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The health of your condominium corporation comes down to one thing: the strength of your finances. Maintaining financial fitness is about more than exercising good judgment. Like any plan to stay fit, it requires thinking ahead and eliminating those activities that just aren’t good for you. Here’s what your condo board can do to improve your community’s financial health.
1. Differentiate internal responsibilities.
Removing the risk of misappropriation is at the heart of good financial management. That starts with a separation of important duties, such as recording receipts and making deposits. Look to a condominium management company that has a large enough staff to separate these functions.
2. Audit regularly.
Think of this as your regular check-up. Have a professional accountant perform a detailed analysis and prepare your annual financial statement. Remember: Your accountant isn’t just someone you talk to yearly. Good condominium management involves looping your financial professional in whenever you are faced with a decision that will have a financial impact.
3. Invest with care.
You’ll want to invest your reserve funds, but do so according to a strict, conservative strategy. Steer clear of high-risk investments, and focus on striking just the right balance of safety and liquidity. For complete details on what kind of investment activities are authorized, refer to Schedule 2 of the Condominium Property Regulation.
4. Get the right policy.
Chances are, your condominium corporation is either under insured or over insured. The right coverage includes a variety of policies: liability insurance (sometimes called an “umbrella” policy), which shields the corporation from lawsuits; directors and officers liability insurance, which protects individuals from being held personally liable for actions they make in the fulfillment of their roles; and fidelity insurance, which is there for you in case of theft. Talk to a good condominium management company. A large firm may have the kind of leverage it takes to negotiate better policies at even lower rates.
Financial fitness is an ongoing commitment, but by putting these four steps into action you’re definitely on your way. Partnering with the right condominium management company can help you develop long-term and short-term strategies that will make your corporation even stronger. To find out how, contact FirstService Residential
, Alberta’s leading residential condominium management company.