Relationship between Property Managers, Strata Councils and Owners in Vancouver Condos
As an East Van agent I go through strata documents for a number of condo buildings in the city, as part of the due diligence for Buyers. It’s interesting to be able to compare how a property is run, what problems they’re encountering and how involved the owners are when you’re considering the management style of the building.
A common question I get from Buyers is the purpose of the Property Management Company (aka Strata Management Company), and how they interact with the Strata Council and Strata Corporation (the fancy name for the owners in the building). I always encourage my clients to take a seat on the Strata Council since it gives you a chance to have a bigger voice in the management of the buildings, proposition of new Bylaws, and first hand knowledge of upcoming building maintenance. However, it can be time consuming, and lets face it, boring.
For those of you wondering what the relationship is between the Property Management Company and the Owners, here’s a quick introduction to the role and responsibilities of the Property Management Company.
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The strata council, acting on behalf of the strata corporation (aka Owners), may choose to have a Property Management Company carry out many of the duties of the strata corporation. Only a few of the duties, relating to the enforcement of bylaws, cannot be delegated. Alternatively, the strata council may determine that only a limited number of services, such as collecting strata fees, paying bills and preparing financial reports, should be provided by the Property Management Company. The management contract should set out the services that the Property Management Company is required to perform. A portion of the Owners monthly strata fees goes towards the Management of a Building, so self managed buildings avoid this cost, but take on more responsibility.
Even though a strata council may delegate duties to a Property Management Company, the strata council continues to be responsible and accountable to the strata lot owners for ensuring that the duties under the Strata Property Act are performed. When duties have been delegated to the Property Management Company, it must perform those duties honestly and with reasonable care and skill, but the strata council must ensure that the delegated duties are being performed.
An agency relationship exists between the strata corporation, as the principal, and the Property Management Company, as the agent. The essence of the agency relationship is that the strata management company has the authority to represent the strata corporation in dealings with others and to enter into contracts on the strata corporation’s behalf (i.e. with contractors or maintenance companies).
Property Management Companies and their strata managers are legally obligated to protect and promote the interests of their strata corporation clients. Specifically, they have the following common law and statutory duties:
- undivided loyalty to the strata corporation;
- to obey all lawful instructions of the strata corporation;
- to keep the confidences of the strata corporation;
- to exercise reasonable care and skill in performing all assigned duties; and
- to account for all of the strata corporation’s money and property which is held or received on behalf of the strata corporation by the strata management company or its related strata managers.
As an agent of the strata corporation, the Property Management Company and its strata managers are obligated to act on the instructions of the strata corporation which are given by the strata council.
It is up to the strata council to give clear direction to the strata manager or Property Management Company on an on-going basis, whether it be at a regularly scheduled strata council meeting or between meetings. In order to avoid possible confusion, it is recommended that these instructions be given in writing to the strata manager through a designated strata council member and be properly recorded in the minutes of the next strata council meeting.