PART 3: “But what about…?” Answers to key questions about manager licensing
In our previous two entries (here and here), we discussed several key provisions in the recently proposed draft regulations under the Condominium Management Services Act, 2015 (hereafter, the “CMSA”). In this entry, we explore a few questions that readers might have arising from or relating to these regulations.
(1) Must a licensed manager be employed by a management company?
The short answer: Some likely must; others need not.
A Limited License holder must be supervised by a General Licensee, and therefore likely must be employed by a provider that can offer that supervision. In fact, while the draft regulations state that a General License holder cannot be employed by more than one condominium management provider without consent, they state that a Limited License holder “shall be employed” by not more than one such provider without consent. It is not quite as direct a statement as might be wanted, but appears consistent with the view that a Limited License holder must be employed by a management company.
However, a General Licensee can operate as a sole proprietor or be employed directly by clients. These are potentially two ways of describing the same thing, but might not be intended to be identical in the regulations, in so far as a sole proprietor must also obtain a condominium management provider license, while a person employed directly by a corporation as a manager likely need not. It wouldn’t hurt for the government to add some clarity on this point.
The draft regulations further provide that where a manager is employed directly by the condominium, the manager cannot be employed by more than three condominium corporations at the same time. This requirement may be problematic for a manager who manages a community of condominiums of the sort that were prevalent prior to the introduction of Phased Condominiums under the Condominium Act, 1998. Such communities act more-or-less as a single entity, and some contain well more than just three condominium corporations. It would likely be fair for the government to provide an exception (or discretion on the part of the Registrar to grant such an exception) in those cases. (Alternatively, if being a sole proprietor – which requires obtaining a condominium management provider license as well as a General License for the manager individually – is intentionally different than being directly employed – which might only require the manager to be a General Licensee – then that might be the means for a manager to get around this particular restriction.)
(2) What about self-managed condominiums?
The short answer: Directors of self-managed condominiums need not be licensed.
One of the most significant concerns raised early on when condominium manager licensing was first discussed, was how to protect the right of condominiums to be self-managed. The draft regulations address this by a straight-forward exemption: A condominium management license is not required by “A person who is elected or appointed as a director of a condominium corporation under the Condominium Act, 1998, including a director who receives compensation pursuant to a by-law made under clause 56 (1) (a) of that Act, unless the person is providing condominium management services for compensation or reward or the expectation of such.”
What this means is that condominium directors, whether elected or appointed, can manage their own condominiums (the regulation does not actually specify this limitation, but it reasonably should be read that way) without needing to be licensed.
We have recommended to the government that this exemption be extended to expressly include officers of the corporation. The actual activity of self-management is largely carried out by individuals not in their capacities as directors, but as officers (e.g., president, secretary, treasurer, etc.) of the corporation. Though many, if not most, officers are also directors, an officer need not be a director, so there is the risk that at least some officers in self-managed corporations would still require licensing, which could defeat the generous purpose of this exemption.
It may also be noted that the regulation even permits the director to receive remuneration under a by-law of the corporation; however, it then attempts to restrict this only to compensation that has nothing to do with providing condominium management services. It is not clear what else a director does, though, (since the corporation, and thus, its directors, have the exclusive mandate of managing the property on behalf of the owners) so unless this is further clarified when the regulations are finalized, it would likely be safest for directors simply not to be compensated lest they risk being required to become licensees.
It is also not clear how anyone would determine with certainty whether a director provided management services with “the expectation of” remuneration. One might expect it all one likes, but the real test should be whether or not any compensation is actually paid.
(3) Are there exceptions for other providers of management-related services to condominiums?
The short answer: Yes.
Lawyers, architects, accountants, engineers, and insurance brokers are all exempted from requiring licenses, provided that the services they provide are within the scope of their respective professional designations.
The draft regulations also exempt banks and court appointed receivers, Inspectors and Administrators.
Security guards are exempted in regard to holding owners’ contributions to the common expenses for safe keeping, and in regard to supervising employees or contractors of the condominium corporation. The draft regulations further exempt employees of condominium management providers whose sole responsibility (in regard to the condominium) is to collect and hold contributions to the common expenses.
Lastly, individuals who solely provide maintenance or repair services do not require licenses. The draft regulations state that this expressly includes landscaping and cleaning services. Not only does this exemption round out the exemptions so that virtually all providers of services relating to condominium management, other than managers themselves, are exempted, it even captures in its scope the volunteer “handy-man” resident who might putter about the garden or do the occasional plumbing repair for the property.
(4) Where do I get information about a manager’s license?
The short answer: Ultimately, on-line, as well as in some other form.
The Registrar appointed under the CMSA will have a responsibility to compile and make available a whole raft of data regarding each licensee. The regulations require that the information be accessible on the managers governing authority website, as well as in “at least one other manner that the registrar considers appropriate.”
Such information will cover the identity and contact information of each licensed manager and management company, as well as status of the license and details of any conditions attached to a license, complaints, proposed suspension or revocation, disciplinary action, charges and appeals. Financial information that is reasonably deemed to be confidential will not be disclosed.
Some of the disciplinary information will only remain accessible for two years after the sanction in question has ended, while a finding of guilt for an offence will remain visible on the manager’s record for five years.
Providing access to this kind of information is critical to raising the bar for the provision of condominium management services generally and integral to the representation of condominium managers as professionals. Similar information is available on-line with respect to lawyers and teachers and other professionals, who are also subject to governing authorities and disciplinary structures. It represents a commitment not only to transparency but to the accountability that grounds integrity and public confidence in the profession.