CONDO ARCHIVES

Commissions and Kickbacks

November 2017

While rumours will always exist about directors, condominium managers or property management companies receiving commissions or kickbacks for directing business to specific vendors, there is no information to suggest this is a generally accepted practice.

Kickbacks are an undisclosed payment of money by a company in return for business they receive from a direct referral.  Commissions are a disclosed payment of money by a company in return for business they receive from an indirect referral.

 

There is no place for kickbacks or commissions in condo corporations.  Such compensation distorts motivation so that condo corporation vendors or service providers may be recommended based on personal financial compensation rather than what is best for the condo corporation.

Contracts with condominium managers or management  companies should state that no additional compensation, either declared or undeclared referral commissions or payments, are allowed.  This gives the condo corporation and its directors confidence that advice and recommendations they receive from these sources is not based on personal financial betterment.