Terminating the PMC
“You can get fired from any job at any time.”
—Jorge Garcia

A board of directors should think carefully before making the decision to terminate their property management company (PMC).

However, there are times when it is obvious that the condo corporation has hired the wrong management company and a change is required.

Churning PMCs
Some condos regularly replace management companies. This should be a rare situation but unfortunately, at some condominiums, they change management companies as often as Liz Taylor changed husbands.

There are condos that have gone through five PMCs in five years and are still unsatisfied. Why? Either the board is paying far too little to attract a competent company, the building is suffering from political strife or the corporation has an erratic board that is impossible to please.

Property management companies, like security companies and lawyers, are use to losing contracts; it happens all the time. Minor resentments build up over the years. so owners look to get even. Newly elected boards often terminate almost all of the existing contracts. (Personally, I think that in many cases this is a big mistake.)

Lost records
This is when the management companies show their true colours. The Act states that the company is required to transfer all the corporation’s records to the new PMC. In fact, some important files always seem to get “lost” during the transfer. Other companies keep the records "hostage" until they receive their full two-months pay.

Missing records are no joke. The board will discover that a few months later when the auditor says he hasn’t got all the records he needs to complete the audit or a contractor cannot find the building drawings he needs to work on the electrical system.

The storage of the corporation's records gets tricky. If you have an unethical PMC, they may destroy some of your important records. Yet if you keep the files at the condo's office. then a disgruntled director, or a director that has something to hide,  can "lose" the files.

Whether the property management company should keep the corporation's records or the records should be kept on the condo's site, is something, I am still wrestling with.

In all cases, it is important that the board members have the current password for the corporation’s computer and that the hard drive is always backed up and the backup drive is kept on site in a secure location.

Office forms and reports
At many condos, the manager drafts the different forms that the condo requires. They include:
• Applications for booking the amenities.
• Enter a resident's suite forms.
• New resident's information forms.
• Elevator notices.
• Contractor forms.
• Concerns & suggestion forms.

The manager adds the property management logo to all of these forms. When they leave they take all the empty forms, and the electronic masters with them because they have their company's name and/or logo on them so the forms are "their" property.

Re-writing these forms is a time-consuming process.

It may be prudent for the condo retains ownership of all forms used on the property.

Automatic billing
Some PMCs put their monthly fees on automated billing. When their contract expires, they continue to receive their monthly fees up until the corporation becomes aware of what is happening and stops payment. Then, the condo may have to take them to small claims court to recover the excess fees.

If you find out that your PMC has put themselves on automatic billing, and some will do it without authorization, go to the bank and put a stop to the withdrawals prior to informing the PMC that their services are no longer required.

Giving notice
The standard PMC contract states that they are to be given two months notice prior to termination their contract. Most condo corporations give the PMC notice and have them work for the next two months until the new company starts.

(I understand that PMCs are now asking for 90 days notice but I believe that is excessive. One company in the GTA has a six month notice requirement in their standard contract. That could be very dangerous for the condo corporation as the PMC can cause a lot of trouble during that six month period.)

If there is any suspicions of dishonesty, I strongly recommend that the condo instructs the PMC to vacate the manager’s office immediately after being given notice and the condo pay them their two months notice and have the new PMC start immediately. It would be a good idea to change the lock on the office door and change the computer passwords.

The damage that the current property manager can do during the next two months can be far in excess of the costs of paying for two companies for such a short time.

Umbrella bank accounts
The condo corporation should have its bank accounts at a local bank branch. The directors should bring the new account signature cards to the bank themselves and be sure to cancel the old ones.

I do not think it is wise to allow the PMC to set up the condo's bank accounts at their branch and for the manager to be given the signature cards to take to the bank.

A few property management companies deposit all the cheques from all the condos they manage into an umbrella account and then issue monthly statements to their individual condo corporations so it looks like they have their own separate account. They do not.

When one GTA condo changed PMCs, the directors and the new property manager went downtown to the bank branch where their previous PMC setup their account. The bank would not talk to them as they said that the previous PMC owned that account. The director's signature cards were not on file with the bank branch.

The new manager and the corporation lawyer had to battle it out with the terminated PMC to get the funds released.

E-mail account
Management companies have ways to make it difficult for a condo corporation to replace them and one that is often overlooked is the condo corporation's e-mail address.

A management company may offer a condo an e-mail address on the company's server. It may be suggested that there are costs savings and enhanced security features by doing so. Perhaps that is so.

However, when you terminate the relationship, you lose your e-mail address. This causes two issues:
The condo corporation needs to set up a new e-mail address and must inform all interested parties of the change. All new e-mails sent to the old account must be forwrded to teh new account. Not an easy task.
You have to negotiate with the property company to have all your e-mail files transferred to the new e-mail address.

In doing this you may find that the condo is charged high fees for this service or that the terminated company has no interest in assisting their successor retrieve the data.
Inform everyone
In Windsor, a condo discovered that their previous property management company was not forwarding their mail to them. They were either holding their mail or throwing it out.

It is important to inform the bank, all of your contractors and your suppliers that you have changed management companies and give them the corporation's new contact names, phone numbers and mailing address.

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