Condominium Financial Management and Accounting and for Condo Associations in Montreal
Looking for Accounting for Condo Associations service providing accurate and timely financial management solutions to ensure the success of your condo association? From bookkeeping and budgeting to financial reporting and tax preparation, we are committed to helping your association meet its financial goals and obligations.
Condo Accounting and Financial Management Services
Since November 1st, 2016, the condo financial management of the transactions performed by a condo syndicate of co-owners has become more complex.
Syndicate Accounting Done by Professionals
In fact, the financial transactions that it performs must be accounted for per fund. With these added complexities, ensure your accounting for condo associations is overseen by experts!
For example, Article 1071 of the Civil Code of Quebec imposes the creation of a contingency fund. Learn more about what is a contingency fund for condos. Condominiums must, therefore — at a minimum — account for the day-to-day operations in a general or administration fund and create a contingency fund.
FAQ
What are condo financials?
The condominium board of directors uses condo financial statements as a decision-making tool to guarantee that fees collected from co-owners are spent wisely. Condominium financial statements help to ensure that the Condominium Corporation is well-prepared for the future.
What are condo assets?
Cash flow, investments, and unpaid co-owner apartment payments are all considered assets. These capital assets, such as the concierge’s residence, are included in the assets if the condominium property organization owns them.
How do I know if my condo association is healthy?
Make contact with the condo property management company. Check for details which can be found in court filings. Also, inquire about co-owner delinquencies to determine whether the condo association is healthy; otherwise, you may be surprised while applying for a mortgage. Lenders frequently consider the condominium homeowners’ association’s financial viability as well as the financial stability of the potential co-owner.
What Is Accounting for Condo Associations?
Simply put, condo accounting is divided into three parts: collecting funds, paying expenses and managing finances. While that might seem simple, a lot goes into these accounting tasks.
Condo Strategis is a multidisciplinary team of experts specialized in assisting developers and co-ownership syndicates to meet their management objectives. Our experts can help guide you in daily administrative tasks, financial maintenance and even assist you in different condominium tasks!
We receive your request
We consult our team
We present our plan and activities
Fill out the form below, and we will contact you as soon as possible!
What is the constitution of the funds?
Although it seems simple in appearance, management by fund complicates the condominium financial management and condo accounting. In fact, it is not enough, as many imagine, to open a bank account for the contingency fund to meet the requirements of Article 1071 of the Civil Code.
The principle that drives per-fund management is the total independence of these funds from each other. In terms of accounting, this means that financial statements must be kept for each fund:
- Profit and loss account;
- Balance sheet (bank statements);
- Net assets.
Unfortunately, this independence does not prevent inter-fund transactions that can sometimes not be settled at the end of the year, especially in the case of an advance from one fund to another in the absence of liquidity.
However, the Civil Code states that the assets of the contingency fund must constantly be liquid, de facto limiting advances from the contingency fund to the other funds. Indeed, a debt receivable from the general fund does not constitute a liquid asset for the contingency fund. Learn more about the contingency fund study.
What is the constitution of the funds?
Although it seems simple in appearance, management by fund complicates the condominium financial management and condo accounting. In fact, it is not enough, as many imagine, to open a bank account for the contingency fund to meet the requirements of Article 1071 of the Civil Code.
The principle that drives per-fund management is the total independence of these funds from each other. In terms of accounting, this means that financial statements must be kept for each fund:
- Profit and loss account;
- Balance sheet (bank statements);
- Net assets.
Unfortunately, this independence does not prevent inter-fund transactions that can sometimes not be settled at the end of the year, especially in the case of an advance from one fund to another in the absence of liquidity.
However, the Civil Code states that the assets of the contingency fund must constantly be liquid, de facto limiting advances from the contingency fund to the other funds. Indeed, a debt receivable from the general fund does not constitute a liquid asset for the contingency fund. Learn more about the contingency fund study.
The Tendency is to Multiply the Funds
Many condominiums cannot resist the attractive temptation to multiply the funds to better compartmentalize the syndicate’s transactions. In this way, other, more exotic funds come to be added to the mandatory contingency fund, such as:
- The service and maintenance fund;
- The improvement fund;
- The renovation fund;
- The painting fund;
- The reserve fund;
- The self-insurance fund;
- The legal fund;
- Etc.
Certainly, this looks attractive on paper, but in reality, it complicates the accounting method even more by creating numerous calls for funds and inter-fund transactions. Besides this complexity of the accounting, which has a cost, it then becomes very complicated to explain and even understand the financial reports.
As much as possible, you should keep this as simple as possible and avoid excess funds.
The Tendency is to Multiply the Funds
Many condominiums cannot resist the attractive temptation to multiply the funds to better compartmentalize the syndicate’s transactions. In this way, other, more exotic funds come to be added to the mandatory contingency fund, such as:
- The service and maintenance fund;
- The improvement fund;
- The renovation fund;
- The painting fund;
- The reserve fund;
- The self-insurance fund;
- The legal fund;
- Etc.
Certainly, this looks attractive on paper, but in reality, it complicates the accounting method even more by creating numerous calls for funds and inter-fund transactions. Besides this complexity of the accounting, which has a cost, it then becomes very complicated to explain and even understand the financial reports.
As much as possible, you should keep this as simple as possible and avoid excess funds.
Reserves Recorded as Net Assets Can be a Good Compromise to Multiplying the Funds
Unlike a fund, there is no requirement to open a separate bank account for a reserve. The reserve is simply recorded as an asset when the surplus from the administration fund is allocated to an upcoming project. The co-owners therefore know that the reserve is constituted, and this gives a reason for being and a justification to the surplus, which could be considered excessive.
Reserves are usually constituted to cover the amount of the insurance deductible in the event of a claim and the amount of the unforeseen expenses related to one or two probable claims. In the event of a claim, the related expenses are deducted from the reserve, which is then reconstituted with a portion of the surplus.
This lets you avoid creating an insurance fund with an associated bank account in which there would be virtually no transactions.
Creating funds requires upstream thinking with the trustee to avoid incurring enormous management fees. The financial management of a condominium depends above all on the advice and experience of the trustee in the service of the condominium to avoid certain pitfalls and mistakes.
Reserves Recorded as Net Assets Can be a Good Compromise to Multiplying the Funds
Unlike a fund, there is no requirement to open a separate bank account for a reserve. The reserve is simply recorded as an asset when the surplus from the administration fund is allocated to an upcoming project. The co-owners therefore know that the reserve is constituted, and this gives a reason for being and a justification to the surplus, which could be considered excessive.
Reserves are usually constituted to cover the amount of the insurance deductible in the event of a claim and the amount of the unforeseen expenses related to one or two probable claims. In the event of a claim, the related expenses are deducted from the reserve, which is then reconstituted with a portion of the surplus.
This lets you avoid creating an insurance fund with an associated bank account in which there would be virtually no transactions.
Creating funds requires upstream thinking with the trustee to avoid incurring enormous management fees. The financial management of a condominium depends above all on the advice and experience of the trustee in the service of the condominium to avoid certain pitfalls and mistakes.
Condo Stratégis Can Help With Your Condominium Financial Management and Condo Accounting
Condo Strategis is made up of a multidisciplinary team of professionals, which are specialists in their respective fields. Their highly skilled management team will manage all paid & unpaid expenses related to condo association fees and resources for condo owners. They have been in the condo management industry for many years and will manage your condo with stability.
Simple When Executed Well
The Syndicate’s Accounting, at the Heart of the Expertise Provided by Condo Stratégis
Condo Stratégis ensures that it’s constantly up to date, i.e., by repetitively communicating with co-owners when they don’t pay in a timely manner or are late in making monthly payments and by entering all accounting bills and cheques immediately upon receipt. This allows each administrator and co-owner of having an overall and clear picture of their co-ownership property during the entire process.
The Condo Stratégis Difference
At Condo Strategis, we have the strategies to overcome even your biggest challenges. We offer competitive rates and have a team of multidisciplinary experts at your service. Contact us today!
Our partners
Discover Our Other
Condo Property Management Services in Montreal
Accredited Condominium Administrative Management Service
Regular follow-up, effective communications, constantly updated condominium register
Human Resources Management Services for Condos in Montreal
Recruitment and methodical staff follow-ups
Property Maintenance Management Services in Montreal
Weekly visits with report tracking, PGA updates, preventions
Complete Condo Syndicate of Co-Ownership Management
Enjoy the expertise of Condo Stratégis in its entirety