When a condo director is first elected many have a perception of their role quite different than what it should be. Many have no experience running a business or managing a multi-million dollar budget. There is a misconception that, because condo directors are volunteers, this does not matter.
It does matter. Condo directors failing in their role can cost owners a lot of money. The corporation employs a condominium manager or management company, accountant, lawyer and other professionals. All have their particular expertise but operate in isolation. Condo directors can access this paid expertise but only they can make decisions on behalf of the corporation and community.
Most directors have a particular role on the condo board in accordance with the corporation’s governing documents. Among these roles that of the treasurer is paramount. While the president has the highest profile among condo directors, the treasurer has the greatest responsibility and time commitment. The individual in this role is responsible for protecting assets of the corporation, ensuring bills are paid and condo fees collected. There are monthly financial reports to review, and annual financial statements and reserve fund reports that need to be prepared. Being effective in this role requires experience and a significant time commitment.
Most (non-condo) corporations will hire a qualified accountant to handle these tasks and make various representations of the accuracy of the numbers. In a condo corporation this task falls to the treasurer. In most communities, the volunteer and uncompensated treasurer has this responsibility but is unable to put in the required time. They may lack financial experience, be unable to create or manage a budget, or have no idea how to prepare a management report. They rely on hired expertise. There is a strong likelihood the treasurer, or even any condo director, has never sat down with the accountant, met their lawyer or been active in preparing their reserve fund.
This is no way to run a multi-million dollar operation.
At the very least, the treasurer should have regular or periodic meetings with the corporation’s accountant, condominium manager, reserve fund preparer and engineer. It is only through proper communication that the treasurer can be confident of information they receive and be able to properly advise the board.
Successful condominium corporations are consistently in a stable and secure financial position. Necessary maintenance, renovations, equipment replacement and upgrades, common area upgrades and enhancements, and unexpected expenses are handled without concern over financing. If this sounds like your condo corporation, be aware of the role your treasurer plays and work to keep them in that role for as long as they are willing.