QUELLING FINANCIAL MISUNDERSTANDING

What to expect from a director sitting on a board?

1. A director should know enough about accounting that they can understand the financial statement produced each year for the condo corporation and how the budget is managed.

2. A director must avoid conflicts of interest and the appearance of such conflicts.

3. A director should act prudently and use experts in appropriately maintaining the condo property.

4. A director should not prioritize their own interests but rather make decisions that will benefit the largest number of condo owners possible.

Condo owners must:

“Some condo owners may think they’ll be keeping the condo for a few years without any intention of holding it for a long period of time,” says Chio. “That kind of creates an incentive for them to advocate for lower condo fees in the short term. However, in recent years, the general market economy shows it can take a turn very quickly, resulting in the unexpected use of money.”

Alternatively, when long-term owners are ready to sell, they may be doing so in a softer market. “The adequacy of the reserve fund would play a role in determining the value of the condo,” says Chio. “It’s in

1. Think critically about what makes a director efficient and competent at their job.

2. Think about what increases the value of a condo property and what can destroy value.

3. Assess how all condo owners’ interests can be appropriately represented by the board.

The tips listed above are extracted from the CIA Insight Statement: Longevity of Condo Infrastructure.