Article from Volume 12, Issue Number 3, 2025
Suggestions to Improve the MB Condo Act - Summer 2025
By Alan Forbes | Other articles by Alan Forbes | Regular Column
Annual financial statements and auditors’ reports
Most condominium unit owners and most condominium directors do not have an accounting background, making it difficult to understand and ask meaningful questions about the condo corporation’s auditor’s report and the annual financial statements. Similarly, many condominium treasurers do not have an accounting background, this author included.
One of the problems is that a condo corporation’s accounting firm may change and the new one might organize information differently, making it difficult to compare information from consecutive years or to perform trend analysis. For example, over the past decade my corporation has dealt with three different account firms.
- One firm provided a balance sheet, while the subsequent two firms provided statements of financial position.
- One firm provided a statement of revenues and expenses, while the subsequent two provided statements of operations.
- One firm provided a statement of accumulated operating surplus, while the subsequent two provided a statement of changes in net assets.
- All firms provided statements of cash flows.
- Sometimes the statement of operations is combined with the statement of changes in net assets, and sometimes not.
- The third firm separated out the reserve fund from the operations account per the restricted fund method, while the second firm did it some of the time and the first firm never did it.
- Only the third firm provided a declaration meeting the requirements of regulation 34(2) indicating that they were qualified.
Another problem is that the regulation 34(2) references an outdated document, the CICA Handbook — Assurance, which has been replaced by the CPA Handbook — Assurance. Regardless, neither is available to a layperson. Additionally, this section is the only place where a review engagement is mentioned. As highlighted in previous newsletters, it would be useful to explicitly state in the act or the regulation whether a review engagement is allowed or not. For a pan-Canadian perspective on this point, have a look at our summer 2024 article.
Condominium act and regulation requirements
The pertinent sections are 150 and 159 of the Act and section 34 of the regulation.
Contents of financial statements
150(1) A condominium corporation must prepare financial statements that include
(a) a balance sheet;
(b) a statement of general operations;
(c) a statement of reserve fund operations;
(d) the prescribed information relating to the reserve fund study and any update to it; and
(e) any additional statements and information required by the regulations or the corporation's bylaws.
159 An auditor must report to the unit owners on the financial statements prepared by the condominium corporation. The report must meet the prescribed requirements.
34(1) For the purpose of subsection 73(3) and section 159 of the Act, the auditor's report must be prepared in accordance with the standards set out in the CICA Handbook — Assurance, as amended from time to time, for an audit or review engagement, as the case may be. ("CICA" refers to the Canadian Institute of Chartered Accountants.)
34(2) The auditor's report required by subsection 73(3) or section 159 of the Act must include a written declaration by the auditor that he or she meets the requirements of subsection 156(2) and section 158 of the Act and section 33 of this regulation.
Proposed solutions
For the financial statements, include wording that the statements must conform to the CPA Guide to Financial Statements of Not-for-Profit Organizations (available on our website) and use the restricted fund method of accounting. As well, update the reference to use the CPA Handbook — Assurance, explicitly state whether review engagements are allowed, and provide an excerpt from the CPA Handbook — Assurance or specific clauses so that a non-accountant can find the pertinent information and understand what the auditor needs to provide.
Performance audits
An interesting article in the context of the Ontario condo marketplace was published in May 2025 by CondoBusiness, part of the REMI network. The article by Ryan Haley, headlined Performance audits: what new condo board members need to know, provides guidance for requirements in the Ontario condo act relating to the period leading up to the turnover meeting, including the warranty period. Specifically, section 44 of the Ontario condo act describes the requirements for a performance audit. While the Manitoba condo act lacks anything similar, the performance audit seems to be a useful means for consumer protection for owners of newly constructed condos during their tenure when they probably know very little about condos in general and next to nothing about condo governance and maintenance.
A performance audit is a comprehensive inspection of the condo corporation’s common elements, including but not limited to the building envelope and foundation, garages, grounds, elevators and heating and ventilation systems, with the intent of identifying deficiencies and getting them fixed before the expiration of the developer’s warranty and/or the provincial new home warranty.
Both the CondoBusiness article and the Ontario condo act section are recommended reading for all condo directors. The article also provides the following advice to condo directors:
1. Review the declaration and description to have a clear understanding of unit and common element boundaries. Include unit questionnaires with the performance audit.
2. Keep track of warranty timelines. Know when a warranty claim can be submitted.
3. It’s important to keep the lines of communication open with your builder. Work with the builder to resolve the claim items. Update the performance audit tracking summary every 90 days.
4. Keep unit owners informed about concerns and repairs related to the condo’s common elements.
5. Maintain the condo building. Keep in mind that improper maintenance can affect warranty coverage on the common elements.
Since the Manitoba Condo Act falls within the realm of consumer protection legislations, performance audits would be a useful additional protection for owners of newly constructed units during the time that they will “face a lot of new processes and terminology that they’re not familiar with.”
We encourage you to submit suggestions for improving the Manitoba Condominium Act to us through our website. For reference, the province has a useful website with a guide to the act and links to the act itself, and the associated regulations and various related forms. The province’s website, The Condominium Act & Information, has links to the Act, the regulations and numerous other online resources along with contact information for your use. We have submitted a few email inquiries in the past and had good results.
Telephone: 204-945-3744
Toll Free: 1-866-626-4862
TTY: 204-945-4796
Email: MBcondo@gov.mb.ca
If you are curious about earlier improvement suggestions, you can easily find them by going to our newsletter webpage and searching using the text string “Improve the MB condominium Act.”
Alan Forbes owns and lives in a condominium and is a director of his condominium corporation. He also is a director of CCI Manitoba and is its vice-president.
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