A condo owner will do the books and save the corporation money!

SC writes: We have an owner who is willing to do the condo books for $200 per month. Can we use this person and save the corporation money?

Paul replies:

SC: Great question. I am not aware of anything that would prevent the board to contract with this individual to “do the condo books”. I will assume that you mean that this individual would handle the finances. BUT there is much more than the books that need to be done. In order for a person to make entries into an accounting system, bills have to be received and processed, approved and paid. If you have employees, payroll records including deductions for taxes need to be tracked and comply with employment legislation. Manage banking transactions and reserve fund investments. Prepare monthly and yearly financial statements. Ensure the proper storage of all financial documents. This is probably a short list of the work involved.

If you are a small condo corporation (10 units or less) then maybe one of your owners with knowledge and experience in accounting could perform the need tasks. Larger corporations however probably need experts to manage your financial portfolio under the board’s direction. What backup support could your single owner provide? Professional Property Management firms or accounting firms not only have the knowledge and experience but also have depth in their companies, people to jump in if something were to happen to the person dedicated to your account. The single service provider, in this case, your owner, would not be able to offer this level of support. While such an individual may be well-intentioned, competent and available, the risks could wipe out any savings. The last point I would like to make is that owner provided services to the corporation may save money, however, when something goes wrong the condo corporation may find itself in the situation of having to sue one of its owners or the owner find themselves in a conflict of interest. I would prefer a third-party at arm’s length to the corporation. Good luck!

 

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