Condominium Management Models
As per the Condominium Property Act, a condominium corporation may choose to self-manage by relying on its board of directors to fulfill operational, financial, and administrative responsibilities.
WHAT YOU'LL LEARN
Overview of Management Models
Advantages and Disadvantages of Each Model
Choosing the Right Management Model
Business Models of Condominium Manager Brokerages
Overview of Management Models in Alberta
Self-Managed Condominium Corporations: As per the Condominium Property Act, a condominium corporation may choose to self-manage by relying on its board of directors to fulfill operational, financial, and administrative responsibilities. A corporation may carry out its powers and duties through its board of directors.
Professionally Managed Condominium Corporations: A corporation may hire a licensed condominium manager to oversee operations. The manager must comply with the Real Estate Act Rules and Ministerial Regulations. A licensee authorized to provide condominium management services must act honestly, exercise reasonable care and skill, and comply with all rules under the Real Estate Act.
Partially Managed Condominium Corporations: A hybrid model where the board delegates some responsibilities to a manager while retaining control over certain areas.
Advantages and Disadvantages of Each Model
Self-Managed Model
Advantages: Full control over decisions; lower management costs.
Disadvantages: High burden on volunteer board members; lack of professional expertise in managing finances, legal compliance, or disputes.
Professionally Managed Model
Advantages: Access to professional expertise; better compliance with legislation; reduced workload for the board.
Disadvantages: Higher costs associated with management fees.
Partially Managed Model
Advantages: Board retains some control while outsourcing specialized tasks.
Disadvantages: Higher costs associated with management fees.
Choosing the Right Management Model
Key Factors to Consider
Size of the condominium corporation.
Complexity of operations (e.g., large financial budgets, maintenance contracts, number of units).
Governance requirements (as outlined in the Condominium Property Act and Regulations).
Scenario Analysis
Scenario: A 10-unit condominium corporation is deciding between self-management and hiring a professional manager.
Factors to consider: The small size may make self-management feasible, but the board must comply with financial reporting and maintenance obligations.
Business Models of Condominium Manager Brokerages
Overview of Brokerage Models Under the Real Estate Act Rules
Flat-Fee Model
Brokerages charge a fixed monthly fee for their services.
Advantages: Predictable costs, better budgeting for small condominiums.
Disadvantages: May not incentivize managers to handle extra or unforeseen tasks.
Commission-Based Model
Brokerages charge a percentage of costs or revenues.
Advantages: Aligns incentives with the condominium’s financial success.
Disadvantages: Can result in fluctuating costs.
