. Non-Compliance with Contract Terms
The billing frequency does not match the contract (e.g., billed bi-weekly instead of monthly).
The service provider fails to meet contractual obligations, yet still invoices in full.
Example: A janitorial company is contracted for five cleanings per week but only completes three, yet still submits an invoice for the full amount.
The Invoice Dispute Process
When an invoice issue arises, handling it professionally and efficiently ensures a fair resolution while maintaining good relationships with vendors.
Step 1: Initiate Communication with the Service Provider
Reach out immediately once a discrepancy is identified.
Remain professional—assume errors are unintentional unless proven otherwise.
Request an itemized breakdown of disputed charges.
Example: The condominium manager contacts the contractor: "We noticed the invoice exceeds the agreed rate by $500. Can you provide clarification or a corrected invoice?"
Step 2: Document Concerns
Maintain written records of all communication, including:
Emails
Letters
Meeting notes
Attach copies of contracts, service agreements, and previous invoices to support the dispute.
Example: The manager keeps an email trail showing that no approval was given for extra charges.
Step 3: Seek Mediation or Legal Recourse if Necessary
If discussions do not resolve the issue, explore mediation or legal action.
The Condominium Property Regulation outlines formal dispute resolution processes, ensuring procedural fairness.
Example: The board hires a mediator to negotiate a resolution with a contractor who refuses to adjust overcharges.
Resolution Strategies to Manage Invoice Disputes Efficiently
1. Establish Clear Guidelines for Invoice Review
Create a formal policy that outlines how invoices should be reviewed before payment.
Require dual approval (e.g., condominium manager and board member) for invoices above a specified amount.
Example: The board implements a rule: Invoices over $10,000 require three board members’ approval before payment.
2. Assign Responsibilities to Manage Disputes
Designate specific individuals to handle disputes, ensuring accountability.
Ensure the management team is aware of the dispute resolution process.
Example: The finance committee is tasked with reviewing invoices, while the condominium manager handles vendor discussions.
3. Provide Regular Training on Invoice Management
Train staff and board members to recognize common billing errors.
Educate team members on contract terms and payment schedules.
Example: The condominium management team attends annual workshops on financial oversight and contract compliance.
