The majority of condo owners in Calgary are familiar with the idea of a condo manager. As of 2021, anyone employed as a condo manager has to be licensed by the Real Estate Council of Alberta – the same governing body that licenses realtors and mortgage brokers.
A professional management company is hired and paid to run an agreed-upon amount of operations for the condo corporation and their designated manager is the main contact for the condo owners. The management contract is for a fixed term and the owners can change management companies at the end of the term if they are not satisfied.
Often the manager’s duties will include:
- running the board meetings
- running the AGM
- sending out notices to owners
- dealing with bylaw infractions and fines
- obtaining quotes for repairs and upgrades
- collecting condo fees
- paying out expenses
These duties do NOT include:
- making any decisions or participating in a vote
Only registered owners can make condo decisions. In most condos, the condo board, which is made up of volunteer owners, makes most of the day-to-day decisions themselves. But bigger decisions can be put to a vote at the AGM for all owners.
There are a growing number of condos in Calgary that are not engaging the services of a professional condo manager. The reason for this is the huge uptick in the number of small, often four-unit, townhome complexes that were built under the blanket rezoning policy, which allowed four units to be built on many inner-city parcels of land.
When there are only four units, it can become cost prohibitive to hire a manager. So owners can elect to run the complex themselves – this does not mean that they do all of the actual work themselves, like roof repairs or auditing their financials. But it does mean that the owners run all of the day-to-day operations, collect fees and pay out contractors.
These buildings also tend to be much more simple to run than an apartment tower. For example, an apartment complex can have commercial-grade HVAC systems that run the whole building whereas a four-plex generally has an individual furnace in each unit that is each unit owner’s responsibility. Four-plexes don’t have any elevators, lobbies or common hallways. The roofing is often regular asphalt shingles on a simple roof structure instead of a flat roof with a membrane. There typically aren’t any common amenities in a four-plex, like a gym.
There are pros and cons to both ways of running a condo corporation. I find it is generally not advisable to be self-managed when the buildings are much larger than four units as it becomes a bigger job for one of the volunteer owners to collect fees and coordinate decision-making and sometimes the ball gets dropped.
Pros to Self-Managing:
- Reduced cost which means reduced condo fees
- More control over operations by the owners
- Flexibility to push off projects or do them early if the owners agree
- Ability to take on some projects themselves rather than hiring them out – this is common for snow removal and landscaping
- Can choose how often to have meetings
- Can make exceptions on bylaw rules easier than in a large complex (for example, allowing Airbnb rentals or allowing larger pets)
Cons to Self-Managing:
- Requirement for owners to put some effort in
- Can be a lack of knowledge on how to properly care for a building
- Can be lack of involvement in the case of having absentee owners (i.e. the units are rented out rather than owner-occupied)
- Often less documentation which can be a barrier when re-selling a unit (owners often make decisions more casually over email or text rather than having meetings with minutes taken)
- Common to see less money saved in the reserve
- Can cause conflict between owners (who are your neighbours!) if there are disagreements on decisions
Every purchase has its nuances, and every buyer has their own priorities and risk tolerance. Whether or not a self-managed building is right for you will depend on your specific situation and what you’re comfortable with.
We always advise including a condo document review condition in your offer. This gives you an opportunity to review the corporation’s documents and better understand how the building is being run, even if the information is limited in a self-managed complex. Sometimes we will also arrange a call with the president of the board or have additional questions answered by email when there are gaps in the documentation.
Buyers are faced with decisions all the time without having 100% of the information, or the ability to predict the future. That’s why we believe it’s important to educate yourself as much and as early as possible to understand the potential risks and make the decision that makes the most sense for you.
So, if you’re curious whether a self-managed building is right for you, give us a call!
