Condominium corporations in Canada are not-for-profit organizations, with a basic goal to obtain sufficient income to offset the expenditures for its operation. The Board of Directors is managing a business and this is no small responsibility. Although the task of day to day administration may be delegated, the responsibility still rests with the Board of Directors to oversee delegated duties and to take reasonable precautions to protect the financial security of the condominium corporation.
In New Brunswick, The NB Condominium Property Act, Chapter C-16.05 provides the guiding legislation for all condominium corporations in the province. Contained in the Act are the legislative requirements for approving and registering new condominiums, as well as, rules and regulations that govern condominium corporations.
In fulfilling their legislative requirements, condominium corporations are required to file financial statements with the Director of Condominiums at least 10 days before the owners’ Annual General Meeting. The financial statements must be prepared in accordance with generally accepted accounting principles. However, the size of the condominium corporation determines whether or not the financial statements must be reviewed (or audited, if required in the corporation’s By-Law).
- For condominium corporations with 11 or more units, financial statements must be reviewed/audited by a qualified professional with a CA, CGA, or CMA designation (now known collectively as CPA). The person preparing the review/audit of the financial statements cannot be an owner, director, officer, employee, or manager of the corporation. Neither can they be a partner of any of those listed above, nor anyone with an interest in a contract to which the corporation is a party. The Act states that a review engagement is sufficient for complying with its requirements. However, if a condominium corporation’s By-laws require an audit, then a audit must be completed.
- For condominium corporations with 10 or fewer units, financial statements may be completed by a capable person, itemizing assets & liabilities; income & expenses; and any other information prescribed by regulation (Subsection 21 of the Regulations). And a professionally-prepared review is not required.
All financial statements filed with the Director of Condominiums and supplied to owners must be approved by the Condominium Corporation’s Board of Directors. The signatures of 2 directors, duly authorized to sign, should appear at the foot of the balance sheet. Normally the President and Treasurer approve the financial statements.
According to Section 21(2) of the NB Act, all Condominium Corporations must keep their financial statements for at least six years after the last fiscal period. As a general rule for Condominium Corporations, all payables, receivables, payroll records, bank reconciliations, budgets, investments, reserve fund and contingency fund records should be kept as well. Condo Boards change over time and this historical data could prove useful for decision-making in the future.
Need help setting up your condo’s financial and administrative systems? Contact Condo-Link Services – we provide assistance in the initial setup of your condo corporation’s systems. We also provide training for Treasurer and Secretary duties. Call 506-455-9207 or email firstname.lastname@example.org.
New Brunswick Condominium Property Act, Chapter C-16.05