Field Notes From a Condo Corp Treasurer - Winter 2025

Article from Volume 12, Issue Number 1, 2025

Field Notes From a Condo Corp Treasurer - Winter 2025

By Alan Forbes | Other articles by Alan Forbes | Feature

A condominium corporation’s Board of Directors has a fiduciary responsibility to the corporation. Here is an excerpt from the CCI Manitoba introductory directors’ course:

"Acting in the best interest of the condominium corporation involves a fiduciary duty which is often misunderstood. A fiduciary is a person who has agreed, or has undertaken, to act for, or on behalf of, or in the interest of, another person in a manner that will affect the interest of that other person in a legal or practical sense. In common law, directors of business corporations have long been held to owe a fiduciary duty to the corporation itself. Similar considerations apply to condominium corporations. A director does not owe a fiduciary duty to individual unit owners but does owe this duty to the corporation."

I believe that means that as a director, in general, and as the board treasurer, in particular, my responsibility is to ensure there are sufficient funds in the operating account and the reserve fund to ensure the common elements are well maintained for the coming year and well into the future. This is contrary to the desires of unit owners who want to “keep fees low.” Keeping fees artificially low results in a poorly maintained property and lower market valuations.

While the provincial condo act doesn’t use the word “fiduciary,” section 94 is analogous. It says:

Duty of board

94(1) A board is responsible for performing the duties and exercising the powers of the condominium corporation in accordance with the corporation's mandate, duties and powers under this Act and the corporation's declaration and by-laws.

Duty of directors and officers

94(2) In performing the duties of the condominium corporation and exercising its powers, each director and officer of the board must

(a) act honestly and in good faith with a view to the best interests of the corporation; and

(b) exercise the care, diligence and skill that a reasonable and prudent person should exercise in comparable circumstances.

The Supreme Court of Canada in a 2008 ruling highlighted the fiduciary responsibility for condominium directors. Here is a link to the ruling. Considering their fiduciary responsibility, all directors should be spending their corporation’s money as if it were their own — actually, it is their own — and look to maximize the value received for the expense incurred.

Expenses, revenues and deficits

All levels of government — federal, provincial and municipal — seem to be struggling to maintain service levels and infrastructure while balancing their budgets. In theory, it is very easy to do so: Figure out what level of service you need to provide, then just make sure your revenue equals your expenses. That said, unexpected events, such as pandemics, wars, extreme weather and the like, can derail the best-laid plans.

Condominium corporation boards face similar problems and are the governments for their properties. If unexpected events happen, they have to cover the costs. Each year, unit owners expect the same or better service levels. Infrastructure must be maintained, with the reserve fund study as a guide. All of these expectations depend on having sufficient financial reserves, which comes from the unit owners in the form of their monthly condo fees, which are equivalent to property tax revenue for a government.

We have to make effective use of our financial resources by maximizing the value for the expenses we incur. Some questions we should always ask ourselves include:

Is the service or maintenance required or is it a desire?
Can a different supplier provide better performance for the same price or the same performance for a lower price?
Does spending the money make for a healthier, a safer or better community?
Will not spending the money result in depreciated property values?

What follows are some of the things that I have done at my own condominium corporation to fulfil my fiduciary responsibilities. For context, my condo corporation consists of three townhouse buildings of seven units each, with 34 outdoor parking spots with receptacles for block heaters and eight garage parking spots.

Condo fees

Don’t be afraid to raise condo fees to keep the property maintained and to get the reserve fund to a good level. The City of Winnipeg seems to be struggling in this regard, with tax increases of 3.5 per cent in prior years and 5.95 per cent this year. Given that we’ve just gone through a period of high inflation and the city has a growing infrastructure deficit and has depleted its rainy-day fund and continues to draw a dividend from the sewer and water account, higher tax increases are probably warranted in conjunction with proper scrutiny of the expenses and value received. (And, by the way, we clear our roadway after an accumulation of five centimetres of snow.)

For comparison purposes, here are the increases I have passed on to my owners since I became treasurer in 2017 in comparison with the local consumer price index and the local construction price index.

	2018	2019	2020	2021	2022	2023	2024	2025
Total condo fees	4.4%	4.9%	0%	0%	5.0%	6.4%	10.0%	6.0%
Operations	0.9%	3.0%	-11%	-1.6%	1.7%	3.8%	6.3%	4.3%
Reserve Fund Contribution	33.6%	16.5%	61.3%	5.0%	14.4%	12.9%	18.9%	9.6%
Winnipeg Construction Price Index	14.2%	2.7%	1.2%	7.3%	17.7%	5.7%	3.9% Q2	TBD
Winnipeg Consumer Price Index	2.5%	2.2%	0.5%	3.3	7.9%	3.5%	2.0% Oct	TBD

Note the dramatic increase in the reserve fund contributions even while we froze the condo fees in 2020 and 2021. This was achieved by lots of attention to the expenses and by asking the questions mentioned in the prior section. Some of the expense savings were found in the utility accounts, as explained in the next section.

Utility expense savings

There are a lot of options to save money on utilities. Paying attention to the monthly and quarterly bills is important, as is reading the fine print and asking questions. One of the things I did was ask my property manager to add my name as an authorized contact for the various accounts so that I could contact the utilities directly and ask questions.

Electricity expense

You wouldn’t expect savings here because the billing rates are fixed and consumption depends on the weather. While our common expenses don’t include common-area heating costs, they do include block heater costs in the winter. (Note that our outdoor plugs have IPLC M210-TN smart plugs, which saves a lot of money.)

After a year or two on the job I noticed the monthly hydro bill for one of our three buildings was always lower than for the other two. Digging deeper, I found that power consumption for the three buildings was comparable. I finally noticed that while the third building was classified as residential, the other two buildings were classified as general purpose small, which has a higher monthly fixed charge. We contacted Manitoba Hydro pointing out the inconsistency and it provided an immediate correction for future billing cycles and refunds of the prior overpayments, which we received in 2021, as you can see in the chart.

Once the corrections were made to the monthly bills, I noticed that the consumption for the third building was usually higher, and significantly higher in winter. In 2023 we checked to make sure our smart block heater plugs were all working correctly, then asked Manitoba Hydro to test the meter, at a cost to us of about $120. Hydro removed the suspect meter and put in a new one, then tested the one it had removed. While Hydro said the meter performed within the required test specification limits, it did not reinstall it. Consumption returned to normal for the third building and the expense decreased, as shown in the chart.

Dumpster rental

Coincidental to pandemic-related inflation, we saw dramatic increases in our dumpster rental costs. We have a six-yard dumpster, which is slightly bigger than recommended by the City of Winnipeg Water & Waste Department. I called a few other service providers for quotes but none offered a lower price. I then called our current provider, expressed my concern about the costs and inquired about the potential savings from using a small dumpster. It recommended keeping the same size but said that if we were to sign a five-year contract, we would get a better rate, which is what we did in March 2024. The current year savings and future savings are evident in the chart.

Telephone and alarm monitoring

We have a fire suppression system (wet sprinkler system) for each building that is monitored by an alarm company over separate cellular phone lines. One of my first initiatives as treasurer was to sort out the alarm monitoring, since there were separate accounts for each building with different rates and billing cycles. All three buildings were standardized on the lower of the three rates and on a quarterly billing cycle. In addition to the lower rate going forward, we were refunded for prior year overpayments, as seen in the chart in 2018.

As to the cellular lines, it seemed the phone company started increasing the rates more frequently during the pandemic, with an overall increase of 57 per cent in the monthly rate from 2017 to 2023. When I called to express my concern, I was offered a rate about half of what we were paying if we would sign a five-year contract. We signed in 2023 and the chart shows the subsequent savings in 2024 and into 2025.

Alan Forbes lives in a condo and is the treasurer for his condo corporation. He also is a director of CCI Manitoba and is its vice-president.

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