September 2017
When condo communities consider conflict of interest concern is usually focused on their directors. A condo director must act in the best interest of the corporation rather than in their own self-interest. Among other things this means directors should not be involved in decisions for their personal gain.
Less discussed but no less relevant is conflict of interest by the condominium manager. Employed by the condo corporation, the condominium manager is in the trusted position of recommending contractors, purchasing products and services, and advising on condo-related purchases. Financially benefiting from doing their job, beyond the salary they are paid, is a conflict of interest. Condominium managers should not be making decisions on whom to employ, or make purchases, on behalf of the condo corporation in return for additional compensation from another source.
While it can be beneficial, and legal, for some businesses to offer incentives to condominium managers, this is not a desirable practice for condo corporations. Such arrangements are often made informally with minimal documentation.
This concern has become more prominent in light of one company offering condominium managers a “referral program”. Condo News Center, a provider of condo management software to the Toronto condo marketplace, offers a “15% commission to be paid by cheque” to condominium managers that direct business to them. Condo News Center did not respond to inquiries from Toronto Condo News.
Compensation by vendors or service providers to condominium managers, or directors, is not a desirable practice for condo corporations and their residents.
