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The WHYS of condominium owner insurance

In Episode 2 of our insurance mini-series with Nuera Insurance Inc.,  Lauretta Enders, BA, CPM of Emerald Management & Realty Ltd. speaks with our valued partner to discuss the “whys” and “what fors” when it comes condominium unit owner insurance.

Emerald Management & Realty Ltd. is a licensed condominium management brokerage and trusted to respond with experience and responsive systems. Emerald Management & Realty Ltd. offers a wide range of condominium property management services and rental property management services.  Our primary goal is to offer peace of mind and help condominium boards realize the long-term profitability, a solid governance approach and assist to minimize risk.  Contact us today to find out more about how our team at Emerald Management & Realty Ltd. can help by calling 403-237-8600. 


Frequently Asked Questions about Condominium Manager Licensing

Condominium manager licensing is now in effect in Alberta!

If you are a condo board member or involved in the condominium management industry, you are now aware that effective December 1, 2021, any person, or company providing condominium management services, must be licensed with the Real Estate Council of Alberta (RECA).

This is an exciting advancement in the property management landscape that took shape after consultation on condominium manager licensing that started back in 2015.  The decision to license and develop educational requirements is in recognition of the specialized work condominium managers undertake.   The desired outcome is ultimately for the benefit of and to protect condo owners, consumers, and professional condominium management by ensuring consistent professional standards across the condominium management industry.

Frequently asked questions about condominium manager and condominium brokerage licensing:

Who is RECA and why is this important for condominium corporations?

The Real Estate Council of Alberta or RECA is the independent governing authority that sets, regulates, and enforces standards for residential real estate, commercial real estate, property management, condominium management, and mortgage brokerage licensees under Alberta’s Real Estate Act.1

Essentially its mandate is to: 

  • protect consumers
  • provide services to facilitate the business of licensees
  • protect against, investigate, detect, and suppress fraud as it relates to the business of licensees

“Consumer protection is at the heart of RECA’s mandate and is the main purpose behind this licensing initiative,” explains Don Newell, Chair of RECA’s Residential Property Manager Industry Council. “Though many condominium management companies have operated professionally and successfully in Alberta for years, their clients now have the added protection of a regulated environment.”2

This is important for condominium corporations because it provides consumer protection with the added assurance that licensed professionals enjoy lifelong learning and education, in addition to the experience needed to provide quality service.  Under RECA’s mandate, the goal and desired outcome is that licensed condominium managers and brokerages will be less likely to cause harm to consumers. 

The Residential Property Manager Industry Council sets the rules subject to approval of the Minister of Service Alberta under the governance structure for RECA, for condominium management.  Enforcement of the Real Estate Act, the regulations and rules for the condominium industry will be completed by RECA complaints or issues are brought to its attention.

What is “condominium management”?

The Real Estate Act (reference Section 1(1)(e2) defines condominium management services to be “the exercising of a power or the performing of a duty of a condominium corporation on behalf of the condominium corporation including, but not limited to:

  • collecting, holding, or disbursing, or attempting to collect, hold or disburse, contributions levied by the condominium corporation or other amounts levied by or due to the corporation under the Condominium Property Act,
  • enforcing the bylaws or rules of the corporation,
  • negotiating or binding contracts on behalf of the corporation, and
  • supervising employees or contractors hired or engaged by the corporation but does not include any activity excluded by the Condominium Property Act, this Act, or the regulations under either Act.”3

Why does this matter for condo owners, condo boards and condominium corporations?

The professionalization of an industry is integral to the elements of a professional condominium manager and include the following characteristics:

  • Specialized knowledge
  • Competency
  • Honesty & integrity
  • Accountability
  • Self-regulation

These are examples of desired values that benefit condominium communities and for condo boards as it ultimately increases consumer trust in the real estate industry.

Licensed RECA condominium managers (aka Condominium Manager Associate) have meet the education and experience requirements to provide condominium management services. RECA is charged to regulate individuals and condo management companies and ensure that they follow standards of practice and meet operating and reporting requirements.

What about a code of ethics for condominium managers?

RECA has established a Standards of Practice which is like a code of ethics.  The Standards outline responsibilities, prohibitions, and practices for condominium managers.  Record keeping and financial management of condominium corporations as part of the Standards of Practice.

What is the difference between condo management and property management?

Based on the Real Estate Act and its definitions, condominium management is a separate activity and industry from property management.  The distinction has to do with relationships.

For example, condominium managers enter relationships with condominium boards and perform condominium management activities on behalf of their client boards.  In contrast property managers enter relationships with landlords and renters, negotiating leases, holding rental security deposits, and performing leasing related activities for their landlord or renter clients.

Individuals and companies can practice both condo management and property management – just under separate brokerages.  The same company can operate a condominium brokerage while also providing property management services.  Each brokerage will have its own licensed brokerage and can share ownership.

Timelines and Conditions of Licensing

  • Education: RECA has mandated that a license is conditional on the successful completion of industry specific exams and courses.  Courses are currently in production.  It is anticipated that courses will be open shortly. All condominium managers looking to conduct condominium management services in Alberta are to have their conditional license by December 1st, 2021
  • Certified Criminal Record Check must be completed
  • Condominium managers and brokers will be required to go through the pre-licensing exam challenge / education by November 30, 2022. Applicants will have different exam/education conditions placed on their licence depending on their individual circumstance
  • Apply with required documentation to RECA for review and approval.

Note: There will be three condominium management courses provided by third-party course providers (not by RECA):

  1. Fundamentals of Condominium Management,
  2. Practice of Condominium Management, and the
  3. Condominium Manager Broker Program.

The courses you must take, or challenge the exams for, will depend on your current licence status with RECA, your experience, and whether you oversee a condominium manager firm.

Consumers can perform a quick search to see if your condo manager is licensed using the Find a Licensee tool on RECA’s website.

Emerald Management & Realty Ltd. has been a licensed brokerage for several decades with RECA and excited about this advancement in the real estate industry. We are proud of our legacy of providing responsive and licensed property management services to rental properties, commercial owners, and condominium corporations.  Our system and processes have been developed to bring peace of mind and full-service offerings including customized maintenance services, administrative support, leasing and specialized management services. To learn more about our goal to enhance the quality of live by managing and providing great places to live and work, request a management proposal today!

Emerald Management & Realty Ltd. has provided proven property management solutions to Calgary & Area for close to 50 years.  Its specialized suite of services includes condominium management.  Additionally, the team at Emerald is a licensed brokerage providing professional management services to rental properties, apartment building, commercial and industrial properties, and homeowner associations.   Profit from our experience, contact Emerald Management & Realty Ltd. at www.emeraldmanagement.com or call us at 403-237-8600

 

Footnote:

  1. Legislation & Standards | RECA
  2. December 1, 2021 – Condo manager licences are now required | RECA
  3. Exemptions Announced for Condo Manager Licensing | FIELD LAW

5 Traits of Successful Condo Board Members

Condo Board members are a group of individuals – usually but not always owners within the condominium – who are elected at an Annual General Meeting to represent the interests of owners and community members that form part of the condominium property. They work alongside property management personnel, formulating decisions most suitable for the condo corporation and the condo owners or mortgagees. Board members who do their jobs effectively and practice good governance are responsible for some of the best run condos.

Here are five traits of successful board members:

1. Excellent Communicators

Miscommunication is one of the main reasons for conflict within a corporation. Because board members handle significant decisions and hold liability concerning the residents’ needs, they must be strong communicators. 

Another great trait of an excellent communicator, is a board who takes a friendly tone and communicates to educate with respect in a professional manner.  The condo board should speak with “one voice” and practice confidentiality and take care to protect the privacy of others. 

Since board members make decisions based on the community within the condominium, it is their job to communicate with fellow owners residents and discuss their needs and interests. Board members oversee the organization of events and other activities throughout, therefore it is essential to consider opinions and to communicate regularly with community members.

Listening to understand owners and residents is key to ensure that board members can govern and meet the expectations.  Whether this is an annual survey or an informal email, asking for positive feedback and opportunities for improvement is a great way to engage owners and make sure the condominium board is in touch with the current needs of the Corporation. 

Asking for feedback and providing a format to ask questions or provide feedback also helps build communication and engagement.  If engagement is a problem, maybe it is because owner’s feel that the board isn’t open to change or considering an alternate perspective. 

2. Strong Understanding of Finance

Another key obligation of the board members is working alongside property management and handling budgetary operations. A strong understanding of finance is mandatory to meet community needs concerning maintenance, events, and general affairs.

Typically, property management personnel will control the day-to-day financial obligations, but board members contribute and make recommendations based on the needs of the condo community.

3. Team Player

A condo board usually consists of three to seven people. Each board member’s role is to collaborate effectively with each other and to meet the needs of the condo community. Working together as a team is a fundamental part of the process. Board members work together by sharing ideas and asking for feedback within the group.

A team player respects the ideas and knowledge of others, keeps an open mind to suggestions, and contributes from their area of expertise.

It is up to current board members to recruit new members when the time comes. Therefore, having familiarity with the strengths of each person is beneficial when adding new members to complement existing members, or if anyone needs to be replaced.

4. Constant Learners

Managing the needs of a large community entails being open to always learning. One thing we have learned this past year … Change is constant, and technologies and policies are changing every day. People don’t live the way they did even 5, 10 or 20 years ago. 

Therefore, board members must stay up to date with corporation policies and procedures and the needs and expectations of those within the community.

The drive to keep on learning coincides with the road to success simply because the individual is open-minded and willing to go the distance. It can be as simple as learning more about dogs to help condo owners with specific issues they may run into, or as complex as the architecture within the condo to answer any questions owners may have to figure out how an improvement can be made for the benefit of all involved.

As a licensed property management brokerage, Emerald Management & Realty Ltd. invests  in the continued education and licensed certification of our team members. We believe that licensed managers demonstrate to our clients that we are invested in providing a proven professional track record of property management.

5. Organized

Organizational skills are a huge asset in becoming a successful condo board member. To execute all tasks and responsibilities, one must effectively plan and organize meetings, events, and other affairs.

Becoming a board member requires a lot of responsibility, and without the appropriate organizational skills, it would be challenging.

For more information on fundamental goals of board members and the importance of the collective decisions they make in service to corporation and the members which they represent, visit: A Beginners Guide to Condo Board Member Responsibilities. 

Let Us Help You

All condo owners want the success of condo boards. While the above are just some of the common traits we’ve found to be inherent skills of great board members. As it is just a summary, it does highlight traits integral to good governance of a condominium corporation.

Are you an existing condo board member looking to improve your skills or a community member looking to join the board? Our team at Emerald Management & Realty Ltd. can help you with answering any questions you have about the roles and responsibilities as a member of a condo board. Board members are an essential part of the condo corporation, working to keep the community safe and happy.

 Please call us at 403-237-8600 or contact us through our website.


Condominium Insurance Insights

What is condominium insurance? 

As a condominium unit owner, you have title to your own unit, as well as a share in common (and or managed) property such as the lobby, hallways, parking garage and other amenities. A bare land condominium may have fewer common areas, typically just streets or roadways but can also include managed property such as the roof, exterior siding, and sewer lines. It is important to note that the definition of what is “owned” by the unit owner depends on the condominium and typically outlined in the bylaws and on the condominium plan. 

If you have purchased a condominium unit, the insurance policy you bought might have seemed similar to something like the coverage you might have gotten with a Tenant insurance policy (i.e. Personal contents and liability).    

When it comes to buying condominium owner coverage, it is important to note that coverage is available under two separate and distinct policies: one for the corporation, and one for the unit owner. 

 Having two insurance policies can be confusing but while the two policies are separate in their coverages and wordings, in combination, they may provide all risk coverage for your unit and contents.

Detailed information about what is covered is specific to each Corporation and typically  defined in the Condominium Bylaws.  Your Insurance Broker is the expert with respect  to your personal coverage. Call them and discuss your concerns to make sure you get  the best possible coverage for your protection. 

Tip: Provide your condominium corporation’s insurance policy plus your bylaws to your insurance broker. This helps to make sure you have the proper coverage in place. 

Why do I have to buy condominium unit owners insurance? 

 The Condominium Property Act specifies that condominium corporations are responsible to insure Corporation owned property, and unit owners are responsible to insure their Units and personal property.   

 In addition to the Corporation’s policy, it is especially important that you also have a Condominium Unit Owners Policy in place for your protection. Remember: The Corporation’s policy does not cover your personal contents, liability or in many cases, improvements to your unit. 

 How does this insurance benefit me? 

 Like homeowner’s insurance, a condominium owner’s policy would cover the insured’s personal property and contents, third party liability, and additional living expenses in the event something happens (like a fire or burst water pipe) that prevents them from staying in their home.  

 In addition, condominium owner insurance also protects the unit’s improvements and betterments, deductible costs, the unit itself or a loss assessment on the building should the corporation have no insurance or have inadequate insurance for which that the owner’s policy would normally cover. 

 What is Loss Assessment Coverage? 

 Loss assessment coverage is unique to condominium insurance. Since unit owners share responsibility for common property or elements, this coverage pays your share (up to a stated limit) for a major property or liability loss on common property.  

 Important insurance changes impacting deductibles and loss assessment coverage 

 Effective January 1, 2020, the Condominium Corporation has the power to seek recovery from any Owner where damage has originated from the owner’s unit for the deductible up to a maximum of $50,000 on an insurance claim.  This “absolute liability” means that regardless of whether there was proven negligence or not, the Corporation can hold the Owner liable.  This clause is part of the Condominium Regulations (Section 62.4). 

 For example: 

 If the Corporation’s deductible is $15,000, and there is damage that originates from an owner’s unit, in the amount of $20,000, the Condominium Board has the authority to recover $15,000 from the Owner. 

 Alternatively, if the Board has a $15,000 deductible, but the damages are only $5,000, the Board only has the authority to recover $5,000. 

 In the same regard, if the Corporation has a deductible that is over $50,000 and damages exceed the deductible, the maximum the Board can recover is $50,000. 

 What steps can condominium unit owners take to protect themselves and have the proper condominium unit insurance policy? 

  1. Ask your Condominium Board or Property Manager for a copy of the Corporation’s Insurance  Certificate 
  2. Contact a personal Insurance Broker and provide them with a copy of the corporation’s certificate along with a copy of your condominium bylaws
  3. Confirm that their Unit Owner policy has deductible or loss assessment coverage and how much  they are covered for in the event they are obligated to pay. 
  4. Confirm the amount of the deductible for the Condominium Corporation’s insurance policy(on the corporation’s insurance. 
  5. Confirm that the value of deductible coverage in their Unit Owner policy is at least equivalent to  the value of the Condominium Corporation’s deductible; and 
  6. Pay attention to any notice from the Corporation which changes or increases the amount of the Corporation’s deductible and increase their coverage (to a maximum of $50,000), as required. 
  7. Get written confirmation from your insurance provider that they have deductible coverage for the Corporation’s deductible.
  8. Keep a copy of your policy with your important documents and review coverages annually on receipt of your corporation’s insurance renewal for any changes or coverage updates. 

 Note: Deductible coverage is different from special assessment coverage.  

With close to 50 years of property management experience, Emerald Management & Realty Ltd. is a licensed property management brokerage and trusted to respond with experience and responsive systems. Emerald Management & Realty Ltd. offers a wide range of condominium property management services.  Our primary goal is to offer peace of mind and help condominium boards realize the long-term profitability, a solid governance approach and assist to minimize risk.  Contact us today to find out more about how our team at Emerald Management & Realty Ltd. can help by calling 403-237-8600. 

 


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