Rating Condominium Corporations

September 2023

Until recently, there has not been a way to rate the financial stability of condominium corporations.

Scoring systems are common for determining an individual’s credit rating.  They are utilized prior to providing an individual with a loan, mortgage or other form of debt including a credit card.  Rating systems can inform on how easy it is to get around using transit.  A Walk Score measures how easy it is to travel a neighbourhood by foot to reach services, necessities and entertainment.  A Bike Score measures the ease of travel on two wheels.

Those purchasing or residing in a condominium have need of a comparable scoring system to understand how well a condominium corporation is managing their financial affairs.

Financial, Physical and Operational Health, also known as FiPHO, helps assess condominium corporations, co-ops and homeowners associations.  This scoring system delivers a rating from 1 to 100 that provides insight into community living organizations.  A higher score denotes a stronger organization.

FiPHO was created after the collapse of the Champlain Towers South condo in Surfside, Florida in 2021.  This disaster highlighted the potential danger of mismanaging funds and delaying maintenance in high-rise residential buildings.  It has been developed by Association Reserves, an organization that has provided more than 70,000 reserve studies.  They have created a database called Association Insights and Marketplace (AIM) that has identified more than 400,000 associations.

Boards of community living organizations can upload their financial, physical and operational details to generate a FiPHO score.  A financial health score is based on a review of documents to assess whether the organization’s finances are sound.  A physical health score, which reflects the quality of community maintenance, and an operational health score, which focuses on how well the organization is functioning, can be generated after additional records are provided.

The board is required to complete its profile on the AIM website (free of charge) to create a FiPHO score offering a degree of transparency with owners and potential buyers.  Buyers pay $49.99 (US) for an in-depth report.  The cost of the report is revenue for the organization.

FiPHO is currently available for community living organizations in the United States.