ACMO Comments on the White Paper on Proposed Licensing of ...

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<strong>ACMO</strong>
<strong>Comments</strong> on the White Paper on
Proposed Licensing of Strata Managers
<strong>ACMO</strong>
The Association of Condominium Managers of Ontario was formed in 1977 to represent
the collective interests of all condominium managers in Ontario. <strong>ACMO</strong>’s mission is to
advance the quality performance of condominium managers in Ontario. 1
<strong>ACMO</strong> provides formal education programs which coupled with experience and
successful completion of an all inclusive exam culminate in the well known Registered
Condominium Manager (RCM) designation. This formal education is provided through
several colleges in Ontario as well as on-line through Mohawk College. Ongoing
education is provided through luncheons, seminars, technical bulletins, a quarterly
newsletter and the CM Condominium Manager magazine. In this increasingly complex
profession, this education provides <strong>ACMO</strong> members with a solid foundation for business
success.
All RCM members (individuals) are governed by a strict Code of Professional Ethics
which enhances the conduct of the profession. Corporate members (companies which
provide condominium management services) are governed by a Corporate Code of Ethics
in all their dealings with customers, suppliers and employees.
Last year <strong>ACMO</strong> deployed a new program entitled <strong>ACMO</strong> 2000. This program permits
condominium management firms to put in place ISO-like quality standards in a very cost
effective manner. The firm’s standards are audited by the Business Development Bank of
Canada, the largest ISO auditor in North America. The certificates are awarded by an
independent organization, the Condominium Management Standards Council, which also
handles disputes which arise under the program.
<strong>ACMO</strong> also provides networking and marketing opportunities to service and trade
companies through Associate membership. In turn the Associates provide <strong>ACMO</strong> with
valuable technical and legislative resources.
Complete details on these services can be found on <strong>ACMO</strong>’s web site at www.acmo.org.
1 . There are different definitions used in B.C. For purposes of this submission it should dbe noted that
“strata corporation” is the same as the Ontario term “condominium corporation”; “strata manager” is the
same as the Ontario term “condominium manager; “strata management services” is the same as the Ontario
term “condominium management company”. The term “property manager” has a similar meaning in
Ontario and can include management of rental housing. IHM provides education and a designation for
property managers in the co-op sector. REIC provides education and a designation for property managers in
the commercial sector.

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<strong>ACMO</strong> has a close working relationship with the Canadian Condominium Institute (CCI)
which represents primarily the condominium owners. A key example of this collaboration
is the national conference held each year and cosponsored by the two associations.
Ontario
There is no direct government regulation of the condominium management professional
nor the condominium management companies in Ontario. <strong>ACMO</strong> has been in ongoing
discussions with the Ministry of Consumer and Commercial Relations (MCCR) on the
issue of professional self-management. MCCR oversees self-management councils in a
number of sectors. Typically the sectors involved have had serious consumer complaints,
e.g. travel agencies, car body repairs shops, real estate agents. There has been no such
impetus in the condominium management sector. Nevertheless, <strong>ACMO</strong> is urging selfmanagement
in light of the increasing complexity in condominium legislation, the
significant fiduciary responsibilities associated with condominium management and the
potential for inadequate management of the physical building structures.
Many of the <strong>ACMO</strong> services described above are positioning the profession for selfmanagement.
As will be described in more detail to follow, many of the issues raised in
the White Paper are currently being handled by <strong>ACMO</strong>.
<strong>Comments</strong> on the White Paper
The following comments on the key aspects of the White Paper are based upon <strong>ACMO</strong>’s
experience in Ontario. While there are obviously some differences between B.C. and
Ontario, the fundamentals of the condominium communities are very similar.
Licensing of the Firm
In <strong>ACMO</strong>’s view it is important that the condominium management company have the
proper tools in place to permit professional management by its staff. <strong>ACMO</strong> has handled
this issue in two ways. First, the Corporate member must have a RCM supervising all
condominium management functions. This ensures that a well trained staff member has
ultimate responsibility for the management functions at each condominium corporation.
Second, condominium management firms can go to the next level and obtain their
<strong>ACMO</strong> 2000 certification. The quality standards required of these firms is extensive. 2
However the intrusion into the financial affairs of the condominium management firm is
not as extensive as that proposed in the White Paper. <strong>ACMO</strong> 2000 firms are required to
provide a bank reference and must demonstrate that they keep proper financial records of
their own business. The are also required to carry insurance including errors and
omissions.
2 A copy of the Standards Manual will be forwarded with a hard copy of this submission. The manual
contais minimum standards in a broad range of areas including: financial reporting for client; contracts;
dealings with suppliers and ongoing staff training.

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<strong>ACMO</strong> is not aware of why the White Paper proposes significant financial information
from the condominium management companies. Our understanding of the Barrett Report
is that the skills of managers, especially in the area of physical building management was
the key concern. Unless financial failures of condominium management firms is a known
issue, <strong>ACMO</strong> would recommend a less intrusive financial supervision of the
condominium management companies.
<strong>ACMO</strong> requires both its Corporate and <strong>ACMO</strong> 2000 member companies to adhere to a
strict code of ethics. The code covers conduct with condominium corporations, suppliers
and employees. <strong>ACMO</strong> has an ethics resolution process based on the arbitration and
dispute legislation in place in Ontario. Furthermore in the case of <strong>ACMO</strong> 2000
companies complaints of not following the quality standards are dealt with by the
independent Condominium Management Standards Council. Clearly an arbitration and
mediation resolution process is an important component of any self management of
regulatory program.
Licensing of the Individual
The White Paper describes the purpose for licensing as ensuring the appropriate skills
and knowledge and to provide for accountability. <strong>ACMO</strong> agrees completely that today’s
condominium manager requires significant training in all areas of condominium
management. As will be described more fully below, this training needs to be specific to
condominium management and must be extensive. The training must be accompanied by
an all inclusive exam prior to any designation/licensing. It is also important that ongoing
education be available to the condominium manager.
It is clear that the Barrett Report determined that education is a key requirement in the
sector. In <strong>ACMO</strong>’s view the foundation for education must be in place prior to any
licensing. Otherwise the public will be given a false and inappropriate comfort that the
licensing regime will look after the public interest.
The accountability of condominium managers is also important but must be assigned in
light of the relationship to the manager’s employer. With regards to day to day conduct
<strong>ACMO</strong> covers the accountability through its Professional Code of Ethics. This code
recognizes that some conduct is beyond the control of the individual managers. For
example, the terms of the contract between the condominium corporation and the
condominium management company is not within the control of the manager.
Accordingly a separate code of ethics for companies has been established. The individual
manager should also have their insurance liability covered by their employer.
Education
The White Paper identifies the key areas that require education programs. In <strong>ACMO</strong>’s
view, these areas have been properly described. <strong>ACMO</strong> would encourage a review of the
course curriculum of its four courses as set out in our web site. These are considered
entry level courses for condominium managers. In <strong>ACMO</strong>’s view anything less than this

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level of training would not serve the B.C. condominium community. As the review of the
courses readily makes apparent, specific training on condominiums is required. General
property management courses or supplemental courses to other training is not sufficient.
<strong>ACMO</strong> does provide for educational exemptions to the course, e.g. a commerce graduate
would not be required to take the financial course. There is also an experience exemption
if a manager can demonstrate that they have a minimum of five years directly managing
condominiums. However, it is important to note that there are no exemptions to writing
the RCM exam. This exam is all inclusive of the course material and has a 75 per cent
pass grade. There is a moderate failure rate and those managers are encouraged to take
the course(s) in their weak area(s).
Regulatory Options
After reviewing the two regulatory options, <strong>ACMO</strong>’s strong recommendation is to use
the Homeowner Protection Office (HPO). There are several reasons for this opinion.
First, the Barrett Report was correct to identify the potential for conflict between the
goals of the real estate sector and those of the condominium management and owners.
The real estate agent may do initial work for the developer of the condominium and may
not be forthcoming on all aspects of the building. Once the unit is sold, the agent has no
interest in the ongoing maintenance of the facility or in the future governance issues. It is
also the experience in Ontario that any real estate agents involved in management are
typically involved in commercial or rental. As noted above, the condominium sector
requires dedicated and specifically trained condominium managers. Finally, the HPO
clearly has the homeowner’s interest foremost in its mandate.
Second, the HPO proposal correctly notes that education must be phased in and until that
occurs any individual licensing should be reserved. In contrast, the REC model would
have individuals licensed notwithstanding that the managers have no additional skills or
knowledge. This is clearly not in the public interest.
Third, The HPO has experience in licensing in the construction area, an area of greatest
concern in the B.C. condominium community.
Fourth, licensing under HPO would ensure that the distinct and unique aspects of
condominium management is maintained and not commingled into real estate which is an
entirely different business.
Fifth while assigning the responsibility to HPO may delay licensing, given the important
pubic interest issues, <strong>ACMO</strong> submits it is more important to do the regulation properly
than quickly. Key aspects of the firm level regulation could begin with individual
licensing tied to the development of education programs.