What to Expect from a Strata Manager

IS A STRATA MANAGER AN AUTHORITY ON THE STRATAS RESPONSIBILITIES?

In our experience, there is a wide range of what individual owners and members of Council expect from a licensed strata manager. Licensed strata managers are subject to legal standards of performance that are enforced by the BC Financial Services Authority. It is important that owners and members of Council understand those legal standards so that they can manage their expectations. A strata manager is not a substitute for a functioning Council, a lawyer, a paralegal, a risk manager, an engineer or another trained professional. Strata managers provide valuable assistance to Stratas, but they should not be seen as the ultimate authority for the exercise of the powers and obligations of a Strata.

MUST A STRATA MANAGER ACT IN THE BEST INTERESTS OF THE STRATA?

The consistent and over-arching responsibility is for a strata manager is to act honestly and with reasonable care and skill.

This means that the strata manager must prioritize what will benefit the Strata over their personal preference.

An example is a situation where a Strata has requested that the strata manager identify options for a depreciation report. The strata manager has worked previously with a specific engineer and they have become friends. The quote and timeline from that engineer is both higher and involves a greater delay than another engineer. The strata manager cannot decide to tell the Council only about the quote from the engineer that they are friendly with and ignore the other quote. However, the strata manager could present both quotes and explain why they prefer the engineer they are friendly with.

DOES A STRATA MANAGER NEED TO TELL THE STRATA ABOUT 'REFERRAL FEES' AND OTHER POSSIBLE BENEFITS?

There are situations where a strata manager may be offered or anticipate that they will be paid or provided a significant benefit from someone because of their association with the Strata. These are sometimes called “referral fees”.

A strata manager must tell the Strata, in writing, of this additional payment. Sometimes, this additional payment is permitted directly in the strata management contract.

It can sometimes be difficult to decide what is additional remuneration.

An example of where there clearly is additional remuneration would be if a service provider offered to pay $500 for each contract that it was able to sign with the Strata.

An example of where it is less clear, is if a service provider hosts a party to thank its ‘business partners’ and a strata manager is invited because of the work that service provider did for the Strata.

The safest option is for a strata manager to inform the Strata of every meaningful benefit that they receive from someone that has a contract with the Strata.

It is important to recognize that there is no prohibition on a strata manager receiving additional remuneration, they just cannot hide that additional remuneration from the Strata.

DOES A STRATA MANAGER HAVE TO DO WHAT THE STRATA INSTRUCTS THEM TO DO?

When the Strata instructs a strata manager to do something, they must do it unless it is unlawful or outside the scope or the contract. It does not matter if the strata manager thinks the decision of the Council is a bad idea or mistake.

For example, if a Strata instructs a strata manager to pay an invoice, the strata manager cannot decide to not pay the invoice and start a dispute with the person the Strata instructed them to pay.

CAN A STRATA MANAGER DO MORE THEN THEY ARE DELEGATED IF THE STRATA MANAGER THINKS IT IS IMPORTANT OR EFFICIENT TO DO SOMETHING?

A strata manager is delegated specific responsibilities by the Council. They can only do the things that they have been delegated.

For example, if a strata manager is delegated the authority to speak with a lawyer about collecting a debt, the strata manager cannot also speak with that lawyer about other legal issues such as bylaw amendments.

CAN A STRATA MANAGER REFUSE TO PROVIDE ADVICE AND INSTEAD TELL THE STRATA TO TALK TO ANOTHER EXPERT?

Strata managers are frequently asked questions by the Council that are beyond the professional knowledge of the strata manager. In that situation, the strata manager needs to advise the Council to get proper professional advice.

An example that we encounter fairly frequently is when the Council has asked a strata manager about the interpretation of application of a provision on the Strata Property Act. The strata manager provides their opinion based on experience of what another strata manager recommended and that advice ultimately is incorrect. This exposes the Strata to potential legal liability or wasted expense. A strata manager, even if they think they know the answer, should always advise a Strata to get advice from someone that is properly trained to provide professional advice.

DOES A STRATA MANAGER NEED TO KEEP THE STRATAS INFORMATION CONFIDENTIAL OR CAN THEY SHARE IT WITH OWNERS AND OTHER PEOPLE?

Strata managers are exposed to significant amounts of information that should be treated as confidential. This includes everything from which owners are not current on their strata fees to legal opinions received by the Strata. A strata manager must maintain confidentiality regarding this information, and they are subject to the Strata’s privacy policy.

DOES A STRATA MANAGER NEED TO TELL COUNCIL EVERYTHING, EVEN IF IT IS BAD NEWS OR A PROBLEM THE STRATA MANAGER THINKS THEY CAN FIX?

Strata managers may get information that they think may upset or disappoint the Council. However, a strata manager cannot withhold this information.

A possible example is if a preliminary assessment for a depreciation report indicates a significant and previously unanticipated requirement for a repair, the strata manager must disclose that information to the Council and cannot try to minimize it to not upset the Council.

Another example is if the strata manager omitted to do something that has consequences. This occasionally occurs when bylaws are adopted at a general meeting and the strata manager fails to register them with the Land Titles and Survey Authority of British Columbia (LTSA), which means they are not binding. If there is a complaint about the possible breach of one of these bylaws, the strata manager must disclose that they were not filed and therefore not enforceable.

DOES A STRATA MANAGER HAVE TO AVOID A CONFLICT OF INTEREST WITH THE STRATA?

A strata manager cannot act both for the Strata and another person if the Strata and that person do not share the same goal.

There are two situations where this most commonly occurs:

• When the strata manager also acts as a rental manager for an owner of a strata lot in the Strata.

• When the strata manager represents both the Strata and a section within that Strata or two sections within the same Strata.

There are several ways that a strata manager can avoid acting in a potential conflict but the key point for a Strata to know is that the strata manager must clearly state the potential for a conflict and work with the Strata to manage any risk.

DOES A STRATA MANAGER OWE ANY DUTY TO OWNERS OR THE PUBLIC THAT ARE DIFFERENT FROM THE DUTY TO THE STRATA?

In addition to the duties that a strata manager owes to the Strata, they also must act in a way that protects the public and the real estate industry.

A strata manager may be disciplined if they act in a way that is:

• Contrary to the best interests of the public.

• Undermines public confidence in the real estate industry.

• Brings the real estate industry into disrepute.

This duty applies even when a strata manager is not directly involved in providing services to a Strata. For example, if a strata manager was convicted of a significant criminal offence it may result in discipline by the BC Financial Services Authority.

THE RELATIONSHIP WITH A STRATA MANAGER IS BASED ON REASONABLE EXPECTATIONS

Professional strata management services are very important to the smooth administration of many Stratas. It is important for Owners and members of Council to understand the limits on what a strata manager can do and to understand the responsibilities that a strata manager owes to the Strata.

In our experience, there are three key things that must be followed:

• The strata manager must act honestly.

• The strata manager must act with reasonable care and skill.

• The strata manager must not provide advice that they are not qualified to provide.