Scope of Services – Defining Responsibilities Clearly
Why is the Scope of Services Important?
A clearly defined scope of services ensures that both parties understand their obligations, reducing conflicts about expectations.
This section should list all tasks the condominium manager is responsible for, such as:
Financial Management
Collecting and managing monthly condo fees and special levies.
Preparing financial reports and budgets for the board.
Managing reserve fund contributions and expenses.
Maintenance Coordination
Overseeing routine maintenance and repairs.
Hiring and supervising contractors and service providers.
Responding to emergency repair requests.
Administrative Duties
Preparing meeting agendas and minutes.
Communicating with board members, unit owners, and service providers.
Ensuring compliance with bylaws and provincial regulations.
Additional Services (If Applicable)
Insurance claims assistance.
Legal compliance support.
Emergency response coordination.
Example:
A contract that only states “Manager will handle maintenance issues” is too vague. Instead, it should state:
"The manager will coordinate all maintenance requests, schedule repairs with licensed contractors, and ensure that service agreements include timelines, warranties, and cost estimates."
Financial Terms – Ensuring Transparency in Payments
Why is Clarity in Financial Terms Important?
Clear financial terms prevent misunderstandings and ensure the corporation knows its financial obligations.
A well-drafted contract should specify:
Compensation Structure
Fixed monthly or annual management fees.
Percentage-based fees (e.g., % of total condo fees collected).
Hourly rates for additional services.
Payment Schedules
Due dates (e.g., first of the month).
Accepted payment methods (e.g., EFT, cheque, direct deposit).
Late payment penalties (e.g., 2% interest on overdue invoices).
Additional Charges
Fees for after-hours emergency services.
Charges for special projects (e.g., major renovations).
Legal fees for handling disputes.
Example:
A well-written financial clause might state:
"The condominium corporation will pay a base management fee of $3,000 per month, due on the first day of each month. Additional services outside of routine management will be billed at $100 per hour, with prior board approval."
Duration and Termination – Protecting Both Parties
Why Are Contract Duration and Termination Terms Important?
A clear contract duration prevents unwanted renewals, and termination clauses ensure both parties can exit the agreement if necessary.
A well-structured contract should include:
Term of the Agreement
Start date and end date (e.g., January 1, 2025 – December 31, 2026).
Renewal terms (automatic renewal or board approval required).
Termination Conditions
Mutual agreement between the condominium board and manager.
Breach of contract (e.g., failure to perform duties).
Non-payment of fees by the condominium corporation.
Notice Requirements
The amount of notice required for termination (e.g., 60 days’ written notice).
Any exceptions for immediate termination due to serious breaches.
Record Keeping – Ensuring Legal Compliance
Why is Record Keeping Important?
Accurate records protect the condominium corporation, help with financial accountability, and ensure compliance with Alberta’s Real Estate Act Rules.
A well-drafted contract should specify:
Maintenance of Records
Financial statements and audit reports.
Correspondence with owners and vendors.
Board meeting minutes and decisions.
Accessibility
Who can access records (board members, auditors, RECA regulators)?
How records will be provided (digital copies, physical access)?
Retention Periods
How long records must be retained (typically 7 years for financial records).
Compliance with Real Estate Act Rules, which state:
"Licensees must keep and maintain financial records and accounts in accordance with generally accepted accounting principles."
Example:
A record-keeping clause should state:
"The manager shall maintain detailed financial records for a minimum of 7 years, in compliance with Real Estate Act Rules. These records shall be available to the board upon request within 5 business days."
Practical Application – Implementing Best Practices
To ensure that service agreements remain clear, enforceable, and compliant, condominium managers should:
1. Develop a Standardized Service Agreement Template
Include all mandatory elements.
Ensure contracts follow Alberta’s legislative requirements.
2. Regularly Review and Update Agreements
Update contracts to reflect new regulations.
Conduct annual audits of management agreements.
3. Engage Legal Counsel
Have contracts reviewed by lawyers specializing in condominium law.
Ensure that dispute resolution clauses are legally enforceable.
Example:
Before signing a new management contract, the board should consult a condominium lawyer to ensure:
The termination rights are fair.
The scope of work is clearly defined.
Financial terms are transparent and legally binding.
