Khan-lessons-learnt

Lessons learnt

The finance companies that loaned millions to condo corporations due to Khan's fake loan by-laws were taught a good lesson. Of that I am certain. No one else will be able to duplicate that scam.

But what about condo owners and directors? What are the lessons they should learn from from all of this?

All condo owners

1.	Understand that financial controls in condo corporations can be very weak or even non-existent.
2.	It is extremely important that all owners attend the owner meetings and learn how to read the audited financial statements.
3.	Most fraud in condo corporations goes un-detected.
4.	Remove from office all directors who make it difficult, or refuse to allow reasonable requests by owners to examine corporation records.
5.	Read the current Reserve Fund Study. A copy should be kept in the manager's office.
6.	Remember, most often it is an condo owner, not a director, who first raises the alarm that fraud is taking place.
7.	Manzoor's fraud at Credit Woodlands and at MTCC #710 are more instructive on how condos get cheated than his fraudulent loans because they are far more common.

Directors

1.	A new board may ask for a new manager but they should think carefully before changing management companies unless there are compelling reasons to do so.
2.	Be careful when hiring a new property management company. Channel looked professional, had fancy presentations, made big promises and always offered the lowest price.
3.	Check the management company's references and the manager's qualifications. Visit other condos that they have under contract.
4.	Don't let the property management company select the corporation lawyer or the outside auditing company. The board should keep the three independent of each other.
5.	Don't hire contractors that are sister-companies with the management company.
6.	Be careful if the new management company wants you to change banks.
7.	The manager makes out the cheques, but two directors have to sign all cheques.
8.	All the corporation's correspondence needs to be received at the condo's management office, not the management company's office.
9.	Have the corporation's internal financial controls verified by a third party audit company on a regular basis.
10.	If a director sees something that does not look right, question it. Manzoor Khan resigned from condo corporations where the directors, or the owners, were on to him.