Required Documentation and Records When Assuming Management
When a condominium manager takes over from another management company, specific records and documents must be obtained to ensure legal compliance and smooth operations. The Real Estate Act Rules and Condominium Property Act (CPA) outline what must be transferred.
Key Documents to Obtain from the Outgoing Management Company:
Financial Records:
Operating fund and reserve fund statements
Most recent audited financial statements
Accounts receivable/payable records
Condominium fee collection reports
Legal and Governance Documents:
Condominium bylaws and any amendments
Board meeting minutes and AGM records
Current service agreements (e.g., maintenance, security, insurance)
Outstanding legal claims or disputes
Owner and Tenant Information:
List of unit owners and contact details
Owner account balances, including arrears
Tenant lease agreements (if applicable)
Operational Records:
Building maintenance logs
Warranties and purchase protection plans
Insurance policies and claims history
Legislative Reference:
A condominium manager who ceases to provide condominium management services must, within a reasonable time, transfer control of all records, financial information, and trust funds to the condominium corporation or the new condominium manager. If the outgoing manager fails to provide these records, it can result in financial and operational disruptions, potential legal action, and regulatory penalties under Alberta’s condominium management legislation.
Role of a New Management Company in the Transition Process
When assuming management, the incoming management company plays a critical role in ensuring a smooth transition by:
Reviewing and Verifying Records
Conduct a thorough review of financial records to detect discrepancies.
Ensure that reserve fund contributions align with the latest reserve fund study.
Confirm that the condominium fees collected match expected revenues.
Communicating with Key Stakeholders
Board of Directors: Provide updates on the transition process and outstanding issues.
Unit Owners: Send an introduction letter with new contact details and management policies.
Service Providers: Confirm ongoing contracts and payments to prevent service disruptions.
Ensuring Compliance with Legal and Financial Regulations
Confirm the outgoing manager reconciled all trust accounts before transfer.
Ensure reserve funds were not misused for operating expenses.
Verify that insurance policies are active and sufficient for common property coverage.
Handling Delays or Missing Documentation
If the outgoing manager fails to provide required records, escalate the issue to:
The condominium board.
Real Estate Council of Alberta (RECA) for regulatory enforcement.
Legal counsel if financial mismanagement is suspected.
Key Takeaway:
The incoming manager is responsible for identifying and addressing gaps in records, ensuring compliance, and preventing financial or operational disruptions.
Developing a Takeover Checklist
A structured checklist ensures all critical areas are reviewed and documented when assuming condominium management.
[Takeover Checklist for Condominium Management]
1. Financial Review
☐ Obtain most recent financial statements (operating and reserve fund reports).
☐ Verify owner account balances, including any arrears.
☐ Ensure all vendor invoices are accounted for and paid.
☐ Confirm reserve fund contributions and compliance with the most recent study.
2. Governance and Compliance Review
☐ Obtain and review condominium bylaws, rules, and policies.
☐ Review most recent board meeting minutes and AGM reports.
☐ Ensure compliance with CPA requirements for financial transparency.
☐ Confirm pending legal disputes or outstanding regulatory violations.
3. Operational and Vendor Management
☐ Identify all existing service contracts (e.g., cleaning, maintenance, security).
☐ Review purchase protection and warranty agreements.
☐ Ensure a maintenance log is available for common property assets.
4. Owner & Tenant Communication
☐ Obtain a list of owners and tenants with contact details.
☐ Draft and distribute an introduction letter to all unit owners.
☐ Provide owners with updated payment instructions for condominium fees.
Application Exercise:
Using this checklist, simulate a takeover scenario and identify any potential risks if key documents are missing.
Comparing Transitions with Cooperative vs. Uncooperative Outgoing Managers
The ease of transition depends on the cooperation of the outgoing manager. Below is a comparison of best practices for both scenarios.
Best Practices for a Cooperative Transition
Step | Best Practice |
Record Transfer | Outgoing manager provides all documents within the required timeframe. |
Financial Reconciliation | Trust accounts and financial statements are balanced before transition. |
Board & Owner Communication | Joint transition meetings help ensure transparency. |
Vendor Coordination | Service providers are informed and contracts remain active. |
Best Practices for Handling an Uncooperative Transition
Step | Risk |
Delayed Record Transfer | Missing financial records create accounting gaps. |
Trust Account Issues | Unresolved discrepancies may suggest mismanagement. |
Lack of Communication | Owners are unaware of changes, leading to confusion. |
Contractor Disruptions | Service providers may not receive notice. |
Step | Solution |
Delayed Record Transfer | Board should escalate to RECA or seek legal intervention. |
Trust Account Issues | Conduct an independent financial audit immediately. |
Lack of Communication | Send formal notification letters to all stakeholders. |
Contractor Disruptions | Contact vendors directly and confirm contract terms. |
Case Study: Uncooperative Transition
A condominium corporation switches management companies, but the outgoing manager refuses to transfer financial records on time. As a result:
The new manager cannot reconcile owner accounts, leading to billing errors.
Condominium fees are misallocated, resulting in delays in vendor payments.
The board has to hire legal counsel to recover missing records.
Analysis Questions:
Which CPA and RECA regulations were violated?
What financial and operational risks did the corporation face?
What actions should the new management company take to resolve the issue?
Key Takeaway:
The new management company must prepare for obstacles in transitions, escalate issues appropriately, and ensure compliance despite challenges.
