Momentum joins EliReports - Condo Board Review and Feedback #condoliving #buildings #calgaryrealestate

We received excellent support and great feedback for our new condo board governance report. We posted on social media to gather some feedback from existing condo owners and most of our responses were positive! Many owners are eager to order a report to check on their board which is great news for everyone. Granting access to additional ways of assessing condos is long overdue and a much-needed tool in this industry. We welcome all discussion and feedback because that’s the only way we learn how to better serve the condo community so let’s discuss some of the feedback.

Feedback on Community

For starters, we received a few comments regarding the idea of assessing “community” in a condo corporation – we received comments from people who weren’t convinced that a governance report wouldn’t really work or be effective because there are so many things you can’t see in documents. Plus, there are so many things that poor boards try to disguise when drafting board/AGM meeting minutes. The dirty secrets of condo buildings are never revealed in their documents which we all acknowledge but…. analysis has to be based off of what is not there not as well, the missing stuff is also part of the analysis. Let’s be clear, there is a culture of distrust in the condominium world and for very good reasons. We wouldn’t have created a product to try and help owners if there wasn’t a demand and need to better assist condo corporations.   

A board governance assessment or evaluation is not intended to be able to define or describe the experience of living in a certain condo building because everyone has a different experience. There is no way to quantify or qualify experiences. The intention of these reports is not to assess day-to-day activities between neighbors who have had disagreements but to analyze how the board acted or if they acted. We rate the successes or failures, strength or weakness of the board of directors and property management company like other levels of government and corporations.  

The board governance report reviews the criteria and rates the strength of community in the condo corporation. We are not intending to measure the sense of community from a unit owners perspective. That culture changes from unit to unit and floor to floor throughout the entire building. It would be fantastic if we could monitor this feeling of community and help to improve it so let us know if you have any ideas! What we can measure is “community” by evaluating bylaws, any rules or policies, community events, the minutes as well as a several other factors. There are general principals and certain behaviours that can be identified by reviewing documents because there are certain traits of democratic institutions and of course certain traits of undemocratic institutions. I’ll repeat the obvious but democratic institutions behave differently than undemocratic institutions so its those factors that can be used to assess condo documents. If a buyer is looking for a community to join then the governance report is the only way to determine if a “community” exists before you invest. We can determine if the board focuses on developing community. What we can’t really determine is the quality of a community, but we can determine if one has been developed. If owners want to experience communal living and creating a sense of community is not a priority for the board then this can seriously negatively impact an owner not only in their everyday life but during stressful emergency situations in the building. If the board is not concerned with creating community, then a building full of strangers can be very lonely and may affect the owner’s ability to enjoy their life. If a sense of community is an important factor for new buyers, then they need to assess the level of community in the complex before they buy so they can take advantage of all the community has to offer.

Assessment of Corporations

We believe its time to introduce this provocative new report to assist in assessing condo corporations. For many, change is difficult, the idea that a board of directors can be and should be assessed and evaluated may seem strange or invasive. Many condo owners don’t bother to evaluate the board and there are many comments asking why anyone needs something like this report.  They don’t understand why would we need one – “the board is  doing just fine” or “why would we need to have another report to tell us how the board is operating because how does or how would this affect my life as a condo owner”? “How does having a weak board affect my life as a condo owner and so what if my board is rated as weak”? How do we respond to a comment like that unless you’ve lived in a condo building with a weak board or an autocratic board? It’s not just the physical deterioration of the property you see over time with weak boards it’s the lack of community and negative attitude of the owners in the building that can affect the well being of condo owners. It’s exhausting sending email after email only to receive no response and no support, its exhausting for owners who have tried to fight poor boards and are worn out. Its only after they buy that new owners learn why they don’t get their windows cleaned or someone keeps parking in their stall, and the board fails to act or even respond because they aren’t accountable to its owners. Many condo boards don’t understand that they need to be pro-active as a board member and the board is not a special club they are in fact supposed to represent owners. Its hard to explain the “we” attitude until you’ve lived it. A board that separates itself from its owners is weak with a clearly poor property manager as well. It’s difficult to explain to new buyers how important a good property management company is for condo owners. Good property mangers literally save buildings and owners.

Feedback - Measuring Condo Boards of Directors  

Some additional feedback we received were questions regarding metrics. How do you measure corporate performance questioning it like it was a new concept. Which of course it is not…. private and public companies are rated by both public and private organizations all the time because its part of democracy. It starts with countries, they are rated on their performance and assessed on all types of criteria and one of those criteria is based on how well their democratic systems are operating. Public corporations are required to be assessed annually, and their boards progress and performance are rated in part by the corporations share price and Standard and Poor’s (S&P) ratings and analysis. Other corporations are rated based on their balance sheets and growth potential as well as internal performance reviews for employees and executives but somehow condo boards of directors have escaped any accountability for their performance.

There are too many condo corporations struggling through the effects of decades of weak boards. The problems will continue until a board is evaluated and they learn and understand their responsibilities. Too many condo corporations are underfunding their reserve fund and operating accounts, its this type of mismanagement that will become even more prominent in the next several years when buildings need to undertake major repairs and there are not enough funds to cover the repairs. The national and global economic forecasts expect costs to continue to rise and inflation is not something condo corporations have included in their plans. Their reserve funds have not been sufficiently funded to provide for the new high cost of materials and labour since COVID. The Government of Alberta requires condo corporations to complete a reserve fund study every five years. However, five years may be too long to try and keep up with the faster rate of inflation. It may be more realistic for boards to opt to engage reserve fund studies every three years so they can adjust their budgets to keep up with inflation. Boards that can identify and recognise these types of trends and seek assistance to protect themselves from natural or economic disasters are strong boards that are working to protect their corporations. These boards can be identified by reviewing the documents. Many condo boards need an evaluation from a third party to ensure they are serving their owners and acting in the best interests of the corporation. It’s important now more than ever to have a condo board evaluation process to assist boards with reserve study planning and provide tools to assist them in implementing those plans to maintain the corporation and its market values.

The only way boards can start serving and protecting their corporations is to ensure they adopt all the Condo Act requirements. The sad reality is most boards have failed to adopt even a few of the requirements, and they are left themselves exposed because of their failure to act.  Its crucial for buyers to know if their boards have or have not adopted all the requirements. They deserve to be provided with all the information about the potential condo corporation and their investment. Owners should know that their board is not following the Condo Act and owners should be holding their boards accountable when they are not.

Momentum invites property managers or boards to engage us to audit their boards and corporations so we can all be assured that the boards are doing their best to serve their owners. We know a lot of property managers that are working to assist owners and boards, and they need to be recognized for their efforts. What better way to recognize dedicated boards and property managers than to open up the corporation and order a Governance report or dig deeper and undergo a more detailed corporation assessment. Condo corporations should be open and willing like every other corporation to prove to their owners that they are on the right track. Successful condo boards understand that they need to continue to evolve and improve just like any other corporation. Being a board member and running a corporation is an ongoing learning process. Condo corporations should be working to ensure that owners and buyers can be confident in their board and condo corporation and know that are buying the best investment for them!

To order a Governance Report go to www.elireports.com