You Get What You Pay For

November 2021

The Condominium Authority of Ontario (CAO) and the Condo Act have frequently been presented as necessary for consumer protection.  The cost of this consumer protection is typically omitted.

The cost of hiring condominium managers is increasing.  Much of this can be attributed to demands placed on them by the Condo Act and Condominium Authority of Ontario.  The job requires a general understanding of the Condo Act and more than a dozen other pieces of legislation.  There is a code of ethics they must adhere to.  While managers have always assisted and worked with directors, they now need to advise and educate new directors participating in mandatory training.  All of this requires more time, experience and training.

In the name of consumer protection much has changed with condominium managers bearing the greatest responsibility.  Everyone seems to be reducing their risk by placing more risk on the condominium manager.

There is a cost to condominium corporations, and owners, for these changes.

Licensing costs have increased along with the necessary skillset.  Condominium managers and management companies must absorb these higher fees plus higher insurance premiums, continuing education fees, and firm license fees.  Demands and responsibilities have grown.  Condominium managers are expected to make immediate decisions requiring a great deal of knowledge, insight and tact.  They are expected to be capable of representing their corporation before the Condominium Authority Tribunal (CAT) for actions that once required legal representation.  At times someone may accuse them of inappropriate, illegal or unethical actions for which they must defend themselves in front of their regulatory tribunal.

Expectations for condominium managers are high even when they are not provided with the requisite support and tools by the condo board they report to.  This requires higher level skills, more extensive training and support.  Condominium managers are requiring greater compensation as demands on them have increased.

It comes as no surprise that experienced managers, and management companies, are commanding greater financial compensation.  Their cost of “doing business” has increased yet condo boards seek zero percent increases or fee reductions.  Clearly this is unsustainable.

Some smaller management firms have left the industry.  Lower-cost service providers are disappearing.  Salaries of good managers are increasing as they demand compensation for increased time commitment, responsibility, liability and risk.

Condominium corporations get what they pay for.  Lower salaried managers have fewer skills and less experience.  They accept a lower salaried position only until a better opportunity becomes available.  Better managers are less willing to put up with a condo board unprepared to follow their advice thus creating more problems that need to be resolved.

The increasing cost of this consumer protection may cause some condominium corporations to consider self-management despite its risks.  For most communities self-management saves a few dollars in the short-term while eliminating any possibility of long-term savings.

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