The field of condominium management in Quebec remains without legislative oversight, a situation that could lead to similar abuses as those recently seen in Europe. While other Canadian provinces or European countries strictly regulate this profession, Quebec still lacks a specific legislative framework for managers. This lack of regulation allows anyone to assume this role without any competency or certification criteria, exposing co-owners to significant risks. It is therefore imperative to establish rigorous regulations to protect co-owners and ensure professional and transparent management of condominium properties.
An alarming case in Europe: Fraud in Spain
A striking example comes from Spain, where several hundred co-owners were victims of a large-scale fraud. The condominium management firm Barea and Zango, based in Catalonia and managing nearly 400 co-ownerships between Barcelona and L'Hospitalet de Llobregat, has officially gone bankrupt. However, the co-owners believe that the director has disappeared with several million euros. The funds intended for the maintenance of common portions, renovation work, and payment of utility bills have vanished, leaving some co-ownerships in critical situations. For example, a co-ownership of 28 owners lost 90,000 euros, originally paid for the renovation of their building’s façade.
Complaints and financial losses for co-owners
Several co-ownerships have filed complaints, while others have opted not to, to avoid worsening their financial losses. Such a scandal could easily happen in Quebec if swift action is not taken to regulate the activities of condominium managers.
A complex activity without regulation in Quebec
The absence of a legal framework in Quebec is all the more concerning given that condominium management is a complex activity. It requires diverse skills, including real estate law, financial management, and building maintenance. Without regulation, co-owners have no specific recourse in case of poor management, which could lead to situations similar to those observed in Europe.
Fraud in co-ownership management : A striking example from Quebec
In 2012, a property manager in Quebec was permanently disbarred by the Disciplinary Council of the Quebec Order of Chartered Administrators (OAAQ) after embezzling significant amounts of money belonging to several co-ownership syndicates. This fraudulent act triggered a strong reaction within the industry, highlighting the urgent need to strengthen regulations governing the profession.
Towards legislative reform in Quebec?
The Quebec legislator has yet to show a clear interest in regulating this crucial profession. Urgent action is needed to prevent Quebec from becoming the stage for frauds similar to those observed in Catalonia, where co-owners lost not only money but also essential documents such as contracts and management records. Without legal regulation, condominium management in Quebec remains vulnerable to abuse.
Kickbacks: A problematic aspect without regulation
Another problematic aspect, without any regulation in Quebec, is the issue of kickbacks between property managers and service providers. In the absence of regulation, property managers can potentially receive financial compensation in exchange for contracts awarded to suppliers, to the detriment of co-owners. This uncontrolled practice can not only affect the quality of services but also increase costs for condominium syndicates.
For example, a property manager may choose to sign a maintenance contract with a company offering lower-quality services, simply because they receive a commission in return, leaving co-owners to pay for unsatisfactory services. Furthermore, in situations where major work is required, such as replacing the roof or renovating the façade, the manager may select the contractor offering the highest kickback, rather than the one providing the best value for money, resulting in higher costs for co-owners and lower-quality results.
In extreme cases, some managers have been found to have inflated contract prices to receive higher commissions, while passing these additional costs onto the co-owners. These practices only increase distrust toward property managers and highlight the urgency of establishing a clear regulatory framework to prevent such abuses.
The Regroupement des gestionnaires et copropriétaires du Québec (RGCQ) advocates for professionalization
For 25 years, the RGCQ has been advocating for legislative regulation of the profession to protect co-owners and ensure the quality of services provided. The RGCQ proposes the creation of an official registry of managers and the implementation of professional certifications to ensure that only qualified professionals manage condominiums.
The importance of acting quickly
Various cases, both in Quebec and elsewhere, highlight the need for stricter legislative measures in co-ownership management. The illegal activities of a few unfairly cast a shadow over honest managers who are dedicated to their clients and committed to their profession. It is crucial that their reputation remains untarnished by these isolated incidents.
To consult the decision rendered by the Ordre des administrateurs agréés du Québec (OAAQ), click here,
To consult the sanction rendered by the OAAQ, click here
Also read this article published in Argent: Administrateur de condos : Jacques F. Paquet est radié.
Montreal, October 12, 2024
