The management contract determines the obligations and the remuneration method of the manager specifying the duration and the nature of the mandate. In principle, it is up to the board of directors to set the guidelines of the management contract and so, based on the size and the specifics of the co-ownership (condominium). The procedures for appointing and replacing the manager are usually outlined in the constituting act of the co-ownership. The management contract helps avoid ambiguities regarding the provided services and their financial terms; it also differentiates between basic services and additional services with the latter potentially incurring extra costs.
Formalism: a written contract is required
Although there is no section of the law requiring a written contract with the manager, it is strongly recommended that one be drafted; this document is essential to the sound management of the co-ownership because it will avoid misunderstandings on the nature of the services to be rendered as well as their financial terms and their conditions of execution. Essentially, there are two types of contractual arrangements between a syndicate of co-owners and a manager: the contract of employment and the contract for services.
Contract of employment
Some syndicates prefer hiring an employee to ensure the management of their co-ownership (self-management); thus, this relationship is governed by a contract of employment in which the manager undertakes to work for a salary and under the supervision or the control of the board of directors.
Contract for services
Under a contract for services, the manager or his company undertakes to supply services to the syndicate in return for a fee; if he is bound by a contract for services and not by a contract of employment resulting from being hired, the manager has, in principle, the free choice of the means of execution since he is not bound under a relationship of subordination. However, the syndicate is entitled to have expectations towards the manager in order to evaluate the quality of his work and of the rendered services.
To improve co-ownership management and to increase the transparency of the manager towards the syndicate, the Quebec managers and co-owners Association (Regroupement des gestionnaires et copropriétaires du Québec) (RGCQ) has created a standard contract for services designed specifically for managers and directors; this contract lists the basic services that the managers must deliver while distinguishing those that are considered as additional or supplemental services or benefits.
Services relating to the contract for services
It is the responsibility of the board of directors to specify in the contract the nature of the services; that being said, condo managers usually propose their own contracts but this doesn't mean that the content will meet all the syndicate's requirements and this is why it's important to read everything carefully and to add elements or clauses if necessary.
The management contract must also contain a description of the various basic services such as the number of weekly, monthly or annual visits to the immovable as well as the required presence of the manager at the meetings of the board of directors.
WHAT YOU SHOULD KNOW! The distinction between a contract of employment and a contract for services is fundamental; the employee is in a relationship of subordination with the employer whereas the service provider generally has the free choice of the means of execution of the contract.
WHAT TO KEEP IN MIND: In order to properly define the manager's remuneration, the terms and the conditions of the contract for services generally distinguish the basic tasks from those that are supplementary.
WARNING! The contract for services must establish a limited list of supplementary services as they involve additional remuneration.
