THE WORLD OF 3RD PARTY CONTRACTORS
• Interpreting the Condominium Act
• Condominium Authority Tribunal (CAT) Applications
• Construction Deficiency Issues
• Tarion Warranty Claims
• Litigation
• Mediation and Arbitration
• Corporate Governance
• Interpreting Declarations, By-laws, and Rules
• Co-tenancy and Joint Ownership Properties
• Enforcement Issues
• Liens / Power of Sale
• Human Rights Complaints
• Employment / Labour issues
• Financing and Loans
PROTECTING
PEOPLE’S BUILDINGS
RESERVE FUND STUDIES
PERFORMANCE AUDITS
ENVELOPE & RESTORATION CONSULTING
INVESTIGATION & TESTING
CONDITION ASSESSMENTS
KELLERENGINEERING.COM
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This publication attempts to provide the CCI Eastern Ontario (CCIEO) membership with information on condominium issues. Authors are responsible for their expressed opinions and for the authenticity of all presented facts in articles. The CCI Eastern Ontario Chapter does not necessarily endorse or approve statements of fact or opinions made in this publication and assumes no responsibility for these statements.
This publication also notifies members of the Eastern Ontario Chapter of events and services. The products and services advertised are not necessarily endorsed by the Eastern Ontario Chapter. Readers should conduct their own review of the products and services and seek legal and other professional advice on the particular issues which concern them.
Permission to reprint is hereby granted provided: 1) Notice is given by phone 613-688-0655 and/or in writing to the CCI Eastern Ontario Chapter; and 2) Proper credit is given as follows: Reprinted from CondoContact.
Copyright by CCI Eastern Ontario Chapter of the Canadian Condominium Institute. ISSN 1488-7320
Nancy Houle, LLB, DSA, LCCI President, CCI Eastern Ontario Lawyer/Avocate Davidson Houle Allen LLP
Message from the President
Ithink it is safe to say that summer flew by for the entire industry! It is hard to believe that we are moving into fall and the leaves will soon be changing colours; although, the summer weather appears to be holding on for a little bit longer. I hope that all of our members have been, and continue to, take time to relax, enjoy the outdoors, and spend quality time with family and friends.
While it is always hard to say goodbye to summer, your CCI-EO Board of Directors is looking forward to our upcoming educational events and activities. On September 20th we are hosting our much-anticipated Ottawa Conference with an amazing line of up speakers. We look forward to seeing several hundred attendees, speakers, sponsors, and industry experts all joining together to dialogue about our industry.
Our diverse panel of engineers, lawyers, property managers, and other local professionals are ready to offer comments and advice on issues facing your condominium, as well as answering any questions on your mind.
October brings in a Lunch and Learn on October 16th and our AGM, which is being held on October 30th. In addition to the AGM, stay tuned for a fun activity to be held in conjunction with our Hybrid AGM! More details to come soon! If you’re not already subscribed to our e-blasts, contact our Administrator at info@cci-easternontario. ca, and provide your email so you can stay up to date on the latest CCI-EO news.
In November, the second half of the Director’s Certificate Program will take place. Even if you’ve completed the online mandatory Director training, this is an event you won’t want to miss! The Director’s Certificate Program is comprehensive, delivered by professionals in the condominium sector, and allows you to ask any questions you have along the way.
Lastly, our 2024 Holiday Luncheon & Legal panel Discussion is coming up on December 4th. This will be an excellent opportunity to network and listen to an entertaining summary of cases that are challenging to believe but are all factual!
We look forward to seeing you again at our events in the fall. Until then, have a safe and happy end of summer!
2023/2024 BOARD OF DIRECTORS
PRESIDENT
NANCY HOULE, LLB, DSA, LCCI
Davidson Houle Allen LLP, Condominium Law
CO-VICE PRESIDENT
CONSTANCE HUDAK, BA Hon’s, MBA, DSA
CO-VICE PRESIDENT
NOAH JOHNSTON, BA, RCM, OLCM, LCCI
Sentinel Management Inc.
TREASURER
STEPHANIE COURNEYEA, CGA
McCay Duff & Company LLP
SECRETARY
STACEY MALCOLM
Condominium Management Group
DIRECTORS
ANDRÉE BALL, LCCI
Keller Engineering
GERRY BOURDEAU, B.Sc., MBA, RCM, PCAM, PMP
Condominium Management Group
ANNE BURGOON, BSC, RCM, OLCM, LCCI
Eastern Ontario Property Management Group
DIRECTORS (CONT’D)
MICHAEL LEWICKI, LCCI
Royal LePage Team Realty
GRAEME MACPHERSON
Gowlings WLG
JONATHAN WRIGHT, LL.B, LL.M
Elia Associates PC
Message from the Editors’
Happy back to school season everyone
NEW MEMBERS
INDIVIDUAL
John Wemekamp
Deanna Smythe
Alan Hamilton
Natalia Szubbocsev
Robert Fontaine
Cassandra Hansen
CONDO CORPORATION
OCCECC 739
GSCC 0014
OCSCC 693
OCSCC 907
As we move ahead into fall, we enter into planning mode for future projects. To that end, our newsletter this fall focuses on third party contractors.
We begin with great thoughts by James Davidson on The Liability Implications of Using an Independent Contractor. Next, Anne Burgoon provides insight into Securing a Property Manager that meets your Corporation’s needs. We then hear from Vince Bennett about the current struggles for managers and condominium’s when navigating projects and the lasting impacts of the pandemic – Let’s be Realistic!
In this Newsletter, you will also see and hear from our Board members with important updates on CCI - please be sure to check out those video messages.
Wishing everyone a healthy and productive fall season! We look forward to seeing you at our upcoming event: the Ottawa Conference (details inside)!
Cheryll and Mike
BUSINESS PARTNER
Marc Kelly, KE Building Services
Robin Macina, MeetMyCondo
Ian Richardson, Solucore Elevator Consultants
Lisa Lewicki, Praetorian Management Group
PROFESSIONAL PARTNER
Sentinel Management
Evan Lloyd
Read Jones Christoffersen Ltd.
Michael Park
Eastern Ontario Chapter
INFORMATION ROUND-UP: EDITORS’ SUMMARY
RECENT CASES:
HERE’S OUR SUMMARY OF HELPFUL WEBINARS AND OTHER RESOURCES
CCI-National Resource Centre
WEBINARS/SEMINARS TO CHECK OUT:
UPCOMING:
• September 17, 2024 – CCI Golden Horseshoe – The Life of a Condo, from Infant to Toddler – The First 2 Years After Condo Registration
• September 20, 2024 – CCI Eastern Ontario – 2024 Ottawa Fall Condominium Conference
RESOURCE CENTRE (CCI-NATIONAL):
• Capital Projects – List to Save Money – CCI Grand River
For many condos, utility bills can easily be hundreds of thousands of dollars a year. So, trimming consumption by even a few percent can save real money. But how do you go about doing it?
• A Corporation’s Governing Body – CCI London & Area Directors of a condominium corporation make up the governing body, elected by owners, to directly manage the affairs of the corporation or, more commonly, to oversee management carrying out directions as agreed upon by the board.
• Aging Condos and Shrinking Dollars – CCI Golden Horseshoe
Our buildings are aging. All of them – and condominiums are no exception. The buildings are now reaching critical milestones where large capital repairs are required, leading public sector leaders unsure how to maintain a state of good repair and condominiums unsure how to proceed.
These are just a few of the many relevant and helpful articles that you can find in the Resource Centre.
Are you curious about recent case law from across Canada? Check out Condo Cases across Canada (www.CondoCases.ca), published by Jim Davidson, exclusively for CCI members!
ALSO don’t forget the law blogs out there providing timely and relevant information related to the condominium industry.
Have you seen a webinar, article, or blog post that helped your condo or do you know someone in the condo industry that you think our readers would like to hear from? LET US KNOW AT info@cci-easternontario.ca
The Liability Implications of Using an Independent Contractor
Istart this article with the following very general statement: Someone who hires an independent contractor is not necessarily liable for the acts or omissions of the contractor. This is because vicarious liability generally does not apply to the acts or omissions of an independent contractor.
Vicarious liability is liability of one person (or organization) for the acts or omissions of another person. Vicarious liability generally applies when the person (who is vicariously liable) has a substantial level of control over the acts or omissions of the other person (who is tasked with performing a certain function).
Vicariously liability generally applies to employees and volunteers who are performing functions within the bounds of their responsibilities as employee or volunteer.
But an independent contractor generally has sufficient independence that the principles of vicariously liability don’t apply.
In one of the leading cases on point – the Supreme Court of Canada’s decision in the case of 671122 Ontario Ltd. v. Sagaz Industries Canada Inc (2001 SCC 59) –these concepts have been explained as follows:
By James Davidson, LLB, FCCI Davidson Houle Allen, LLP
At Paragraph 33 of the decision:
The most common relationship that attracts vicarious liability is that between employer and employee, formerly master and servant. This is distinguished from the relationship of an employer and independent contractor which, subject to certain limited exceptions … typically does not give rise to a claim for vicarious liability.
At Paragraph 35 of the decision:
Vicarious liability is fair in principle because the hazards of the business should be borne by the business itself; thus, it does not make sense to anchor liability on an employer for acts of an independent con-
tractor, someone who was in business on his or her own account. In addition, the employer does not have the same control over an independent contractor as over an employee to reduce accidents and intentional wrongs by efficient organization and supervision.
As noted in the above passages, there are exceptions. In particular:
Despite the general principle expressed above, someone who hires an independent contractor may be vicariously liable for the contractor’s acts or omissions if the contractor is closely supervised or controlled by the person doing the hiring (similar to the control exercised over an employee), or if the contractor is performing a particularly risky or dangerous task (so that the person doing the hiring should be expected to exercise greater control and direction in the circumstances).
To this, I would add the following: A person or organization who hires an independent contractor cannot escape contractual liability (ie. obligations under a contract to a third party), nor can the person escape statutory liability (ie. statutory obligations owed to a third party).
What does all of this mean for an Ontario condominium corporation?
I take the following example: Suppose an independent snow removal contractor, hired by a condominium corporation, causes damage to an owner’s motor vehicle (ie. a collision with the vehicle). The question is: Is the condominium corporation liable for this damage?
In my view, the answer is “very likely not”. The reasons are as follows:
1. First and foremost, the condominium corporation is not vicariously liable for the acts and omissions of the independent snow removal contractor.
2. Even so, the owner (with the damaged vehicle) might still argue that the condominium corporation is liable for damage caused by “negligent maintenance of the common elements”. But in my view the condominium corporation might well have the following counter-argument: The Courts have (in many cases) confirmed that a condo-
minium corporation’s statutory obligation is to take reasonable steps to fulfill the corporation’s repair and maintenance obligations. [In my view, this is also confirmed in Section 17 (3) of the Condominium Act.] Therefore, as long as the condominium corporation has hired a reputable snow removal contractor, I believe that the condominium corporation has acted reasonably (and has therefore fulfilled the corporation’s statutory obligation to the owners). And again: The condominium corporation is generally not vicariously liable for the actions of an independent contractor.
On the other hand, if the condominium corporation instead chooses to hire an employee (or engage a volunteer) to attend to the particular task (in this case, snow removal), the corporation would almost certainly be vicariously liable for the damage caused by the employee.
In my view, similar arguments can apply to a “slip and fall” claim, where an independent snow removal contractor has been hired to attend to snow removal (and ice control), and someone suffers harm due to a slip and fall. I think the corporation might well have an “added responsibility to reasonably supervise the contractor’s performance, and to give added direction or instruction to the contractor when necessary” (ie. if and when the contractor allows unsafe conditions to go unattended). But again, the condominium corporation would not be “automatically liable” for the acts or
omissions of a reputable contractor hired to perform maintenance on behalf of the corporation.
The other advantage of hiring an independent contractor is that the contractor should (hopefully) have liability insurance (and the contract may often include a requirement for such) and may also have an obligation (under the terms of the contract) to indemnify the condominium corporation against claims arising from the contractor’s acts or omissions. These sorts of protections are of course generally not available when dealing with an employee.
The bottom line is as follows: In some cases, it may make sense to hire an independent contractor, in order to reduce risks of liability to third parties (including owners and residents).
James Davidson is one of the founding partners of Davidson Houle Allen LLP. Jim has been practicing condominium law for over 40 years. He represents condominium corporations, their directors, owners, and insurers throughout Eastern Ontario. His experience also includes building deficiencies, shared property interests, co-ownership and construction law. Jim is proud to be an associate (ACCI) and also a fellow (FCCI) of the Canadian Condominium Institute. n
Securing a Property Management contract that meets your Corporation’s needs
Arguably one of the most important contracts for a condominium corporation is the management contract.
The company and person you hire must be a good fit with your board of directors and the varied personalities, experienced with your type of Corporation and be aligned with your principles for how you want the corporation run….and they have to be good at managing the day to day operations.
With the incredible shortage of condominium managers currently in Ontario, how do you hire and /or retain a manager that meets your needs?
By Anne Burgoon, Eastern Ontario Property Management Group
CONSIDERATIONS
1. KNOW YOUR CORPORATION.
Prior to going to tender or renewing a contract know your product. A good company will want to have the data presented to them respecting your financial situation, your reserve fund, outstanding legal matters or Tarion issues, staff, amenities, shared agreements, parking, site visits per month required, hours per month anticipated by the management company and any other unusual item that is particular to your corporation.
a) Financials: know your operating and reserve fund balances (not what is in the bank but the fund balance). Why does that matter? If you have a deficit or a low balance in either fund, that will result in additional work for the management team. Accounting will be having to be careful when checks are released, vendors will be calling for payments, and it may mean having to do special as-
sessments. All of this amounts to additional demands on the manager. Thus, the number of hours required to devote to your corporation will be greater.
b) Legal /Tarion matters: Do you have any current or anticipated legal (including CAT/ Tarion) matters? Typically, time required for such matters is not included in a management contract. Why? The time required is difficult to estimate and the matters involved are usually of a short term and will not carry forward from year to year.
c) Staff: Do you have regular staff or contracted staff? Regular staff require performance and attendance management, arrangement for relief services and managing payroll and vacation issues. There is much more time required from a management company for such oversight. On the other hand, regular and reliable onsite staff can provide great support to the manager
as well. Do you have all your employment policies in place or do they need to be created: workplace harassment and violence policies, vacation policies, health and safety committees, disciplinary process, etc. Amenities and shared agreements: Who has to manage the bookings for amenities and who manages shared facilities? Is there a separate agreement for shared facilities management?
d) Parking: Does the management company manage the visitor parking, violators, parking passes, parking leases?
e) Site visits: How often do you need the manager on site for inspections and site visits? How many inspection reports do you require each month? The answer can vary from quarterly for very small corporations to 40 hours per week for very large corporation who require a fulltime manager. Most Corporations are somewhere in between those two.
Townhome Corporations typically request bimonthly or monthly site visits, whereas high rises with staff, prefer weekly or bi monthly. If a reliable superintendent is on site, bi monthly may be all that is required. Remember, every site visit or required inspection report add
hours to the requirements of the manager and thus result in a higher cost for management services.
f) Total hours per month: How often do you have board meetings? How long are the meetings? By what date do you require the managers report and board package? (5 days pre meeting is typical). Do you book a budget meeting, by what date do you require your budget (60day before FYE is typical), pre AGM meeting, an audit approval meeting? How often do you meet with owners? Do board members or owners email the manager frequently? What percent of your owners require printed material mailed to them versus having email communication?
2. PREPARE YOUR TENDER PACKAGE.
Once you know the needs of your corporation and what you require from your manager, you can start to prepare your request for proposal (RFP). Many corporations seek assistance from legal counsel for this while others develop it on their own with some support from experienced board of director members. Whichever you choose, keep it simple, brief and focus on the important issues in the tender package. The purpose of the RFP is to reach good firms who are
interested and have the experience to manage a corporation like yours. The interview process is the place to get more into details and weed out specific items of focus. Do not get too detailed in the RFP or you may deter good firms who see that as an indication of micro managing from the get go or they will bid high anticipating additional work due to perceived micro managing from the outset.
What to include in your RFP
1. Your RFP should include the following information or requirements:
a) Name and address of your corporation, number of units, age and type of corporation
b) Date by which you require delivery of the proposal and method of delivery.
c) Start date of contract and preferred term of contract.
d) Name of a contact person during the RFP process who can answer questions.
e) General information about the board of directors. (number of board members)
f) Items that are particular to your corporation as determined in the section above under “Know your corporation”
2. Your RFP should then request the following information:
a) Details respecting the condominium management, administrative and financial services to be provided, including a sample monthly financial report and the type of software used. Other reports may also be requested such as sample manager report, owner communication, repair or open work order reports.
b) A statement about the management companies approach to enforcing compliance. It should include Their philosophy and approach to deal with non compliance
c) Details respecting the personnel who will provide services, including the specific manager and their resume along with a sample management report
d) A summary of the financial procedures and controls used by the management company.
e) Two references from similar Corporations
f) Proof of requisite licenses and insurance
g) A statement of the proposed cost for the provision of property management services.
3. COMMENT ON THE SELECTION PROCESS
Advise the bidders of the considerations given to various factors in the bidding process and whether the lowest bid is necessarily awarded the contract.
4. REQUESTED SERVICES
The list requested services that are typical of a management agreement are too numerous to include in this article. This can be obtained from your legal counsel.
Next steps
Once the submitted proposals have been received, reviewed and scored, an interview process of the top 2-3 firms should be arranged.
Generate a list of general questions to ask all candidates and then specific ones for
questions that relate to a particular proposal.
When deciding on a firm ask them how many hours they have allotted per month for their agreement. Do not ask for a per door price…this provides you with very little information as corporations of the same size vary drastically in their needs and thus management requirements. Determine if you feel that the amount is what is required to meet your corporation’s needs. Get details: Ask how many hours per month were planned for on site visits, for accounting, for maintenance, for administration, for staff oversight, payroll etc. If possible, try to find out from your current manager how many hours they and head office staff are spending on your corporation and are those hours meeting your needs? Is the issue with current management a skill issue, personality issue or simply the contract did not include sufficient hours?
[er inefficiencies, try to address them. It may also be that the manager may not be a good fit…let the management company know so they also can take corrective action. Be sure to provide constructive feedback as to why it is not a good fit so that the next assigned manager may better fit your needs.
See the board of directors and management as a team…not an Us and Them approach. If for the most part the relationship is working but just needs some tweaking, work with the manager and management company to resolve the concerns. The number of experienced and reliable managers with good back- office support is inadequate in Ontario at this time… we simply have a shortage.
Be supportive of each other as team members and set the relationship up to succeed and to last!
See the board of directors and management as a team…not an Us and Them approach. If for the most part the relationship is working but just needs some tweaking, work with the manager and management company to resolve the concerns.
Most Importantly
Enter into any agreement with the goal of making it a win-win and a long-term relationship. In the early stages check in to see how the manager is doing and if the hours deemed sufficient for the contract are in fact meeting the corporation’s needs. The workload in the first few months will always be greater so plan a 3 month check in and a 6 month check in. If hours are still trending high after 6 months, determine source and take corrective action. Maybe go from weekly site visits to twice monthly. Reduce emails to the manager by limiting board communication to communication between the president and manager only. If there are any oth-
[Anne is Vice President of Eastern Ontario Property Management Group, holds a General License in condominium management and is an RCM with the Association of Condominium Managers of Ontario (ACMO). Anne was awarded her LCCI designation with Canadian Condominium Institute (CCI) in 2023. She is actively involved as a member of CCI – Eastern Ontario Board of Directors as the co-chair of the Education Committee and currently sits as a member of the CMRAO Advisory Committee. She has written articles for Condominium Manager magazine and has been a guest speaker at ACMO/CCI sponsored conferences including the National Conference in Toronto. n
By Vincent Bennett, President, Bendale
Let’s be realistic!
It goes without saying that we’re in different ‘times’ today than we were four years ago. We would like to believe that the impacts of the pandemic are long over, however there are lasting effects that are felt tremendously in the Condominium industry.
Almost all service providers to Condominiums continue to struggle to provide service in a timely manner – or in timeframes that we were accustomed to pre-pandemic. This can create a frustrating working environment between Condominium Managers and Boards. It also has a critical impact on customer service to owners/residents. Condominium Managers are working harder today than they ever have had to and are feeling a lot of additional pressure.
Generally, we are seeing time delays in responses and action from condominium managers, auditors (accountants), lawyers, engineers, and contractors. Most of this is related to an abundance of work and a global lack of labor. It goes without saying that the Condominium Management industry is desperate for Managers, especially experienced Managers.
One of our biggest challenges is finding contractors to quote and undertake work. Regardless of the size of the project, we are having difficulty getting work done. Managers request information from contractors’ multiple times before receiving a response, a quotation, or a scheduled start date. In many cases contractors are not interested in quoting work or bidding proj-
ects. This is due to an ongoing backlog of guaranteed or previously committed work and a shortage of labor to take on new projects. Obtaining multiple prices or estimates is extremely challenging, if even possible, in many cases. This reflects poorly on Managers for two reasons:
• it appears that Managers are not doing their job (where in fact, they are working three or four times harder to get work done),
• It appears that Managers have lowered their customer service as residents experience time delays in necessary repairs.
Here are some of the key reasons that we continue to struggle with the impacts of the pandemic, primarily general contracting:
• The cost of labor overall has increased (in many cases, beyond inflation)
• The labor or ‘talent’ pool is limited and staffing shortages continue to problematic
• Service providers continue to deal with a backlog of committed work
• Service providers are becoming cautious about committing to work, especially highrisk projects
• Service providers are becoming cautious not to overextend their serviceability
• Some service providers have reduced or altered their scope, reducing the services they may have previously provided in the past
• The future of our economy (and interest rates) is uncertain
• Operating costs have skyrocketed
We cannot change the current market but there are some things that we can do to work with our managers and to help with customer service and owner satisfaction:
PROCUREMENT POLICY
Your condominium corporation may have its own procurement policy, or perhaps you’re relying on the terms of your management agreement to set the parameters around spending limits or number of required estimates / quotations. These documents are likely outdated and should be reviewed and updated to reflect the current market and its challenges, with fiduciary responsibility first and foremost. It is important to have reasonable expectations when requesting information and work through your manager.
SET EXPECTATIONS
Owners and residents may not be familiar with some of the current market issues. Boards and Managers should communicate current issues and help establish realistic expectations for two reasons
• People like to be informed, even it if isn’t welcoming news
• It should help to reduce the additional pressure on the Board and manager. Proactive communication is critical in setting expectations.
CONTRACTS
Consider longer-term contracts with preset increases. If you are currently working with a service provider where you are receiving good value for service, and more importantly have a solid working relationship with, considering extending or entering into longer term contracts. We are all aware of the crisis with winter maintenance providers - consider longer contracts with these types of services with client-favorable termination clauses. This will bring
[ly satisfied with your manager, I would encourage you to have open communication to work together to resolve issues. Management companies are faced with their own industry challenges around staffing and are becoming cautious about taking on new clients. Increases in management fees should be expected and negotiated to reflect current market and staffing demands so we can attract professionals to our wonderful industry.
If you are not completely satisfied with your manager, I would encourage you to have open communication to work together to resolve issues.
relief knowing that you have a service provider and assist with future budgeting.
CONDOMINIUM MANAGERS
Throughout the industry it is evident that there is a major shortage in condominium managers. Your condominium manager can be your greatest asset – they know your complex and they bring continuity to operating your condominium over time. There is priceless value in having a longterm relationship with your manager and management provider. These are the people and teams that work hard to make your community operate in some of the most challenging times. If you are not complete-
[Finally, please, don’t hound your manager. If you have asked them to undertake a task, they’re working on it. There are delays beyond your manager’s control – they’re working hard for you.
Vince Bennett is the President of Bendale (serving Eastern Ontario for over 36 years). Vince has been managing a vast portfolio of condominiums for over 18 years. He has served on the board of directors for ACMO, sits on the CCI-EO management advisory council, regularly contributes to CM Magazine, and is a speaker at condominium conferences. In 2018, he was the recipient of ACMO’s Manager of the Year award. n
