Demonstrating Negotiation Strategies
The Condominium Property Regulation requires that the condominium corporation act in the best interests of the owners when entering into contracts.
WHAT YOU'LL LEARN
Demonstrating Negotiation Strategies
Analyzing Communication Techniques in Negotiations
Evaluating Negotiation Outcome
Demonstrating Negotiation Strategies
The Condominium Property Regulation requires that the condominium corporation act in the best interests of the owners when entering into contracts. It states: A corporation shall not enter into a contract or transaction except in accordance with the directions, instructions, or authorization of the board.
Condominium managers must act as intermediaries to ensure vendor contracts align with the board’s directions, protect the corporation’s interests, and comply with relevant legislation.
Negotiation Strategies to Align with Board Directions
Preparation:
Understand the board’s priorities, such as budget constraints, timelines, and quality standards.
Review relevant vendor proposals and supporting documents provided by the board.
Vendor Communication:
Present the board’s specific expectations clearly to the vendor. For example, specify that the contract should comply with terms agreed upon in a board meeting (e.g., "The board requires delivery of services within 30 days.").
Avoid committing to decisions not pre-approved by the board.
Contract Terms Negotiation:
Negotiate terms that reflect the board’s interests. For instance, advocate for cost savings by requesting bulk pricing or discounts for long-term contracts.
Scenario: Vendor Contract Negotiation
Scenario: The board has directed the condominium manager to negotiate a landscaping contract. The budget is capped at $50,000 annually.
Task: Use negotiation strategies to present the board’s priorities to the vendor while remaining within budget constraints. Highlight terms such as timely service and adherence to environmental standards, as discussed in the board meeting.
Activity:
Draft a brief email to a vendor that communicates the board’s instructions and outlines negotiation points. Ensure your draft reflects compliance with the Condominium Property Regulation.
Analyzing Communication Techniques in Negotiations
A condominium manager must act in good faith, exercising reasonable skill and care to ensure that the corporation’s obligations are met. This includes engaging with contractors and service providers during negotiations.
Effective negotiation requires choosing the right communication technique—persuasive or collaborative—depending on the situation.
Types of Communication Techniques
Persuasive Communication:
Focuses on convincing the vendor to agree to terms that benefit the condominium corporation.
Example: Negotiating a lower price by emphasizing the volume of work provided by the corporation.
Collaborative Communication:
Focuses on building a mutually beneficial relationship with the vendor to achieve long-term value.
Example: Offering flexibility on deadlines in exchange for better warranty coverage.
Scenario: Choosing the Right Technique
Scenario: A roofing contractor quotes $15,000 for repairs, exceeding the board-approved budget of $12,000.
Persuasive Approach: Emphasize that the corporation has received a lower quote from a competitor, encouraging the contractor to reconsider their pricing.
Collaborative Approach: Work with the contractor to identify areas where costs could be reduced without compromising quality (e.g., using alternative materials).
Evaluating Negotiation Outcomes
The Condominium Property Act requires that any contracts or actions taken on behalf of the corporation align with the board’s instructions. It emphasizes that managers must uphold the corporation’s legal and financial responsibilities.
When evaluating negotiation outcomes, consider the following:
Did the terms of the agreement align with the board’s instructions?
Were the corporation’s financial interests protected?
Did the negotiation achieve added value, such as extended warranties or cost savings?
Steps to Evaluate Outcomes
Review Contract Terms:
Compare the final contract with the board’s initial instructions. Ensure compliance with budget constraints and service expectations.
Assess Vendor Performance:
Evaluate the vendor’s willingness to accommodate the board’s priorities during negotiations.
Post-Negotiation Reporting:
Document the outcome of the negotiation and submit a report to the board. Highlight any areas where the negotiation deviated from the original instructions and provide a rationale.
Scenario: Evaluating a Vendor Agreement
Scenario: The condominium manager negotiates a cleaning contract for common areas. The board instructed a budget of $8,000, but the final contract is for $8,500.
Evaluation Framework:
Did the manager attempt to stay within the budget?
Was the additional cost justified by added value (e.g., extra services)?
Was the deviation from board instructions communicated to the board prior to finalizing the agreement?
