Issues of Money

Also click here for Horror Stories About Special Assessments. Other relevant sections are the letters in Condo Fraud, Kickbacks and Conflict of Interest and, in the main part of this website, Misuse of Funds, Kickbacks and Fraud.

Basically, problems of monies being ill spent stem from the qualifications and ethics of boards and managements as well as from issues of conflicts of interest. Qualified boards generally communicate well with their owners, are transparent, and accountable. As a result, condo funds are properly spent and the issues described in the letters below occur less often. 

Letter: We used to have a board that was accountable, kept us informed and that made sure that we got good services for our money. That board treated our staff with respect but made sure that they worked. Now we have a board that sees itself in a partnership with the management and the staff rather than with us owners. They stand by the manager rather than by us and they don't seem to dare to displease her and tell her to make the staff work. It is obvious to all of us owners that our staff is not working as they should and no one in charge is telling them anything. So what are they doing instead of making them work? They hire more staff! And of course the manager is happy because this makes her life easier and besides the companies that supply us with staff are friends and the board seems to think that this is normal. So what is happening is that our fees are going up to support a lazy staff that is increasing in size rather than in quality.

— January 2012, Ottawa

Answer: This situation seems to be very common, if one can judge by the number of letters received on this topic. It is too often easier for some boards to simply agree with the manager on just about everything. Yet, it is a board's duty to supervise. When the staff realizes that no one supervises them, unless they truly love their job, they are going to work as little as possible. Once this pattern sets in, it is difficult to rectify. Condos are big business: Can you imagine a private business that would hire people not to work? As another reader said, "this happens only in condos." You also refer to a conflict of interest that is also too common.

Letter: Since our former Board President left we have seen a lot of changes in the appearance of our building and how management works and in the lack of communication from the Board. What worries me the most is that some contractors suddenly appeared here nearly on a daily basis as soon as the former President left and some of the work that used to be done by our own superintendent and housekeeper are now being done by contractors. We’re getting less value from our staff, and money is probably pouring out and more of this is going to happen because the manager seems to like to spend money and the Board has communicated that the building is aging, a good excuse for having contractors here so often. Another part of the problem is that the former President used to elicit our help in the maintenance of our building and used to explain what we should do to prevent various deteriorations from occurring, from the garage floors to plumbing. We just finished repaving the parking areas and this was expensive and some of this is preventable, but no one is informing residents about this. I don’t think that we are told the truth and the not-so-bright manager is misleading the dependent and inexperienced Board. I tried talking to one Board member but that person said that there is nothing that [he/she] can do because the [titles deleted] make all the decisions. What can owners do because I am not the only one complaining?  

— October 2009, Toronto

Answer: Frankly, this is happening because there is no accountability in the Condo Act. There is no one you can complain to who is in charge and will come in to rectify the situation. As an owner, you can requisition a meeting and have this situation brought out in the open—but this board and manager may come up with a rafter of intimidating “facts” that will be impossible to disprove. As well, please make sure that you are well documented before you proceed with a requisitioned meeting. Your condo is failing in utilizing its staff to their full ability. Staff should learn some basic, useful skills that keep contractors away longer. What you describe is a very expensive proposition, especially in the long term. Expect fees to go up. Added January 2012: Please refer to the new section on Misuse of Funds, Kickbacks and Fraud. As well, you may want to read letters in Condo Fraud, Kickbacks and  Conflict of Interest.

Letter: Our fees are going up by about 3% each year and I am not complaining but there is a lot of wasted money and it is our money after all. For instance we have a full-time manager, full-time superintendent and full-time cleaner for a total of $190,000 or 19% of our budget. I know that we don’t need a full-time manager because all the other buildings our size share their manager with at least another building somewhere else. Plus the super and the cleaner spend half of their time socializing and smoking and lounging about. Either they should work for their money or our board should use them only half time. We could save $75,000. The manager is hare-brained and the board totally rely on her. What to do? 

— August 2009, Toronto

Answer: Have you written to the board about this? Second, check out the possibility of having a requisitioned meeting to bring this issue out in the open. (Click here for Requisitioned Meetings) This is also important because, in July 2010, the HST (Harmonized Sales Tax) will kick in Ontario and will be added to the fees charged by companies that contract out supers, janitors and managers, as well as labor costs for plumbing, for instance. This will mean a good-size raise in fees for such services.

Owner's Reply: I wrote my board all right, and they copied the manager so that now none of these people are even polite toward us. They’re so totally lacking in any sense of ethics and they are so ignorant. They don’t have to do anything because they’re not accountable to anyone. Someone has tried before me to requisition a meeting and they made it so difficult that it didn’t take place. Please anyone DO something for us, we’re more poorly protected than car buyers.

Letter: The problem with condominiums is that owners don’t want to learn anything and as a result end up exploited by all kinds of charlatans who call themselves [names deleted] and as was our case, one day serious repairs are carried out at the cost of $500,000 and a new board is elected and finds out that these repairs weren’t necessary. In the meantime our fees go up by 25% and suddenly everyone is up in arms. But it’s too late and the deed is done. Owners have to understand that things can go very badly in a condo very quickly if no one is accountable because owners are not vigilant.

— August 2009, British Columbia