The management agreement is the legal contract between your condominium corporation and the property management company. It defines what you’re getting, what you’re paying, and what happens if things go wrong. Most boards spend more time evaluating the company’s presentation than reading the agreement — which is exactly backwards. The agreement is where the real terms of the relationship live.
“I tell every board the same thing before they evaluate any management company: get the agreement first. Read it before you sit through a presentation. Because the presentation is designed to build a relationship. The agreement is the actual commitment. And the termination clause is the most important thing in the whole document — it tells you how easy or how expensive it is to leave if the relationship doesn’t work.”
— Jeri Dyrmishi, CEO of Synapse Property Management
Table of Contents
Questions About Scope of Services
What services are included in the base management fee?
The base management fee should cover a clearly defined scope of core services. Ask for a specific list. Core services typically include:
- Day-to-day administrative management
- Owner communication (responding to owner inquiries, distributing notices)
- Contractor coordination and supervision for routine maintenance
- Financial management: collecting common element fees, paying invoices, maintaining financial records
- Board meeting preparation: agenda, management report, financial package
- Attendance at board meetings (how many per year?)
- Compliance with the Condominium Act, 1998 and CMRAO requirements
- 24/7 emergency response coordination
What services are additional (not included in the base fee)?
Ask specifically what is NOT included in the base fee and what the additional charges are for each service. Common additional-fee items:
- Annual General Meeting (AGM) attendance and preparation
- Special assessment administration
- Project management for major capital projects (often charged as a percentage of project cost)
- After-hours calls beyond a defined threshold
- Owner dispute management or legal matter coordination
- Status certificate preparation (some companies charge per certificate beyond a base number)
- Enforcement actions (compliance letters, tribunal filings)
Get the full list of additional fees in writing before signing.
Questions About Fee Structure
How is the management fee calculated?
Management fees in many regions are typically calculated as one of:
Per-unit monthly fee: A fixed fee per residential unit per month. Varies by corporation size (larger corporations may pay a lower per-unit fee due to economies of scale) and by service level.
Flat monthly fee: A negotiated flat fee regardless of unit count. More common for smaller or simpler corporations.
Percentage of budget: Less common in residential condominium management. More common in commercial property management.
Ask specifically how the fee is calculated and whether it adjusts automatically with annual budget increases.
When and how does the fee change?
Ask specifically:
- Is the fee fixed for the term of the agreement?
- How much notice is given before fee increases?
- Is there a cap on annual fee increases?
- Can the fee change if the corporation’s unit count changes (e.g., due to development adjacent to the property)?
Questions About Term and Termination
What is the initial term of the agreement?
Management agreements typically have an initial term of one to three years. Ask what the initial term is and whether it auto-renews.
What notice is required to terminate the agreement?
This is the most important question in the entire agreement. Ask specifically:
- What notice is required to terminate the agreement at the end of the term?
- What notice is required to terminate for cause (material breach by the management company)?
- What notice is required to terminate without cause (if the board simply wants to make a change)?
- Are there any financial penalties for early termination?
What a good answer looks like: Reasonable notice periods (60–90 days is typical), clear termination-for-cause provisions with a defined cure period for the management company, and no excessive penalties for early termination without cause.
A red flag: Very long notice periods (6 months or more), significant financial penalties for early termination, or provisions that make it effectively impossible to leave the relationship.
What happens at termination — how is the transition managed?
Ask specifically what the management company’s obligations are at termination:
- Are all corporation records transferred promptly?
- Are all funds in trust returned immediately?
- Is there a defined handover period where the outgoing manager supports the incoming manager?
- Who bears the cost of transition-related activities?
Questions About Liability and Insurance
What liability limitations does the agreement contain?
Most management agreements contain clauses that limit the management company’s liability. Review these carefully:
- Is the company’s liability limited to the management fees paid in a specific period?
- Are there exclusions for certain types of errors or omissions?
- Are there indemnification provisions that require the corporation to indemnify the management company in certain circumstances?
Ask your condominium lawyer to review the liability provisions before signing.
What insurance does the management company carry?
Ask specifically:
- Does the company carry errors and omissions (E&O) insurance? In what amount?
- Does it carry general commercial liability insurance?
- Are the company’s fidelity bonds adequate? (Fidelity bonds protect against employee theft of corporation funds)
Questions About the Agreement’s Compliance with the Condominium Act
Does the agreement comply with the Condominium Management Services Act, 2015 requirements?
The Condominium Management Services Act, 2015 and its regulations specify certain requirements for management agreements. Ask whether the agreement has been reviewed for compliance with the Act and current CMRAO regulations.
Is there a provision for the corporation to access its own records at all times?
The corporation’s records — financial records, owner files, meeting minutes, correspondence — belong to the corporation, not the management company. The agreement should confirm the corporation’s right to access its records at any time, and that all records will be transferred promptly at termination.
Related Questions
- Questions to Ask a Property Management Company Before You Hire One
- Questions to Ask a Property Management Company About Financial Management
- How to Switch Property Management Companies
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