#17 – Stratas Managers

The attendees to the Vancouver Island Strata Owners Association 2007 Annual General Meeting in Victoria, were treated to an address by Mr. Tino Di Bella, a lawyer specializing in Strata law and a great supporter of the Association.

His very informative address dealt with the changes to the rules governing the licensing and operations of Strata Management companies, but there were several points made that are of particular importance from the perspective of Long Term Maintenance Planning.

For those Stratas who have engaged a management company, one of Mr. Di Bella’s points is to note that, under the Strata Property Act, a Corporation has the right to contract out “parts, but not all” (our emphasis) of the management responsibilities.

The point here is that a Strata Corporation and its Directors are no less responsible for the management of the property because a contracted manager is involved, and it is that very “contract” that should state very concisely what the management company will undertake.

As most of these contracts are generated by the management company, we suggest that councils review this document carefully to see, not so much what the managers will do, as what’s not included in their list of responsibilities.

We also suggest that although any competent manager will promote the development of Long Term Maintenance Plans, most of the contracts will have little if any language stating that the management company will undertake this planning.

Part of the benefit of engaging a Strata Manager is that it frees up the Council from the day-to-day business operations and offers more opportunity to assess the long term requirements of the property and its structures. In our opinion, this “strategic” planning should not be part of the manager’s duties in any case, other than to provide information to help the Council in the process.

This is the “…but not all” portion that many Corporations forget.

The other thing that many forget is that the management company is only a contractor which, in turn, must be managed by the Council. The Strata cannot relinquish its fiduciary obligations to its owners by simply signing a contract.

But, as Mr. Di Bella also pointed out, there is a point of “critical mass” in the size of a Strata Corporation’s business when it is wise to bring in a professional to assist in its management.

Sometimes we must remind our clients that their strata home is really part of a business, with assets worth several million dollars. When you come right down to it, the business of a Strata Corporation is Asset Management and most companies with any significant real estate holdings will look to a professional to help them.

John Grubb is a Property Maintenance Consultant serving Strata Corporations and building owners on Vancouver Island.

To Next Article: Contingency Reserve Fund Allocation vs. Special Assessments

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