Condominium management standards

Written by Shlomo Sharon and Vaishali Taylor

The Ontario government is preparing to license both condominium managers and management companies. But until it rolls out the Condominium Management Services Act, the industry remains unregulated. In the absence of regulation, the Association of Condominium Managers of Ontario (ACMO) created its own condominium management standards, which it recognizes with ACMO 2000 certification. What does it mean to be an ACMO 2000-certified management company? Taft Forward’s CEO, Shlomo Sharon, and Vice President & ACMO 2000 Leader, Vaishali Taylor, explain.

There are currently about 600 property management companies operating in Ontario. At the

time of writing, only 39 of them possessed the Association of Condominium Managers of Ontario’s ACMO 2000 certification.

The ACMO 2000 certification predates the provincial government’s plans to regulate the condominium management industry. In fact, the association representing condominium managers in Ontario lobbied for licensing as a way to raise professional standards.

Bill 106, which introduced the Condominium Management Services Act, has been passed but it has not been proclaimed into force. For now, the industry remains unregulated.

In this unregulated environment, the ACMO 2000 certification recognizes condominium management firms who meet its core operational standards. These standards are designed to ensure the consistent delivery of high quality service to condominium corporations and provide benchmarks against which to measure ongoing performance. The ACMO 2000 certification is based on eight principles: Customer focus, leadership, involvement of people, process approach, systems approach to management, continual improvement, management by facts and supplier relationship.

The ACMO 2000 program provides credibility to participating ACMO members, who are supervised by

ACMO’s Condominium Management Standards Council. The council includes a lawyer, an accountant and Registered Condominium Manager (RCM), an Associated of the Canadian Condominium Institute (ACCI) representative, an engineer or architect, corporate member and/or experienced condominium board member.

A management company must meet the following eligibility criteria to obtain ACMO 2000 certification:

1. Legal status: The management company can be an incorporated company, registered partnership or a registered sole proprietor. It cannot be a condominium corporation or employee thereof.
2. Organization of the firm: The management company must manage a minimum of three condominiums or a total of more than 500 units and have an office, equipment and personnel to operate its business.
3. Experience: A senior operating manager or the owner must have at least five years of condominium management experience and possess the RCM designation.
4. Financial reference: The management company must provide a financial reference from its bank.
5. Membership: The management company must be a corporate ACMO member in good standing and actively engaged in managing at least one condominium in Ontario.

Initial certification involves an audit of the management company’s standards and procedures. The compliance audit is done through sampling, meaning it is not necessarily a full review of the standards, procedures and policies. The audit which takes place over two days, focuses on eight quality management principles to ensure that the management company meets all the ACMO 2000 requirements.

On the first day, the auditor meets with and interviews management executives regarding the firm’s ACMO 2000 policy and strategic objectives, and how they meet ACMO standards. The auditor then reviews the firm’s ACMO 2000 manual and associated, documented policies and procedures. This include management responsibility, board relations, purchaser and supplier relationships, accounting, administration and insurance, human resources and the measurement and improvement.

The auditor also selects fives properties from a list of properties under management provided by the company. The auditor then reviews their monthly operating reports, which includes the income and expense statement, cash disbursements and cheque register, accounts receivable, investment of the reserve funds, list of accrued invoices, bank statements, statements of reserve fund as well as actual financial statements and budgets.

On the second day, the auditor inspects any two out of the five properties that were chosen on the first day of the audit. These visits include a tour of the building’s interior, exterior, all facilities and common elements. The auditor also interviews site staff and reviews the building’s operations manual and associated records. If the condominium corporation does not have an on-site office, the auditor tours the exterior of the property.

The auditor prepares and sends his or her report directly to ACMO. Then, ACMO notifies the management company of the outcome.

There are two possible outcomes. One is that the auditor found no non-conformities and issued a clean report; the other is that the auditor identified deficiencies. If there are deficiencies, the management company must rectify them within six months from the date the report was issued.

Since management companies pay for these audits, it’s in their interest to ensure that they are in compliance not only for the audit purposes, but also to ensure that their day-to-day operations maintain ACMO 2000 standards. Once certified, the company must undergo compliance audits every three years to ensure that it continues to meet ACMO’s standards.

Just as management companies benefit from this certification, so do condominium corporations and their boards. Knowing the management company is ACMO 2000 certified gives the board additional security that the management company is expected to provide an assessable standard and consistent level of service to the corporations.