What to look for
Now you are about the examine the records that you wanted to see. So
what should you look for?
You want to see if the board is having regularly scheduled meetings.
You want to see what the board thinks is important and what they are
worried about. The minutes may also give you a feel if there are
tensions between the board members or if they work well together.
You also want to see if the important issues like the signing of
contracts, the changing of rules, passing the new budget and recent
thefts in the parking garage are being discussed and the relevant
resolutions are passed at the board meetings.
You are looking to see if important issues are being decided on by a
just few of the directors outside the board meetings.You also want to
see if any directors have requested that their opposition to any
resolutions has been recorded in the minutes book.
Look to see if there the contracts were sent out for quotes or if they
were just granted to a particular company.
If the minutes don't tell you anything and next to nothing of
importance is recorded then that tells you a lot too.
You want to check a utility bills for two or three months in a row to
the bills are
being paid in full when they are due and if the board is paying any
late penalties or missing out on any discounts for failing to pay these
bills on time.
Since the utilities bills are such a big portion of the operating
budget, if they are being paid on time then most likely all the other
bills are being paid on time.
You also want to see if the condo corporation signed an agreement with
an energy re-seller. The bill will show you that.
You want to read the previous reserve fund study and the present one so
you can compare what they say needs to be repaired, the estimated costs
of those repairs and when they need to be repaired.
If the studies are roughly in line with what, when and how much the
repairs will cost, then everything should be in order.
However, if there are big differences, you will want to read the
studies very carefully.
The other thing to look for is if the engineers say that $400,000
should be spent replacing the risers and instead the audited financial
statements state that the board spent $380,000 on renovating the lobby
and installing new carpeting and lighting in the hallways, you know
that the board is more interested in making the building look good than
being in sound repair.
The management company prepares monthly statements that compares the
actual spending compared to the budget. You want to scan through those
statements to see if the current actual spending is close to the budget
and you will get to see far more details on where the money is being
spent than you will see on the audited annual financial statements.
company & fire department inspections
The fire department and the insurance company have regular inspections
of your condo property. You want to read what they have to say about
what they saw and what they want repaired.
You also want to examine the current annual Fire Safety Inspection
Report and the latest clear Fire Safety Inspection Certificate.
Some older condos do not have a clear Fire Inspection Certificate. That
is a very serious matter.
If in error, you see information that is clearly confidential and is
something that you should not have seen, then respect the
confidentiality of that information.
For example you saw that several owners are in arrears, keep that
information to yourself. If you fail to respect those owners privacy,
then you really are not to be trusted by anyone from now on now are you?
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