When it comes to considering a new condo, it’s nice to have an idea of what the paperwork will look like ahead of time. Take management agreements, for example. A management agreement is a document you'll be asked to sign upon purchase that states you agree to follow the rules outlined by the management company. It will also state you agree to pay any condo fees regarding upkeep of the property.
Who is Managing the Property?
This is an important question to ask before signing off on your agreement. Having good condo management can save you money on condo fees and make life as a condo owner much more enjoyable. Ask how long the developer has been using the management company in question and for their feedback. If the property is overseen by a condo board, you'll also want to take the time to get to know the members so you can get a sense of how the development is run.
Condo Board Versus a Management Company
Now that you've found out who will be managing your new condo community, here are a few differences between a condo board and a management company.
A condo board represents the owners' best interests and will vote on decisions regarding the building. A condo board is responsible for the upkeep of the grounds, keeping common areas pristine and any other maintenance. They are also responsible for hiring contractors, dealing with the condo’s finances, and enforcing the Condo Act. The interesting part about a condo board is the people involved are elected by you, the condo owner.
A management company has the same responsibilities as a condo board but are usually hired by the developer and generally just for the first year. A professional management company can be the choice option because they have experience managing multiple condo buildings and keeping community guidelines relevant. It's important to note that a management company doesn’t negate the idea of a condo board. Instead, they act as an advisor for the board and take responsibility for any changes needing to be implemented. In this sense, the company cannot create policies, just enforce them.
What Does Your Management Agreement Cover?
Your management agreement will cover the fine details surrounding either just the condo board or the condo board and management company. As mentioned above, these details will include your condo fees, your responsibilities as a tenant, and certain standards you may be expected to follow. An example of these standards could be parking in your allotted space or cleaning up after your pets. It also means you agree to let the management company take care of maintenance-related concerns and details. This could be anything from snow removal and window cleaning to waste disposal and lawn maintenance.
Can You End a Management Agreement?
Short answer? Yes. However, there are some details you'll need to look at first. If there is a breach of the terms and services you were initially offered, you can end the agreement. Usually, you'll have a specific time period that needs to pass before you can terminate your agreement. While the amount of time may vary from developer to developer, the condo board can then vote on ending the agreement or not. This would typically only happen if the management company wasn’t fulfilling their obligations.
Now that you know more about management agreements, you'll be able to sign off on your new condo confidently and with peace of mind. Even then, a good developer will not only go through this information with you in detail but will be happy to answer any and all questions you may have.
Learn more about what to expect when purchasing a new condo by checking out our Condo Document Checklist.