What to look for

Now you are about the examine the records that you wanted to see. So what should you look for?

Board meeting minutes
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 see if 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.

Reserve Fund Studies
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.

Monthly financial statements
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.

Insurance 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.

Keep confidences
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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