Property management companies can vary when it comes to the services they provide to condominium boards. Sometimes, we’re asked about the benefits of hiring a licensed property management company. That’s why we have collected some of the most pertinent information on the matter and compiled it in the article below.
There are numerous advantages when it comes to hiring a licensed brokerage to handle the property management needs of your condominium building. Some of the more notable benefits have to do with accounting best practices, and how a licensed property management company can save your condo board time, money and a bundle of stress in the long run.
What are some of the accounting benefits that come with hiring a licensed property management company?
- Audits: Usually the board members will not be required to perform a full audit when they have been consistently using a licensed property management company that has an in-house controller or proper accounting department who are required to keep financial documentation and store it in an appropriate manner. This will save a great deal of time and possibly prevent the need for an annual audit. A financial review is approximately $2,500, while a full audit can exceed $12,000, which represents funds that are much better spent on the condo building itself.
- Budget Planning: Once every fiscal year, the condo board of directors must approve a budget that is prepared based on expected revenues and expenditures for the next 12 months. The budget is the board’s responsibility, and creating it can be a complicated process. However, the board can appoint their property management company to advise on this, which will help to prevent costly mistakes and potential conflicts between members.
- Financial Advising: Many problems facing condo boards are either created or made more complicated by the simple fact that owners or directors lack knowledge about the financial difficulties that may arise during the administration process. A professional and licensed property management company can offer timely and expert advice that will mitigate these types of issues and allow for greater clarity when it comes to financial matters.
- Saving Time: We are all aware of the age old saying that time is money. By delegating these tasks to your property management company, you will save a load of time that could be spent on other matters, not to mention the headaches that you can avoid by having a team of experts on hand to advise on complex financial situations.
Remember, the Alberta Government is now in the process of passing legislation that will require all property management companies to have the appropriate licensing. These changes will not only ensure that multi-family condominiums are maintained properly, but also that financial records are properly documented.
Although it isn’t the law just yet, the last thing you want to do is to hire an unlicensed property management company, and then for the legislation to be passed. This may mean an unnecessary change down the road, which could come at an inopportune time. So if you are looking to hire a management company for your condo board, it is best to ensure that they are properly licensed, as this will likely become mandatory in the near future.
Looking to hire a licensed property management company?
Braden Equities Inc. has been successfully managing condominium buildings in Edmonton since the 1970s. A lot has changed since then, but our commitment to the residents living in each building we manage has not. Contact us today.
Thank you for reading our blog. What are your thoughts on the importance of hiring a licensed property management company?