Statutory Responsibilities of a Condominium Manager
Condominium managers in Alberta must adhere to the Real Estate Act Rules, which outline their duties and ethical responsibilities.
Key Responsibilities Under the Real Estate Act Rules:
A condominium manager must:
Act honestly and with integrity in all dealings with condominium corporations, owners, and the public.
Ensure compliance with condominium legislation and act in the best interest of the condominium corporation.
Maintain accurate financial records and safeguard funds held on behalf of the corporation.
Properly manage contracts and service providers related to maintenance, repairs, and condominium management.
Disclose conflicts of interest and avoid situations where personal interests may interfere with professional duties.
Provide timely and accurate communication to condominium boards regarding financial and operational matters.
Follow regulatory requirements for trust accounts and reserve funds to ensure financial transparency.
Legislative Reference: A condominium manager must act honestly, lawfully, and in good faith in fulfilling their obligations under the condominium management services agreement.
Ensuring Compliance with CPA Regarding Reserve Funds and Financial Reporting
A condominium manager plays a critical role in ensuring a condominium corporation follows the CPA’s financial requirements, particularly regarding reserve funds and financial reporting.
Reserve Funds Compliance
The Condominium Property Act (CPA) requires a condominium corporation to establish and maintain a reserve fund to cover major repairs and replacements of common property.
Every condominium corporation must conduct a reserve fund study at least once every five years.
The corporation must prepare a reserve fund plan based on the study and ensure adequate funding.
The reserve fund cannot be used for daily operating expenses.
Financial Reporting Compliance
The condominium corporation must prepare and provide financial statements to unit owners annually.
The board must ensure that financial records are accurate and up to date.
A condominium manager is responsible for tracking income and expenses, preparing reports, and advising the board on financial matters.
Failure to comply with these financial requirements can result in penalties and legal consequences under the CPA.
Preparing and Presenting Financial Reports to a Condominium Board
A condominium manager must prepare financial reports that comply with legislative requirements and present them effectively to the board.
Steps to Prepare a Financial Report
Gather financial data (e.g., revenue from condo fees, operating expenses, reserve fund balance).
Prepare an income statement, showing revenue and expenses.
Update the reserve fund report, ensuring it aligns with the most recent study.
Check for discrepancies or irregularities in the financial records.
Ensure compliance with CPA and Condominium Property Regulation requirements.
Draft a financial summary for the board, highlighting key areas of concern or improvement.
Presenting Financial Reports to the Board
Use clear, concise language to explain financial details.
Provide visual aids (e.g., charts or tables) to illustrate financial trends.
Identify potential financial risks and propose solutions.
Answer board members' questions and provide recommendations based on legislative requirements.
Example Scenario:
A condominium board is concerned about rising maintenance costs. As a condominium manager, how would you present financial data to address their concerns?
Review past maintenance expenses and compare them to budgeted amounts.
Explain if reserve fund contributions are sufficient.
Recommend cost-saving measures while ensuring compliance with CPA financial regulations.
Comparing the Duties of a Condominium Manager and a Property Manager
Both condominium managers and property managers operate under the Real Estate Act Bylaws, but their roles have key differences.
Key Differences Between a Condominium Manager and a Property Manager
Aspect | Condominium Manager |
Legal Authority | Acts under the Condominium Property Act and assists the condominium board. |
Primary Responsibilities | Financial management, reserve fund administration, bylaw enforcement, and board advisement. |
Decision-Making | Works with the condominium board, which makes final decisions. |
Funds Management | Manages condominium fees and reserve funds according to CPA regulations. |
Aspect | Property Manager |
Legal Authority | Acts under the Residential Tenancies Act and directly manages rental properties. |
Primary Responsibilities | Leasing, rent collection, tenant relations, and maintenance of rental units. |
Decision-Making | Makes independent decisions on behalf of property owners. |
Funds Management | Handles rental income and security deposits for individual landlords. |
Implications for Licensing
Since condominium managers have unique responsibilities related to reserve funds, financial compliance, and board governance, they require a separate licensing process under the Real Estate Act Rules.
