Why do owners of registered condo buildings need to have building management services? For both the condo building and building management services for the rental operation of the same building? This is a situation that is actually quite common. Anyone who is either an investor or resident in the building that is a registered condo should know the difference. We will try to explain the difference between the two. In addition hy you need separate building management services for each one.
Basically there is a business entity that is responsible for all of the common elements of the building. This is the condo or the strata as it is referred to in some locations. All owners participate and can vote on various issues that the board of directors will bring to them at a general meeting. In addition all owners are eligible to be on the board of directors as well.
They are responsible for setting a budget, establishing and maintaining an adequate reserve fund. In addition providing the owners with at minimum an annual report of all financial and operational status. The board will usually hire a building management service or property manager to look after all of these things on their behalf.
It is up to the representatives of the building management service to fulfill and carry though all of the boards requirements. Provided that they are legal of course. They must comply with the bylaws of the property or condominium. This is a pretty standard example of building management service.
At some buildings a large number of units may be rented out to tenants. If one owner happens to own these rental units, they may hire a building management service. This company will manage the rental of their units, collect the rent and provide upkeep to the interior of the units. They have no responsibility of looking after the exterior of the building.
They work for each individual owner. In addition they are responsible for managing the tenant or tenants that rent units in the building they are in. Often there are multiple owners who own rental units in the building along with people who own and live in the building. The rental unit owners sometimes will band together to hire one management company. This company will manage all of the rental units in an attempt to reduce their costs overall.
These can be two separate building management services or sometimes they can be the same company. Usually there are different people within the building management company responsible for the condo side and the rental side of the business. There is no business or legal relationship between the condo and any tenants that are renting. Or between the various rental building management services. They are separate entities and all must abide by the condo bylaws etc. Separate financial reports are needed for both entities to ensure that there is no mixing of accounts and payments.
Many people find this confusing especially at meetings of the unit owners, however it is important to keep these things separate and distinct. For example if a tenant is causing problems in the building and other owners are complaining, the complaints must be given to the condo building management who in turn will contact the owner of that unit. It is up to the owner of that unit to deal with his or her tenant or the building management company that is managing his or her rental units. The rental building management service will need to then follow up with the tenant to ensure that no more complaints are received.
Hope this helps to explain one aspect of building management service. For more information about building management and property management services, click here.