The expense statements of a building show the various expenses related to its maintenance and management. While the cleaning items in the common areas or the elevator maintenance costs are easily understandable, many condominium owners do not have a clear idea of what the condominium management fees cover.
Defining Condominium Management Fees
The co-ownership and the manager retained to administer the building are bound by a service contract detailing the current services entrusted to the manager as well as his basic remuneration. It also includes optional services whose cost will be added to the basic fee if the co-ownership entrusts additional tasks to the manager.
Ongoing Management Fees
During the building visit carried out prior to the proposal addressed to the syndicate of co-owners, the manager evaluates the work time to be devoted by his team to administer the building and coordinate all building maintenance operations. To do so, he shall take into account the following criteria in particular:
- The condition of the co-ownership (a building in poor condition requires more time than a building that is regularly maintained)
- The nature and number of community facilities (for example, managing a building with a swimming pool, a gym, or a collective heating system is more time-consuming than a co-ownership with few common areas and whose condos are equipped with individual heating systems)
- The number of doors (the management of 10 buildings with 10 doors takes more time than the management of a building with 100 doors, in particular, because each co-ownership has to meet at least once a year in a general meeting)
- Possible problems with co-ownership (existence of legal proceedings against a supplier, neighbor, developer etc., difficulties in recovering common expenses)
- The presence of building employees (which implies recruitment, replacement during holidays, payroll management, possible dismissal etc.).
Based on these criteria, it establishes a monthly “per-door” rate which multiplies by the number of private units and then by 12 in order to deduct an annual lump sum. The manager also details the scope of the routine tasks covered by these fees in the contract.
Additional management fees
Co-ownership management fees consist of base fees and additional remuneration. The following services are generally excluded from the basic contract and can be charged by the hour or by the piece, depending on the case:
- the preparation, holding, and disbursements related to extraordinary general meetings
- additional meetings with the Board of Directors (the basic contract including a number of)
- expenses related to the sending of invitations to the general meetings of co-owners and the notification of the minutes (copying and mailing costs…)
- claims management
- management of disputes and legal proceedings
- monitoring and management of certain works
- assistance from the manager outside the hours indicated in the contract.
Please note that certain additional fees and costs are directly attributable to a co-owner. This is the case, in particular, for costs related to a special general meeting held at the request of a co-owner, or to the responsibilities established by the manager to a request for information from the syndicate of co-owners or to a notarial questionnaire, which are commonplace in the context of a sale.
Since the law leaves it up to the parties to determine the clauses of the management contract, it is in the best interest of the board of directors of the co-ownership to define precise specifications that will be used to draw up the contract. This will list the tasks incumbent on the manager and included in the basic rate, as well as the additional services, thus avoiding any unpleasant surprises when the time comes.