CCI-Toronto - Condovoice - Winter 2021

The Last Word: Having Compassion and Understanding in a Changing World The Spirit of Giving

Holiday Bonuses Should Always be Handled With Care

Window PAIN

Publication of the Toronto and Area Chapter of the Canadian Condominium Institute • WINTER 2021 • www.ccitoronto.org

Should You Refurbish or Replace, Defer or Do Now?

Your Condo Winterizing Checklist

A Timely, Helpful Manager’s Guide

Can I Pay for This From the Reserve Fund?

The Answer Isn’t Always That Simple

NEW NUISANCE LAWS SM5329_WINTER 2021.indd 1

2021-12-20 5:03 PM

SM5329_WINTER 2021.indd 2

2021-12-17 8:17 PM

CV 3

Condovoice VOLUME 26 • ISSUE # 2 • WINTER 2021

Birds of a Feather ...

In Every Issue

What Constitutes a Family?

President’s Message

BY MURRAY JOHNSON

5

Message From the Editor

BY BRIAN HORLICK

48

48 Last Word Understanding in a Changing World

BY GENE LEWIS

In This Issue

For Condo Owners 41 Window Pain

BY RYAN GRIFFITHS

7

Decisions From the Courts

BY AN NGUYEN AND TONY BUI Who is Responsible for a Condominium Corporation’s Costs?

11 Holiday Season Bonuses Should Always Be Handled With Care

BY CHRISTINA AJITH-BRANDFORD AND JUSTIN McCLARTY The Board Is the Trustee of the Condominium Unit Owners’ Money

13 Reserve-Eligible Expenditures: Can I Pay for This From the Reserve Fund?

BY WARREN KLEINER AND SALLY THOMPSON

17 Winterizing Condos: A Manager’s Checklist

BY (MS.) DENE COUSINS The Fall Season Brings an Entirely New Set of Chores and Challenges

CCI Members News & Events 37 COTY Award Presentation 38 CCI Was There 39 Word Search YOUR CONDO CONNECTION IN THE TORONTO, PEEL, YORK AND DURHAM REGIONS PROVIDING EDUCATION, INFORMATION, AWARENESS AND ACCESS TO EXPERTISE

BY AND FOR OUR MEMBERS.

www.ccitoronto.org

20 Condominium Profile: The Fairways Hits a Hole in One

BY JAMES RUSSELL

It’s Not Just the View, But the Good Governance, Plentiful Amenities, and Sense of Community That Makes Us Love The Fairways

29 The Impact of New Nuisance Laws

BY BRADLEY CHAPLICK Noise, Odour, Smoke, Vapour, Light, and Vibration (Collectively, any “Nuisance”) Can Now Proceed to CAT

33

33 Vendor Sourcing & Procurement

BY EMIEL BRIL Adding New Vendors to Your Roster CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 1

CV

1

2021-12-17 8:17 PM

SM5329_WINTER 2021.indd 2

2021-12-17 8:17 PM

Canadian Condominium Institute/ Institut canadien des condominiums Toronto & Area Chapter 1 Eglinton Ave. Toronto, ON M4P 3A1 Tel: (416) 840-5346 E-mail: info@ccitoronto.org Website: www.ccitoronto.org

President’s Message

2021-2022 Board of Directors PRESIDENT: Murray Johnson, OLCM, CCI (Hon’s), LCCI Co-Chair, Conference Committee Member, Marketing Committee Member, Tarion Sub-Committee Crossbridge Condominium Services Ltd.

There’s a Lack of Preparation for the 2030 and 2050 Paris Accord Targets

VICE-PRESIDENT: Lyndsey McNally, OLCM, LCCI Member, Legislative, Marketing, Communications Committees Chair, Social Media Sub-Committee CCI-N Liaison CWB Maxium Financial SECRETARY/TREASURER: Brian Antman, CPA, CA Chair, Finance Committee, Member, Conference Committee, Member, Communications Committee Adams & Miles LLP Chartered Accountants Board Members Francesco Deo, BA (Hons), JD Member, Legislative Committee Chair, Volunteer Resource Committee Fine & Deo Condominium Lawyers Bob Girard, B.Comm, ACCI, FCCI Member, CondoSTRENGTH Committee Member, Education Committee Member, Finance Committee YCC # 50 Brian Horlick, B.Comm., B.C.L., LL.B., ACCI, FCCI Chair, Communications Committee, Member, Conference Committee Horlick Levitt Di Lella LLP Warren Kleiner, BA., LL.B. Chair, Legislative Committee Co-Chair, Ontario Caucus Member, Marketing Committee Shibley Righton LLP Farzad Lahouti, MBA Chair, Marketing Committee, Member, CondoSTRENGTH Committee, YRCC 798) Eric Lakien, MBA, PhD. Member, CondoSTRENGTH Committee Member, Marketing Committee YRCC # 798 Connie Pappas Boccitto, CCSP Chair, CondoSTRENGTH Committee Member, Social Media Sub-Committee Royal LePage Terrequity Realty, Brokerage corp Valuations Sophia Simeone, B.Eng, EIT Member, Education Committee Member, Social Media Sub-Committee Synergy Partners Lisa Kay Member, Communications Committee KayCondoGC Inc. Stephen Ilkiw Member, Marketing Committee CondoHive / Bedford Hill Consulting OPERATIONS MANAGER - Ashley Smith

It’s Never Too Late to Start Planning and Funding for This Inevitable Change. Are You Looking Far Enough Into the Future?

As 2021 comes to a close I think we have all had enough of looking back. It’s time to start looking forward and start developing plans to make the coming years not only healthier but more successful. As of late I have been extremely concerned about reserve fund studies. This was pushed along by the Ministries going to key stake holders and entertaining new regulations for reserve fund expenditures.

All these comments have some merit but the reserve fund itself is a savings account for future replacement. We know that the carbon tax is here and will only increase, driving consumers away from carbon producing fuels. We should be asking ourselves if we will be ready to switch to an alternate fuel/heating source or are we simply deferring what could be a significant cost to future owners?

It’s my hope that the result of the current consultations will not water down the restrictions on how funds can be used but rather that initial contributions should be greater than ten percent of the declarants first year budget. There are a considerable number of improvements that can be made without opening the fund to what we currently use operating funds for.

I believe that condominiums that are not creating these Paris Accord Contingency accounts might have to insert some disclosure statement in status certificates.

After all, we know that the targets have been set. We know that Canada has committed to meeting those targets and we can surmise that savvy future potential purchasers of condominiums will want to purchase into a “green” community.

What I find particularly worrisome is the lack of preparation for the 2030 and 2050 Paris Accord targets of reducing greenhouse gas emissions (GHG). This should be a line in the reserve fund study that allows accruals for end of life replacement for alternate heating sources.

My fear is that as we near 2030 (just eight years away) and then 2050 the carbon tax on natural gas will make condominium living too expensive for first time buyers.

I’ve heard the argument that “I won’t be living here in 2030” or “How can we ask todays owners to fund something in the future that has not been costed out yet?”.

The days of calling our communities “green” simply because we use earth friendly cleaning products and reusable materials instead of disposable products are long gone. Green communities will be so much more involved with the 2030 and 2050 targets and looking at much larger steps to reduce GHG emissions. Alternate heating and cooling sources, building larger EV charging systems and using other new technologies are all so much more than just green cleaning products.

It’s never too late to start planning and – Continued on page 8 CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 3

CV

3

2021-12-17 8:17 PM

PUT OUR PASSION

INTO YOUR CONDO

4

We Specialize in Condominium Common Element Refurbishments With Design/Build or Design/Bid/Build (Tendering) Solutions

CONDOMINIUM REFURBISHMENT GENERAL CONTRACTORS

Collectively, our team has over 10 years of experience in condominium common element refurbishments and more than 40 years in high end residential and commercial/retail interior construction. Our goal is to provide our clients with timeless, fresh designs and quality workmanship, all within your budget.

www.kaycondogc.com 416.779.4846 lisa@kaycondogc.com

CV

KAYCONDO GC

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 4

2021-12-17 8:17 PM

CV

Condovoice Condovoice is published four times per year – Spring, Summer, Fall and Winter,

by Association Concepts on behalf of the Canadian Condominium Institute Toronto & Area Chapter.

EDITOR: Brian Horlick ADVERTISING: Jaclyn LaForce ART DIRECTION & DESIGN:

Atlanta Visual Communications Inc. All advertising enquiries should be directed to Seamus Gearin at (416) 840-5346 or advertising@ccitoronto.org If you are interested in writing articles for Condovoice magazine, please contact Jaclyn LaForce at (416) 840-5346 or jaclyn@ccitoronto.org. Article topics must be on issues of interest to Condominium Directors and must be informative rather than commercial in nature.

The authors, the Canadian Condominium Institute and its representatives will not be held liable in any respect whatsoever for any statement or advice contained herein. Articles should not be relied upon as a professional opinion or as an authoritative or comprehensive answer in any case. Professional advice should be obtained after discussing all particulars applicable in the specific circumstances in order to obtain an opinion or report capable of absolving condominium directors from liability [under s. 37 (3) (b) of the Condominium Act, 1998].

Authors’ views expressed in any article are not necessarily those of the Canadian Condominium Institute. All contributors are deemed to have consented to publication of any information provided by them, including business or personal contact information.

Consider supporting the advertisers and service providers referred to in this magazine, recognizing that they have been supporters of CCI Toronto.

Advertisements are paid advertising and do not imply endorsement of or any liability whatsoever on the part of CCI with respect to any product, service or statement.

Publications Mail Agreement #40047055 Return undeliverable Canadian addresses to Circulation Dept.

705 – 1 Eglinton Ave. Toronto, ON M4P 3A1

Editor’s Message

CAT Tribunal’s Jurisdiction to Include Nuisance-Related Disputes On January 1, 2022, amendments to s.

117 of the Condominium Act and Ontario Regulation 48/01 will come into effect which will include a prohibition against the carrying on of any activity resulting in the creation of an unreasonable noise, smoke, vapor, light, and vibration.

Similarly, on January 1, 2022 amendments to Ontario Regulation 179/17 will come into effect that further broaden the jurisdiction of the Condominium Authority Tribunal (the “CAT”). The effect of these amendments will be to allow disputes related to s. 117 of the Condominium Act and disputes related to provisions of a condominium corporation’s declaration, by-laws, or rules that prohibit, restrict or otherwise govern unreasonable noise, odour, smoke, vapour, light and vibration to be heard by the CAT. While nuisance-related disputes have to date been framed as a breach of the right to quiet use and enjoyment, the remedy was an expensive court application or the commencement of mediation and arbitration. By moving such disputes to the CAT, condominium owners as well as condominium corporations will now be able to access a faster and more economical forum in order to achieve a resolution.

As the CAT moves forward with its increased jurisdiction, one major area of concern relates to costs, or more to the point, legal fees. At the present time, the CAT cannot order an unsuccessful party to pay lawyer’s fees to a successful party unless there are “exceptional” circumstances. This means that unless a party’s

conduct has been unreasonable, frivolous, vexatious, or they have acted in bad faith, costs are unlikely to be awarded. This is to be contrasted with pre-litigation costs, where the CAT has ordered that unit owners pay as additional common expenses a condominium corporation’s reasonable legal fees resulting from a unit owner’s breach of the condominium corporation’s declaration, by-laws, or rules.

Courts have long supported the position that unit owners who refuse to comply with the condominium’s governing documents should be responsible for the costs of enforcement. The position is one of fairness, as clearly, other owners in the corporation should not be responsible for paying the costs incurred by a noncompliant owner, and because a condominium corporation has a positive legal obligation to ensure that all owners comply with the Condominium Act, and the declaration, by-laws, and rules.

On a positive note, it appears that the Condominium Authority of Ontario (“CAO”) is now alert to this issue. In November of 2021, the CAO sent out a survey to condominium stakeholders which included a number of questions dealing with the issue of legal fees, including what factors the CAT should consider in deciding to order one party to pay the legal fees of the other.

Nuisance-related disputes will be more complex than the early records request disputes. For example, in some cases, expert witnesses may need to be retained and reports commissioned, whether they – Continued on page 9 CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 5

CV

5

2021-12-17 8:17 PM

6

CV

CONDOVOICE FALL 2019

SM5329_WINTER 2021.indd 6

2021-12-17 8:17 PM

Ari Nguyen Gardiner Miller Arnold LLP

Tony Bui Gardiner Miller Arnold LLP

Case Law Update

Decisions From the Courts Recent Court Cases Revisit a Recurring Question in Compliance Applications – Who is Responsible for a Condominium Corporation’s Costs?

The condominium later registered a lien to recover its full legal costs for the Kitec issues and the owner’s ongoing disruptive behaviour. The owner challenged the validity of the lien arguing that it exceeded the partial costs the Court awarded.

Despite only awarding partial costs, the same judge then held that the condominium was entitled to recover its full costs through sections 134(5) of the Act or its indemnity provision in the Declaration.

The court ruled that “so long as the costs

added to the common expenses were incurred to obtain a compliance order… they are appropriate even if they exceed what is ordered”.

Takeaways: The wording of section 134(5) of the Act is key here: If a corporation obtains an award of damages or costs in an order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit and the corporation may specify a time for payment by the owner of the unit.

Determining costs under 134(5) of the Act is effectively a two-part exercise: the first part involves “obtaining an award of damages/costs from the Court (i.e., fixing costs)” and the second is the “addition of actual costs in obtaining the order”.

On the first part, costs in any legal proceeding are generally fixed by the courts after a decision is rendered – here the Court awarded the condominium its partial legal costs. But on the second part, the owner overlooked that section 134(5) of the Act and the indemnity provision allowed the condo to add “additional ac-

tual legal costs” to its lien. “Additional actual legal costs” are costs added beyond the costs fixed by the Court, even if the “additional actual legal costs” include amounts not fixed by the Court.

In essence, since the court awarded the condominium some costs under a compliance order, this opened the door for the condominium to recover its full costs as “additional actual costs” despite what the Court fixed.

However, while section 134(5) of the Act affords a corporation significant latitude to recover its full legal fees, it should not be interpreted as a guarantee or right to full legal recovery. “Additional actual costs” must still be reasonable and “incurred to obtain the compliance order” if they are to be legitimate.

MTCC 1025 v. Hui – Unit owner financially responsible for tenant’s conduct This case involved a tenant whose disturbing conduct over a span of a few short months led to the condominium to obtain a compliance order against the unit owner and tenant to comply with section 117 of the Act and a substantial cost award against them.

The tenant moved in on May 1, 2021. By CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 7

CV

ILLUSTRATION BY JASON SCHNEIDER

Evdassin – Even reduced court costs may entitle s. 134(5) “additional actual” costs In the Evdassin series, the condominium obtained a section 134 compliance order against an owner who refused to cooperate with the condominium’s Kitec removal program. In the Court’s costs decision, the judge noted that section 134 of the Act “did not interfere with the Court’s jurisdiction to fix costs in amount that is fair and reasonable in the circumstances of a particular case” nor did it “suggest that the Court should assess costs on a full indemnity basis as a matter of course”. With this in mind, the Court only awarded partial legal costs to the condominium.

7

2021-12-17 8:17 PM

President’s Message continued from page 3

mid-June, the tenant engaged in threatening and disturbing behaviour until he was arrested in early August and no longer on site. The tenant:

funding for this inevitable change. Are you looking far enough into the future?

My guess is that you have been because many engineering firms use 45 and 60 year projections when preparing a reserve fund study. This means that the study you have now most likely stretches well into the 2030 and 2050 timelines. I suggest that even if you just had a study completed, you might want to go back to your consultant and ask to include some level of funding for the end of life replacement of our heating plants to encompass and embrace a new heating source and not the same old inefficient and carbon emitting systems. Once planned for, we can then focus our attention at the GHG producing emergency generators, but that’s another article….

• Threatened a security guard with a knife; • Exposed himself and performed lewd acts in the common elements of the condominium building; • Enabled an individual to deal drugs on the condominium premises; • Attempted to force his way into a resident’s car and a contractor’s van; • Set up a chair and blocked the entrance of the building, and did not allow residents to enter; • Defaced unit doors and nearby walls; • Banged on a neighbour’s door at 1 a.m.; • Broke the window in the unit and threw his belongings out of the window.

Stay positive but test negative. C V

Murray Johnson, OLCM, CCI (Hon’s), LCCI CCI-Toronto and Area Chapter President

8

CV

The court was satisfied that the tenant breached the corporation’s declaration and rules and section 117 of the Act because his conduct caused or was likely to cause damage to property or injury to an individual, and the Occupational Health and Safety Act when misconduct was levelled at the corporation’s staff.

The court granted the condominium an order pursuant to section 134 of the Act enforcing compliance.

The unit owner cooperated with corpora-

tion once she was notified of her tenant’s behaviour by the corporation in June 2021. She delivered a N7 Notice to End the Tenancy for Causing Serious Problems in the Rental to the tenant the very next day and applied to the Landlord and Tenant Board for an urgent hearing. The owner’s request for an expedited hearing was denied and there no was no date for the eviction hearing at the time of the decision. The unit owner also agreed to pay for the cost of additional security guard to specifically monitor the tenant.

The corporation was required to incur the costs of pursuing the application. The corporation was successful and sought to recover its costs from the unit owner and tenant. The corporation’s governing documents provided that a unit owner must indemnify and save harmless the corporation against any loss, cost, damage or injury caused to the common elements or other units because of the willful or unlawful act or omission or breach of the rules by the owner or any resident or occupant of the unit.

The unit owner argued that she should not be personally liable for any cost awards, including that: (i) She fully cooperated with the corporation and took immediate steps to have the tenant evicted, but her request for an expedited hearing was denied. She also provided an undertaking to pro-

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 8

2021-12-17 8:17 PM

ceed expeditiously with the eviction hearing and paid for added security; and (ii) The application proceeding was unnecessary once the tenant was arrested, and the police advised that he was not permitted back into the building.

Editor’s Message Continued from page 5 be for noise, odour, smoke, vibrations or light. While at first blush, boards may wish to look to their managers for representation at the CAT as a costsaving measure, managers are neither trained nor licensed to carry on such representation. In this regard, boards would be well-advised to include a line item in their budgets for anticipated unrecoverable legal expenses related to CAT applications.

The court sympathized with the unit owner for cooperating with the corporation and taking steps to have the tenant removed from the unit but determined that it was unfair to the other unit owners to be responsible for the costs of the application which was required to compel the tenant to comply. The court also found that the application was necessary because there was no information before the court to show whether the tenant may be permitted to return to the building.

from her tenant.

The court awarded costs of $10,000 for the application, payable by the unit owner and tenant jointly and severally.

The unit owner in this case will likely be responsible for the entire cost award unless she can recover some of the costs

Takeaway Unit owners are ultimately responsible for their occupant’s conduct even when an owner cooperates and takes reasonable steps to obtain their tenant’s compliance. This protects other innocent

Condominium living has many benefits. However, with those benefits, comes a responsibility and an obligation to curtail, to a certain extent, in-

dividual wants and behaviours which may be a nuisance to others. While the CAT is not perfect, it does strive to be a forum for resolving disputes related to communal living in a quicker and more cost-effective way than the court system. This can only be seen as a positive step for all condominium stakeholders. C V

Brian Horlick B. Comm, BCL, L.L.B., ACCI, FCCI owners because it is not fair that other owners are responsible for one resident’s misconduct. Condominium corporations should notify owners early when there are rule violations so owners may take necessary steps to resolve the problem.

Doing so will help justify the corporation’s next enforcement C V

JCO & Associates have specialized in the refurbishment of condominium common elements since 1989.

We provide GENERAL CONTRACTING or full service DESIGN/BUILD solutions including design, budgets, reserve fund analysis, documentation and construction management. We pride ourselves in providing the highest quality of service and workmanship and bring value engineered solutions that won’t compromise your design.

Please visit our web site at www. jcoandassociates.com to view our current and past projects or contact us at 905-727-8818.

JCO is a member in good standing with ACMO (Association of Condominium Managers of Ontario), CCI (Canadian Condominium Institute), IDC (Interior Design of Canada) and TCA (Toronto Construction Association). All our work is guaranteed and can be certified by a Performance Bond issued by Zurich Insurance for performance, material and labour.

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 9

CV

9

2021-12-17 8:17 PM

10

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 10

2021-12-17 8:17 PM

Christina Ajith-Brandford Miller Thomson LLP

Justin McLarty Miller Thomson LLP

Holiday Bonuses

Bonuses Should be Handled With Care Owners Faced With a Large Special Assessment May Come Up With a Response Disproportionate to the Actual Amount of the Bonus

First, the Corporation should be on firm financial ground before deciding to hand out bonuses. While no unit owner (hopefully) wants to be a Grinch, the optics of providing bonuses when the owners are faced with a large special assessment can create a response that is disproportionate to the amount of the bonus that is actually being given out.

Second, the bonuses should be prop-

erly documented and handled like any other expenditure. This process ranges from approval of the exact amount of the bonuses in the minutes of the board meeting at which they were approved to ensuring that the bonuses are a line item in the corporation’s audited financial statements.

There are a number of other unique considerations for Directors to take into account regarding bonuses which fall into two categories: payment of bonuses to condominium employees (e.g., superintendents) and payment of bonuses to contract personnel (e.g., cleaners, security and shared facilities personnel) who are employees of the company providing the service to the condominium under contract.

Condominium Employees Bonuses paid to condominium employ-

ees should be paid through the condominium’s payroll with appropriate withholdings and the income should be reported to Canada Revenue Agency (CRA) on the employee’s annual T-4, Statement of Remuneration Paid.

Contract Personnel The best (but most difficult) way to pay bonuses to contract personnel is for the contractor to invoice the condominium for bonus amounts and for the condominium to pay that invoice. In this way, the condominium is clearly not the employer and is not responsible for withholdings or informing CRA of bonus amounts paid – those are the responsibility of the contractor. Its important to note, that under this method, the condominium may incur harmonized sales tax (HST) on the bonuses as the contractor is likely required to charge HST for services provided.

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 11

CV

ILLUSTRATION BY CLAYTON HANMER

It is only natural that a board would want to reward the concierge who has a smile for each resident every morning or the superintendent who knows the building like the back of their hand with a bonus. The board should remember, however, that they are ultimately the trustees of the unit owners’ money and the distribution of bonuses should be handled with care.

11

2021-12-17 8:17 PM

When payment to a contracting company is not feasible, payment of bonuses directly to contract personnel has implications as to whether the condominium is an employer of those personnel and therefore may have related employment liabilities. Condominiums should consult with their legal counsel (both employment and condominium lawyers) before making such payments.

Owner Contributions to Bonus Pools Condominiums occasionally address bonuses through bonus pools. Typically, a separate bank account is set up and owners make voluntary contributions as they see fit. The account may or may not be in the name of the condominium and is almost never recorded in the condominium’s accounting records. The Board, a Committee of the Board or, in more informal condominiums, a group of owners, then decide which personnel receive bonuses and how much.

We recommend that this procedure never be used as it is completely opaque.

Lists of contributing owners, of bonus

12

CV

recipients included and how much they were paid are never published. This lack of transparency can lead to allegations of favoritism and discrimination that are difficult to refute. Another allegation that is challenging to disprove is the diversion of funds, especially when cash contributions are involved, or a property manager has contributed to the bonus pool. Under no circumstances should Directors or property managers expose themselves to the possibility of such allegations.

bank accounts and reconciliations may minimize the possibility of the allegations discussed above.

Opening bank accounts authorized by the Board, whether that authorization is formal or informal and whether the bank account is in the name of the corporation, also has implications. The Board should consult with legal counsel as to whether these funds are corporate funds.

If they are corporate funds, the Board should consult with their accountant or auditors regarding how to record them in the corporation’s accounting records. The Board should also ensure that these accounts are being reconciled on a regular basis. Having authorized

We strongly recommend that professional advice (e.g., lawyers, auditors) be sought as to how to best protect the condominium and its Directors when making bonus payments to employees and/or to contract personnel.

Note that bonuses paid by condominiums directly to condominium employees or to contract personnel are employment income and there may be penalties where Directors do not ensure that withholdings are properly made and where CRA is not properly informed of bonus payments following appropriate payroll reporting procedures.

By no means is the above holiday to do (and don’t) list exhaustive, but it does provide some guidance on many of the questions condo corporations will deal with during the holiday season. Having said that, we hope you have a safe and happy holiday! C V

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 12

2021-12-17 8:17 PM

Warren Kleiner Partner Shibley Righton LLP

Sally Thompson Synergy Partners Consulting Ltd.

Ontario Condominium Act

Can I Pay for This From the Reserve Fund?

(Reserve-Eligible Expenditures)

There are several sections of the legislation and regulations that help clarify what constitutes a reserve-eligible expenditure.

Section 93 requires that reserve funds be used only for the major repair or replacement of the common elements and assets of the corporation. Section 97 addresses the Corporation’s ability to make additions, alterations or improvements to the common elements or changes to the as-

sets of the Corporation and sets out the procedure to be followed by the Corporation.

This sounds simple but is actually quite complex due to complex nuances in the language of the legislation.

Section 97 (1) says that if the corporation has the duty to repair after damage or to maintain the common elements (which includes the requirement to replace after normal wear and tear) and does so using materials “that are as reasonably close in quality to the original as is appropriate in accordance with current construction standards” then the work is deemed not to be an addition, alteration, improvement to the common elements or a change to the assets of the corporation (an “AAI”).

Section 97 (1) provides clarity when a like-for-like replacement is not possible.

For example, if you were repairing a plaster and lathe wall and did so using dry-

wall, that would be considered current construction standard. Or if you were replacing an atmospheric boiler, with a mid-efficiency boiler, that would also be considered current construction standard.

Both can be paid from reserve provided they relate to the common elements.

This is where things start to get a bit confusing. Section 97(2) indicates that the board may make an AAI without notice to the owners if the AAI is being made to comply with legislation, if, in the opinion of the board, the AAI is necessary to ensure safety and security, or if the cost, in any month is no more than the greater of $1,000 or 1% of the annual budgeted common expenses for the current fiscal year. It is important to note that this section tells a board that they can make an AAI without notifying the owners, but the work remains an AAI. As such, it is not clear that an AAI constitutes a major repair or replacement that may be paid for from the reserve fund.

Many in the industry misinterpret this CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 13

CV

ILLUSTRATION BY JASON SCHNEIDER

The board of directors of an Ontario condominium has the authority to pay for work using reserve funds without the consent of the unit owners. This feature of the Ontario Condominium Act recognizes that reserve fund expenditures are generally necessary for the upkeep of the common elements and should therefore not be subject to the whim of the owners.

But, as we know, with great power comes great responsibility. It is important that boards only use reserve funds for expenditures which are reserve fund eligible.

13

2021-12-17 8:17 PM

section, deciding that if notification of the owners and/or consent of the owners is not required, then the project is reserve eligible. However, AAIs are not allowed to be paid for from reserve, per section 93, which is limited to major repair and replacement.

The rest of section 97 explains the requirements to notify the owners or obtain the consent of the owners for any AAI that are not captured by 97 (2). If the estimated cost of the AAI is greater than 10% of the annual budgeted common expenses for the current fiscal year, then consent by a vote of the owners who own 66 and 2/3% of the units in the corporation must be obtained. If is the estimated cost is less than 10%, but not captured by 97(2), then the owners must be notified of the intended AAI and be given the opportunity to requisition a meeting of the owners to vote on the proposed AAI.

Providing highest standards in property management.

Our professional team is committed to exceptional services for our clients.

Growing your investments, maintaning a postive rapport with Owners and the Board of directors is our mission.

So, if a corporation decides to add a tennis court, when there was none originally, this is clearly an AAI, and will almost always fall into the category of section 97 that requires notice to the owners giving them the right to requisition a meeting or obtaining the consent of 66 and 2/3% of the owners (depending on the cost relative to the annual budgeted common expenses). Even if approved, the cost cannot be charged to reserve.

CV

Let’s look at areas where questions arise: Replacement that includes an AAI What about a replacement where the replacement is better than the existing but is not current construction standard? For example, if a board decided to replace an asphalt-shingled roof with a sheet metal roof? In this case the roof is a replacement, but the material chosen would not necessarily be considered current construction standard given that most new condos with sloped roofs have asphalt shingles.

What dollar value should be used when considering the requirements of section 97?

The total cost of the project?

Or the incremental cost of the metal roof over the shingled roof?

If the estimated cost of the AAI is greater than 10% of the annual budgeted common expenses for the current fiscal year, then consent by a vote of the owners who own 66 and 2/3% of the units in the corporation must be obtained

There is case law where a corporation has charged work to a reserve fund that an owner or group of owners did not think was reserve-eligible. The general principal from the courts is that section 97 (1) of the Act allows the Corporation to make reasonable modernizations to the common elements, in addition to complying with current construction standards. Nevertheless, these disputes can result in lengthy litigation and onerous legal costs. Even if the decision is eventually found to be correct by the courts, the related costs, in terms 14

of legal costs, time and aggravation, are well worth seeking to avoid. It is best, when there is any doubt, to seek a legal opinion from the Corporation’s solicitors.

The Act does not provide clarification on this point, but there is case law that relates to a corporation making changes to a service provided to the owners pursuant to section 97 in which the court found that it is the incremental cost of the making the change in service that must be considered for purposes of section 97. This is consistent with industry consensus that the incremental cost of an AAI over the cost to repair or replace the existing item with like-for-like, should be used when interpreting section 97, and that the incremental cost (perhaps over and above the amount the reserve fund study predicted for the asphalt shingles, or perhaps, tendered as an option) should be paid from the operating budget/surplus or a special assessment.

Repair after damage What about repair to the building after an insurable event like a flood? What can a corporation elect to charge to the reserve fund?

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 14

2021-12-17 8:17 PM

Repair after damage caused by an insured peril is, in the authors’ view, not intended by the Act to be paid for from reserve, but rather through insurance, so this is an issue that requires more attention than it has been facing. In the authors’ opinion, the insured portion of the cost of repair after damage should not be a reserve fund charge, but there is nothing in the Act to prohibit using reserve funds for repair or replacement after damage. This is the basis upon which some corporations elect to charge the deductible or full cost of the repair to the reserve fund.

Historically, with insurance deductibles in the range of $10,000, charging the deductible to reserve seldom had a material impact to the reserve fund, so was typically not flagged by auditors or reserve fund planners. But these days, deductibles of $50,000 to $500,000 are becoming more common. In the worst cases, there are several insurable events each year. Costs of this size can seriously deplete a reserve fund, leaving insufficient funds to cover planned major repairs and replacements and shifting financial burden onto future owners.

Further, many corporations are choosing to self-insure, even if a claim exceeds the deductible, to avoid driving up their insurance premiums or risking not being able to obtain insurance. This further erodes the reserve fund.

The methodology currently used to determine reserve fund contributions does not include planning for costs related to insurable events, whether the cost of the repair or the deductible portion.

Corporations should consider setting a policy regarding whether or not they will charge these costs to the reserve fund.

Ideally, corporations should pay these costs either from an operating surplus, a fund set aside for such costs, or a special assessment. Creating a special fund that holds one- or two-times deductible seems a prudent course of action, particularly for a corporation burdened with a very high deductible.

If a corporation wishes to charge these costs to the reserve fund, it should seek

legal advice and also notify the reserve fund study provider so they can include a periodic allowance intended to cover the cost. Depending on the corporation’s history, this might be one deductible every one year, or one every five years. Alternately, a minimum balance greater than one times the deductible could be used; noting that this would need to be set high enough to cover the deductible risk over the three years between studies plus other risks to the reserve fund such as budget overruns or unexpected work.

As the reserve fund is limited to the common elements, costs related to the standard unit repair should never be charge to reserve. This may require the corporation to obtain detailed invoices from contractors splitting out repair to the units from repairs to the common elements.

should not be charged to reserve.

The second interpretation is that the corporation has a duty to install the charging equipment, and that charging equipment is now current construction standard in new buildings, which pursuant to section 97 (1) there may be some justification for using reserve funds. However, it is not in fact a current construction standard as even today the vast majority of parking units are constructed without electric vehicle charging capabilities.

In the authors’ opinions, this interpretation also neglects to consider whether or not the expenditure is a major repair or replacement, which it is not.

As the reserve fund is limited to the common elements, costs related to the standard unit repair should never be charge to reserve. This may require the corporation to obtain detailed invoices from contractors splitting out repair to the units

Installation of EV Charging Equipment Corporations have a duty to allow for the installation of EV charging equipment upon the request of a unit owner, and have the right to install EV chargers on the common elements, in accordance with section 24.2 to 24.7 of O.Reg. 48. Typically, a unit owner who wants to install an EV charger pays for its installation, including the cabling to a dedicated electrical distribution panel installed by the Corporation. So, can the cost of the new dedicated electrical distributions panels and modifications to the main switchgear, and the cost of the EV charger and cabling if being installed by the Corporation on the common elements, be charged to the reserve fund?

There are two schools of though on electric vehicle charging.

The first interpretation is that this is clearly an addition, alteration or improvement to the building and therefore not a major repair or replacement (because this charging equipment did not exist previously). As such this cost

If a corporation wishes to use reserve funds to install electric vehicle charging equipment, they would be wise to obtain a legal opinion from the corporation’s counsel prior to proceeding.

Once the electric vehicle charging equipment is installed by the corporation, the corporation can use reserve funds for its future major repair and replacement.

Installation of Additional Security Cameras Adding additional cameras to an existing CCTV system is captured under section 97 (2) because it would be being done to improve safety and security. Therefore, it does not require the consent or notification of the owners. Next question is, can it be paid for from reserve?

Once again, there are two opinions on this matter. The first is that this is an addition, alteration or improvement and should not be paid for from reserve. The second is that cameras would only be being added to the system because it has been found to be deficient and it could therefore be argued that the CCTV system is being “repaired”.

While the second opinion may be more palatable to the board, because it allows CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 15

CV

15

2021-12-17 8:17 PM

them to access reserve funds, this is again depleting the fund for an unplanned cost.

It is the authors’ view that the initial installation of additional cameras is an operating expense. However, replacing existing black and white security cameras with infrared colour security cameras, would likely be considered current construction standard and therefore reserve-eligible.

If a corporation wants to use reserve funds to install new security equipment, it should obtain a legal opinion. In addition, whenever expenditures are made from a reserve fund that were not anticipated in the reserve fund study, consideration should be given as to the potential impact on the reserve fund and whether or not the expenditure would deplete the fund to such a degree that it could jeopardize funding other planned work.

16

CV

Some costs fall into a grey area and boards must decide if they can be charged to the reserve fund. If there is any doubt, corporations should seek a legal opinion before charging the expense to the reserve fund

Compliance with legislation AAIs made by the Corporation to the common elements to comply with any legislation or regulations, are AAIs that can be made without prior notice to the owners pursuant to section 97. This would typically include, but is not limited to, work to comply with changes to the Fire Code, or taking steps to comply with the Ontario Human Rights Code, for example to make a portion of the common elements accessible to persons with disabilities.

However, there is no authorization under the Act to use reserve funds for these expenditures. The initial expenditure would be considered an operating expense, but future related major repairs and replacements can be paid form the reserve fund.

Conclusion Many Ontario Condominiums already struggle to adequately fund their reserve funds. Care should be taken to minimize using reserve funds to cover costs that are not reserve-eligible and have not been planned.

Some costs fall into a grey area and boards must decide if they can be charged to the reserve fund. If there is any doubt, corporations should seek a legal opinion before charging the expense to the reserve fund.

Where the expenditure is material to the fund, they should also seek an opinion from their reserve fund study provider, ideally, before incurring the expense. Knowing if the expenditure can be paid from the reserve fund may inform the board’s decision with respect to the work, including the extent of the work, phasing of the work and how it will pay for the work. For example, there may be a need for an increase in common expenses and/or a special assessment if the work must be paid from operating. In addition, while there is a cost to obtaining a legal opinion, it is far less than the potential costs likely to be incurred if a unit owner elects to litigate regarding the suitability of the expenditure from the reserve fund. C V

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 16

2021-12-17 8:17 PM

(Ms.) Dene Cousins, RCM Senior Property Manager FirstService Residential

Making a List, Checking it Twice

Winterizing Condos: A Manager’s Checklist The Fall Season Brings an Entire New Set of Chores and Challenges for all Property Managers

if you’re a seasoned manager, you likely have most of your fall chores done… but here’s a checklist just to be sure you’ve got it covered and can safely book that week at the time-share in Boca…

Where to start with the checklist?

Changeover from Cooling to heating – the Great Debate Dear Condo Guru: It happens every fall and spring ... The people on the sunny side of my building are too hot... the people on the shady side are too cold...

Everyone thinks I’m doing this on purpose... please send help... I’d love to change their life with the flick of a switch but there’s a little more to it than that!

Picking the dates seems to get more difficult every year. Climate change is happening, creating unpredictable swings in temperature from one day to the next. Historical change-over dates are not necessarily relevant. The scientific approach is to rely on weather forecasts and set the dates based on average low nighttime temperatures. But this year that was an up and down number for weeks. Some buildings even survey residents for their opinions. My advice is to take a personal approach with a survey that includes owners in suites in key locations (sunny side, shady side, on the top, mid and low floors), consult the HVAC contractor for each building, suggest dates to your board and announce it to owners and residents. And be polite

when you respond to those nasty emails.

Now – the site itself. I have included suggestions for both multi-storey and townhouse properties.

Let’s take it from the top.

Roof top mechanical installations: Confirm that the contractor has properly shut down the chiller and drained it and/ or the cooling tower…and inspected the make- up air unit and mechanical bunkhouse structure for deterioration of the exterior or the caulking at the base.

The Roof(s): Depending on the age of the roof and your location, there are probably vulnerable areas. Have a contractor check the surface for cracks in the membrane for flat roofs… caulking around the roof vents and skylights… plants taking hold as a result of seeds landing on the roof CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 17

CV

ILLUSTRATION BY TOMIO NITTO

So… here you are finally breathing a sigh of relief. All the summer chores are done – window washing, garage cleaning, landscape upgrades, painting, roofs, eaves, caulking –YES!... all those labour intensive outside repairs done and dusted for another year… and NOW the fall season brings an entire new set of chores and challenges for all property managers…

17

2021-12-17 8:17 PM

sure all stairwells are free of debris and/ or leaves.

Climate change is happening, creating unpredictable swings in temperature from one day to the next. Historical change-over dates are not necessarily relevant over the summer and loose or cracked shingles on peaked roofs. During the inspection the contractor should also identify and remedy any areas that present the potential for ice damming.

Irrigation: Have the system drained and confirm that piping and heads are dry.

Eavestroughs and downspouts: Have these checked to confirm that connections are secure and that they are free of debris – leaves are a likely nuisance if you have trees on your site.

Fencing and railings: These should be inspected to make sure there are no loose or broken sections and repaired before wintry conditions arrive.

Make a note if you determine that you will need to schedule painting in the spring.

Speaking of trees: Check for any trees or dead limbs that should be removed. Shrubs should be trimmed and gardens cleaned out.

Exterior doors, stairs and stairwells: Check for any cracks or damaged areas on cement stairs or if slats and supports need repair on wooden stairways. Make

18

CV

Check that all exterior doors open and close properly and that all locks are in good working order.

Outdoor pools: Whirlpools should be closed down and covered. Post signs advising that these amenities are closed for the season. Diarize the start-up date in your annual plan.

Playgrounds: If these are kept open, make sure the equipment is in perfect condition and have any deficiencies repaired immediately.

Roof terraces: Close down and remove seasonal furniture - or if the area is left open, have cushions etc. removed and stored. Hoses or hose bibs should be drained and signs should be posted warning residents and visitors to use caution in winter conditions.

Canopies: These should be inspected and repaired

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 18

2021-12-17 8:17 PM

or removed if there are cracks in permanent structures, tears in awnings and/or loose fasteners.

Windows: Whether old or new, the caulking on windows is always vulnerable and prone to leaks either due to age or workmanship.

Now is the time to mobilize exterior staging to re-seal windows in localized units or consider an entire elevation. Top floor corner units are particularly vulnerable.

Exterior building envelope: An inspection and infrared scan will identify cracks in stucco, missing mortar between bricks and/or white staining indicating efflorescence from water seeping into the cladding.

Garages and driveways: Activate and check ramp heaters and timers…also, check heat tracers in pipes and the sprinkler system. Diarize the date to turn heaters off in the spring.

Garage doors: Have your contractor check pulleys, cables and chains to prevent breakdowns.

Sidewalks: Do an inspection to see if the cement slabs are even and crack free. This will prevent slip and fall accidents and prevent damage when the walkways are cleared of snow.

Exterior winter maintenance: Review protocols for site staff and contractors. Ensure that there is an adequate supply of ice melt. Review and provide a schedule and log for applications of ice melt and snow clearing. Check that there are shovels for regular or emergency use and that the

Take a personal approach with a survey that includes owners in suites in key locations (sunny side, shady side, on the top, mid and low floors) snow blower or tractor /snowplow equipment is ready for use. Check the fuel supply and electrical cords and extensions.

and the after- hours and emergency contact numbers for contractors and confirm they are up to date.

Signage: Post warnings in areas that may be slippery during bad weather.

Administration: If you have site staff, contract workers or employees – now might be a good time to schedule a meeting.

Catchbasins: These should be inspected and cleaned…

Check that sump pumps are operational.

Hose bibs: Winterize connections in common areas and advise owners who have connections on their balconies or terraces to check theirs.

Exterior lighting: Check to make sure all fixtures and lamps are working and that there are no bulbs out or broken. Check that timers are set appropriately.

Generator: Review the scheduling on inspections – monthly and\or semi-annual and check that fuel is topped up.

Contact information: Check the Building Information Sheet

Communication: You can never do enough...

Suggest a board and staff luncheon to your board members. While there – initiate a little pep talk to reinforce the need to work together – managers, security and/ or concierge, superintendent, cleaners etc.

Follow up with a walk around with as many of them, individually if possible.

You will almost certainly be told about issues you did not know about or thought were resolved.

Post notices…write a newsletter… send mass communications … tell the world what you are doing to get ready for winter.

(Maybe leave out the part about Boca…)

Now we can sit back and enjoy.

(Until we have to start planning for spring…) C V

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 19

CV

19

2021-12-17 8:17 PM

James Russell Newsletters et Cetera

THE FAIRWAYS, PCC 199 Condominium of the Year Award Winner

Precious | ‘preSHes |: adjective – 1. Greatly loved or treasured by someone.

That The Fairways has won CCI’s prestigious Condominium of the Year Award would come as no surprise to Arthur Carson McMaster.

In 1925, the year Mr. McMaster purchased an English Tudor Manor style home on land that would someday become The Fairways, he named his summer house ‘Alannah’ or ‘Precious’ in German.

THE FAIRWAYS HITS A

HOLE IN ONE!

The Board, staff and residents share Anne’s love of The Fairways, not only for the view, but the consistent good governance, plentiful amenities, and sense of community that they have come to treasure. • Perched on six acres and bounded by the Toronto Golf Club on the north-east and the Lakeview Golf Course on the south-west, The Fairway’s name was inspired by its proximity to those two championship courses and perhaps a nod to the numerous residents who, like the Board’s president Mike Read, are committed ‘medalists’ with not a ‘duffer’ among them.

20

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 20

2021-12-17 8:17 PM

The Fairways Board of Directors Allan Bishop

Board Member

Anne Wouters Board Member

Ed Heide

Board Member

Mike Read

President

Monica Bell Treasurer

PHOTOGRAPHY BY JEFF KIRK CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 21

CV

21

2021-12-17 8:17 PM

The Fairways, consisting of two towers, each with a mix of one, two and threebedroom suites, gently rises twenty-two storeys into the Mississauga sky. The top two floors of the towers house a total of eleven two-level penthouses, six graced with rooftop terraces.

“It’s a very enjoyable place to live,” says resident and former Board member Gunter Schroder.

The Fairways grounds, a lush oasis of manicured lawns and scores of towering, leafy trees include a splash pad, an outdoor pool, tennis and shuffleboard courts, whirlpool, tropical fishpond, gatehouse, cobblestone pathways and scores of mature trees. The McMaster House, located on the grounds and a few feet from The Fairway’s front door hosts events, weddings and private functions.

Its luxurious interior remains fully fur-

ABSOLUTE’S INNOVATIVE AND HUGELY SUCCESSFUL BOARD ADVISORY COMMITTEE

22

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 22

2021-12-17 8:17 PM

THE FAIRWAYS HITS A

HOLE IN ONE!

Inside, The Fairway’s amenities include an in-house hair stylist and esthetician, dry cleaning service, crafts room, gym, an impressive library maintained by a visiting librarian, and a workshop equipped with wood working, crafting and construction tools, and supplies. nished since its last resident, Margretta McMaster, a relative of Arthur, passed away in 1968.

“What really differentiates The Fairways is the fact that we don’t just live in our units. We live in the entire building, the entire grounds. We have phenomenal common spaces,” says one Board member.

Inside, The Fairway’s amenities include an in-house hair stylist and esthetician, dry cleaning service, crafts room, gym, an impressive library maintained by a visiting librarian, and a workshop equipped with wood working, crafting and construction tools, and supplies.

The Fairways’ active Finance, Landscape and Infrastructure committees are essential to the Board’s success in creating and maintaining the corporation’s financial health and sense of community.

Their tireless Social Committee, made up of residents Linda Bridgewater, Alex Stewart, Joan Read, Marie Kennedy, Pat Everitt and Sam Barnes organised and staffed more than forty social events in 2019, including concert piano recitals, BBQs, Christmas tree concerts, rock and roll dances, cabaret evenings, bridge/euchre groups, shuffleboard league, bingo, Irish pub night, strawberry social, mimosa mornings and monthly coffee get togethers. Their Welcoming Committee, paused in 2020, provided new residents with a friendly-greeting and orientation to The Fairways amenities and extensive grounds.

“The strong social influence creates a CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 23

CV

23

2021-12-17 8:17 PM

THE FAIRWAYS HITS A

HOLE IN ONE!

Perched on six acres and bounded by the Toronto Golf Club on the north-east and the Lakeview Golf Course on the south-west, The Fairway’s name was inspired by its proximity to those two championship courses and perhaps a nod to the numerous residents who, like the Board’s president Mike Read, are committed ‘medalists’ with not a ‘duffer’ among them

24

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 24

2021-12-17 8:17 PM

path for everyone living at The Fairways to come together as a community. With many friendships made along the way,” Says Maria French, Board member and Social Committee representative. Maria, a ten-year resident of The Fairways, is the Board’s newest member.

Back in 2003, residents formed the Creative Crew. Since then, the Crew has met weekly to donate their considerable sewing, knitting, and crocheting skills while other members of the Crew cut patterns, iron, or donate much needed supplies.

Working as a fine-tuned team, last year

the Crew created more than a thousand Christmas boxes for seniors and young families who otherwise would have experienced a stark holiday season. A letter to The Fairways from Joel A. Binner, Director of The Salvation Army’s Community and Family Services said in part, “your latest donations of boxes filled with colourful crocheted blankets was most appreciated.”

Although The Fairways has a sizable golfing community of residents, it’s not just the clatter of Drivers and Putters that fills the hallways. The gently flow-

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 25

CV

25

2021-12-17 8:17 PM

THE FAIRWAYS HITS A

HOLE IN ONE!

The staff at The Fairways agree. “It’s how much residents and owners engage and care for each other,” says Lilian Kangu, Office Administrator who’s been at The Fairways more than seven years. “The Fairways continues to uphold traditional values like maintaining courtesy and respect,” adds Brian Fisher, Maintenance Technician at The Fairways for fourteen years

Working under management are The Fairways’ two full time maintenance technicians, a full-time superintendent, a full-time front desk receptionist and three parttime librarians. Contracted staff include two full-time cleaners, their 24/7 gatehouse security team and an office administrator.

ing notes from two grand pianos suffuses The Fairways with melodies. Both pianos were donated by residents, and both are played often to the delight of residents attending The Fairways’ concert recitals.

Not surprisingly, The Fairways’ residents love of music extends beyond the walls of their building. Every year the residents donate money to the University of Toronto’s Faculty of Music’s Scholarship and Awards Committee. This year’s scholarship was awarded to UofT student Jing Yi (Tina) Jia. Much of the climate of caring, community and philanthropy can be attributed to the leadership and effective fiscal management 26

CV

Maria French, Board Member

Delia Lourenco and Brian Fisher, Maintenance Technician

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 26

2021-12-17 8:17 PM

of The Fairway’s seven-member Board of Directors, made up of Allan Bishop, Secretary and Treasurer; Anne Wouters, Vice-President and Amenities; Ed Heide, Health/Safety/Environmental; Monica Bell, Communications and Landscaping; Maria French, Social; Craig Bradbrook, Infrastructure; and Mike Read, President.

The Board is single minded in its commitment to the residents, staff and the community they call ‘home’.

“Our biggest challenges have been projects and the financial consequences of those,” says the Board’s Secretary and Treasurer Allan Bishop, commenting on the need for ongoing repairs given the age of their buildings, “We’ve have many very large projects that we’ve had to engage in, as well as a number of medium and small projects that we’ve had to engage in over a number of years and still maintained the integrity of the reserve fund.”

Victoria Jablonski, The Fairways’ Condominium Manager and a veteran of the industry, adds, “The Directors are all exceptional in their communication. They take accountability, ownership and pride of their individual portfolios and support the team collaboratively and flexibly. Residents are listened to, concerns are followed up on, and we’re always looking for ways to improve efficiency and approach. I believe that Fairways’ success is largely attributable to clear/transparent communication, and strong leadership.”

The Board and management communicate primarily through e-blasts and delivery of hard copies to those residents who lack email. There are also cork notice boards in their laundry rooms and electronic boards in the elevators and lobby. The Fairways’ Newsletter, their full-colour flyer, is distributed twice monthly and features community updates and quarterly financial information packages. Virtual town hall meetings and The Fairways’ resident portal are employed extensively by the Board

and management as additional communication vehicles.

and capital expense. Recently The Fairways has:

Victoria came to The Fairways in 2020 with fifteen-years of industry experience having worked her way up from security guard to Condominium Manager. The Fairway is her fourth managerial posting. Working under management are The Fairways’ two full time maintenance technicians, a full-time superintendent, a full-time front desk receptionist and three part-time librarians. Contracted staff include two full-time cleaners, their 24/7 gatehouse security team and an office administrator.

• Replaced their roof deck • Rejuvenated their lobby, fishpond and cobblestone driveway • Begun applying a new coating to the two tower’s brick facings • Replaced their badminton court with a putting green • Replaced their makeup air units with the assistance of a crane • Repaired the garage slabs and painted • Completed repairs to the fire system • Resurfaced their tennis court • And much more

“The Fairways is a tightly knit community,” Victoria adds, “and everyone here truly cares for and supports each other. It’s unique in this way, and I believe this positive communal energy is a draw to many of the residents who move here.”

Ever aware of The Fairways’ environmental impact, upcoming projects include a solar initiative, the installation of electronic vehicle charging stations and LED retrofits. Partnering with a local landscaping firm, the Board and management are well into their ten-year tree care and maintenance plan.

The staff at The Fairways agree. “It’s how much residents and owners engage and care for each other,” says Lilian Kangu, Office Administrator who’s been at The Fairways more than seven years. “The Fairways continues to uphold traditional values like maintaining courtesy and respect,” adds Brian Fisher, Maintenance Technician at The Fairways for fourteen years.

As with any 42-year-old building, maintenance is a weighty budgetary line-item

In an industry where it is easy for a condominium corporation to land in the ‘cabbage’ the Board, management, and residents of The Fairways ‘Eagle’ time and time again to sustain their ‘A-Game’ and thus remain ‘in the zone’. Or, translated for us non-golfers, Mr. McMaster and his cottage ‘Precious’ would be thoroughly impressed by the unwavering success of their good neighbour, The Fairways. C V CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 27

CV

27

2021-12-17 8:17 PM

28

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 28

2021-12-17 8:17 PM

Bradley Chaplick Horlick Levitt Di Lella LLP

Cover Story

The Hidden Impact of New Nuisance Laws Disputes Related to Noise, Odour, Smoke, Vapour, Light, and Vibration (Collectively, any “Nuisance”) Can Now Proceed to CAT

4. best practices for compliance and concluding remarks.

Secondly, subsection 117(2) of the Condominium Act, 1998 (the “Act”) comes into force, which prohibits any conduct or activity in any unit or on the common elements that results in an unreasonably disturbing nuisance.

PART ONE The Hidden Impact on Condominium Corporations An important, and overlooked, aspect of the new subsection 117(2) of the Act is that it also applies to condominium corporations’ activities, not just the nuisancecreated conduct of residents and their invitees.

This article discusses: 1. the hidden impact of the new subsection 117(2) of the Act on condominium corporations; 2. whether CAT has jurisdiction over disputes involving tenants in residential condominium buildings; 3. recent condominium “nuisance” case law;

Previously, a unit owner complaining about a nuisance from a common element source would have to prove that the nuisance was the result of a failure to maintain and repair the common elements or was “oppressive”.

Owners were rarely successful in these claims because all the condominium corporation had to do to succeed in court

was demonstrate that it was following a normal maintenance and repair program, and that it had acted reasonably, even if the problem had not been solved, or took many years to fix.

Condominium corporations tended to succeed even in cases where appropriate repairs or replacement of common elements that could have solved the problem were delayed, sometimes for years, because of limited available funds, or other maintenance and repair priorities.

Under the new legislation, owners will no longer have to prove that a nuisance is oppressive or the result of poor maintenance. Instead, it will likely be sufficient to prove that a nuisance exists and that a condominium corporation has not adequately discharged its positive obligation to rectify it.

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 29

CV

ILLUSTRATION BY JAMIE BENNET

On January 1, 2022, two related amendments to the Condominium Act, 1998 take effect.

Firstly, the Condominium Authority Tribunal’s (“CAT”) jurisdiction is expanded so that disputes between condominium corporations and unit owners relating to noise, odour, smoke, vapour, light, and vibration (collectively, any “nuisance”) now proceed to CAT, rather than to court or to private mediation and arbitration.

29

2021-12-17 8:17 PM

30

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 30

2021-12-17 8:17 PM

A unit owner who has a dispute with his or her own tenant remains under the jurisdiction of the Landlord and Tenant Board, not CAT The result is that condominium corporations may no longer have the same discretion that they once had to delay repairs because of other priorities in the building if that delay now results in a nuisance to any occupant.

PART TWO Do Tenants and Other Non-Owners Have the Right to Commence a CAT Application Due to Nuisance?

No. Aside from rare exceptions, only condominium corporations and unit owners have the right to commence a CAT application. That said, the tribunal may add a tenant or other unit occupant as a party to a proceeding and make a compliance order against a tenant in appropriate circumstances. Unit owners and condominium corporations can also name a tenant or other non-owner occupant as a responding party to a CAT application and seek a compliance order, monetary damages, and legal costs against non-owners.

A unit owner who has a dispute with his or her own tenant remains under the jurisdiction of the Landlord and Tenant Board, not CAT. Similarly, a tenant who is experiencing excessive noise or other nuisance may commence proceedings against his or her landlord at the Landlord and Tenant Board, and does not have the right to commence proceedings directly against the condominium corporation or other unit owners at CAT. PART THREE Recent Nuisance Case Law: Zaman and Mohamoud The Zaman and Mohamoud cases demonstrate a condominium corporation’s duty to properly respond to complaints about noise and other forms of nuisance, but these cases were decided under the old rules. As of January 1, 2022, condominium corporations may be held to a higher standard of care based on the new legal duties in subsection 117(2) of the Act.

In Zaman v. TSCC 1643, 2020 ONSC 1262, a unit owner commenced a court application against her condominium corporation due to alleged excessive noise being created by a neighbouring resident, especially late at night. Ms. Zaman claimed that the steps taken by the condominium to attempt to resolve the problem were insufficient, and therefore oppressive.

The Zaman case is precisely the type of dispute that would now proceed to CAT, rather than court.

The court in Zaman found that the condominium corporation ought to have done more to “escalate” Ms. Zaman’s complaints, including by “putting economic pressure on the neighbour for her to behave more appropriately late at night, such as by charging her for the condominium’s legal fees associated with the complaints.”

The court’s recommendation to use legal fees as a form of penalty for compelling compliance with the rules is consistent with industry norms where there is an appropriate indemnification clause in the condominium’s governing documents.

Other recent CAT cases relating to pets have similarly upheld pre-litigation legal expense chargebacks for letters sent to unit owners and tenants resulting from a breach of the corporation’s rules.

The court also stated that it was wrong for the condominium to refuse to disclose to Ms. Zaman the details of a written settlement agreement with her neighbour who was creating the noise.

However, the court ultimately applied the relatively strict “oppression” test and found that condominium boards of directors were entitled to broad discretion when deciding how to enforce their own rules. Even though Ms. Zaman had been disturbed for many years, her claim was dismissed as the condominium had not acted unfairly or in bad faith.

In the writer’s view, if the court had been asked to adjudicate Ms. Zaman’s claim under subsection 117(2) of the Act, rather than the oppression remedy, then the case might have had a different outcome.

A CAT adjudicator could have added the neighbour who was alleged to be creating excessive noise as a party to the proceeding, and there could have been a compliance order in Ms. Zaman’s favour against her neighbour, or even potential monetary damages ordered in Ms. Zaman’s favour.

Going forward, a new kind of neighbour vs. neighbour noise (and other nuisance) litigation is likely to emerge, with the condominium corporation also involved as a third party to the proceeding.

In Mohamoud v. CCC 25, 2019 ONSC 7127, a unit owner again commenced a court application against her condominium corporation due to alleged excessive noise and vibration, but in this case the noise and vibration related to the common element mechanical equipment immediately above her dwelling unit.

The nuisance allegedly began around 2013 and continued until 2019 when the condominium corporation ultimately replaced two exhaust fans on the roof of the building. The fan replacement did not completely eliminate the noise and vibration, but reduced it to a level that the unit owner considered tolerable. The unit owner then argued that the length of time that it took to replace the two fans (more than five years) was excessive, and therefore oppressive.

The court determined that the fans had been properly inspected and maintained by the condominium corporation, and that the condominium corporation had attempted to address the problem with its mechanical service contractors, and then with a sound engineer, before finally opting to replace the fans. This was not a case of “five years of inactivity” by the condominium corporation.

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 31

CV

31

2021-12-17 8:17 PM

That said, there was an initial delay of several months before any response was provided to Ms. Mohamoud, and the superintendent’s original memo assessing the complaint as “malicious and a complete waste of time” was found to be unduly sarcastic and dismissive.

cident, condominium corporations should diligently investigate complaints.

Ms. Mohamoud’s application was dismissed, but once again, had this case proceeded to CAT under subsection 117(2) of the Act, the outcome might have been very different. The reason being subsection 117(2) of the Act creates a new positive obligation on condominium corporations to rectify excessive noise and vibration that goes beyond merely ensuring that the equipment is being properly maintained and is kept in good working order.

This may include: 1. having a staff member attempt to verify the complaint; 2. creating a written record of the incident(s); 3. taking interim action by sending a warning letter or legal demand letter while the investigation is ongoing; 4. communicating with the complainant, explaining what steps the condominium has taken and what steps will be taken in the future, as well as expected timelines; 5. taking a written statement from the complainant; 6. taking written statements from other potential witnesses, such as neighbouring residents; 7. using technology to record or measure the nuisance; 8. taking a written statement from the accused in response to the specific allegations; 9. reporting to the board of directors; and, 10. providing the complainant and the accused with the essential findings of the investigation.

PART FOUR Best Practices and Concluding Remarks For alleged ongoing nuisance conduct, meaning conduct that is persistently breaching the rules and not a one-off in-

After the investigation is complete, a condominium corporation should attempt to resolve the complaint by communicating expected norms of behaviour to both the complainant and the accused.

If the conduct continues, then further en-

The court then confirmed that the condominium corporation was not expected to be “perfect”, it only had to demonstrate that it had acted reasonably. In this case, the court determined that the overall response to Ms. Mohamoud’s concerns was reasonable because of the need to balance the collective best interests of all owners when prioritizing maintenance and repair projects in the building.

32

CV

forcement action is necessary, up to and including commencing a CAT application for compliance.

If the alleged nuisance results from a common element source, then the same basic principles of investigation and communication would apply as above, but with necessary modifications. In this case, it may be appropriate to involve qualified experts at the condominium corporation’s cost, and condominium corporation should follow expert advice and keep the complainant informed of the steps being taken as well as expected timelines. Investigations and any necessary repairs should ideally be completed in the span of weeks or months after the matter first comes to the condominium corporation’s attention, depending on complexity, not years.

Over time, precedent case law will establish a consensus standard of care for condominium corporations responding to nuisance complaints, including appropriate timelines for rectifying problems.

Condominium managers and boards of directors should strive to withstand the initial legal uncertainty by taking a diligent approach to nuisance complaints.

As always, condominium corporations should seek legal advice at an early stage in the dispute process to ensure that they implement a strong plan of action that satisfies the condominium corporation’s standard of care. C V

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 32

2021-12-17 8:17 PM

Emiel Bril CEO VendorPM

Advice for Choosing Vendors

The ‘Gold Standard’ for Vendor Sourcing & Procurement Everybody Has Preferred Vendors, But There Will Come a Time, for One Reason or Another, When You’ll Need to Add More Vendors to Your Roster With so many vendors out there, it can be hard to decide who would be a good fit for your property. Not all companies are created equal, and you want to be sure that you’re choosing the best company when you’re considering letting them bid on your annual or one-off contracts.

There are some standard ideas when it comes to the procurement process, and we will look at those here. But just as important, we will take a look at some additional things that should be taken into consideration when adding vendors to your preferred list.

ILLUSTRATION BY MAURICE VELLEKOOP

To start, let’s get into the standard things that you should be looking for when choosing a new vendor.

Ask For Recommendations The first step when looking for a vendor is to do your due diligence and complete some simple research online. A quick google search will find you everything you need, do they have a website? Reviews? Existing clients?

Another option, if you can, is to ask other property managers in your area if they have any preferred vendors that they could recommend. Or if there is a directory that has reviews and comments, this

can be very helpful when it comes to initially picking vendors for a chance to work with you.

Hire a Licensed & Insured Company When it comes to liability, a property management company must supervise

renovations, construction and maintenance intently. If anything were to happen due to negligence on a job, the property management company can be held liable.

Make sure that the vendor that you are CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 33

CV

33

2021-12-17 8:17 PM

While budget is absolutely important and is something to work within, price shouldn’t be the driving factor when making a decision on a vendor working with is licensed (if applicable) in your area. Some cities require specific licensing to work within their jurisdiction. Along with licensing you will want to ensure that they have an insurance policy appropriate for the undertaking and a bond if required. This will need to be enough to cover any damage to the property, as well as any injuries that could happen on site. In other words you will need to make sure that these companies are compliant, and you will want proof of their license and a copy of their insurance claim for your records.

further mitigate any risk by seeing what policies they have in place for the safety of tenants as well as their workers. As the saying goes “by failing to prepare, you are preparing to fail.”

Also making sure that they follow standard health and safety practices are important. Are they WSIB certified? Do they have a set of standard procedures and do they always take every precaution they can? Having insurance is the minimum, and necessary, but you will want to

Before hiring anyone, or even sending out an RFQ, make sure to check a company’s credibility and qualifications to determine how much experience they have. Do they hold any industry certifications? Any extra training or qualifications that make them stand apart from their competi-

34

CV

Experience Matters Typically for a vendor to complete their job to the standard that we would expect they have to have some experience under their belt. While this isn’t always the case, because everyone has to start somewhere, it can definitely give peace of mind when awarding a contract.

tors? Take a look through their website or online reviews, see if they have a list of current or past customers, you can usually find some pictures of past work during this as well.

Consider Your Budget While budget is absolutely important and is something to work within, price shouldn’t be the driving factor when making a decision on a vendor.

When it comes down to dollars you can look at this two ways, first as the price, and second as the value. At first glance these can be seen as the same thing, but when you dive into it they have some major differences. In the world price is arbitrary, and value is fundamental. For example, you can get two quotes back for annual landscaping at $10,000, the price here for both companies is just that, $10,000. However the value can be very different, company one is a brand new startup with no previous customers, where the second company is an established business with 20 years experience and a list of high profile customers. It can be said that the perceived value for company two is much higher than company one.

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 34

2021-12-17 8:17 PM

‘Gold Standard’ Considerations Although the standard considerations cover the basics of the work itself, there are more nuanced aspects that you can choose to consider when sourcing a vendor.

Environmental Responsibility Whether they realize it or not, businesses are inextricably linked to environmental sustainability. A wide range of building maintenance services–including facilities management, property management, cleaning and janitorial services, and pest control–can contribute to reducing greenhouse gas emissions.

Establishing green initiatives in your building maintenance plan is an excellent way to earn points with the U.N.’s Green Economy initiative, reduce your carbon footprint and help the environment, as well as improve the quality of life of your employees and tenants. As you look for building maintenance vendors who can help you develop these initiatives, here are some green considerations to keep in mind when choosing your partner.

Building Maintenance Certifications There are a number of green certifications that building maintenance vendors can earn. To make sure your vendors’ green initiative is legitimate, check for accreditation from: The Green Business Certification Inc., or e-Standards and Certifications Institute (eSCI). Also, ask if their products contain recycled materials and if they use non-toxic chemicals. Remember—the more you know about how your vendor works toward sustainability, the better chance you have at creating an ecofriendly building!

Follow the Sustainable Development Goals (SDGs) The Sustainable Development Goals, as agreed upon by all member states of the United Nations in 2015, are an agenda for global development. Follow them religiously to hire building maintenance vendors that support your green initiatives.

In order to achieve these goals, countries worldwide must cut their carbon emissions and green their economies—all while providing a high quality of life for its citizens. Clearly, there’s much more at stake than just paper-pushing or hitting

quarterly targets! As you’re reading this, you may be wondering what you can do to help reach these lofty goals. The first step is hiring building maintenance vendors that align with sustainable practices.

Though you can’t necessarily control what your vendors do in their day-to-day operations, you can weigh their commitment to environmental sustainability when deciding who to use for building maintenance.

It’s important to understand that not all vendors will be able to meet every green initiative, so it’s up to you and your team to prioritize and choose wisely based on your company’s priorities and resources.

Social Responsibility From political figures to commercial building owners, social responsibility is on everyone’s mind. But what does it mean to be socially responsible? And how does this impact the average business owner?

In its essence, social responsibility means that individuals and companies have a duty to act in the best interests of their environment and society as a whole. You can make sure your business is doing its

Improve How You Work With Vendors Vendor Management

Sourcing

Procurement

Compliance

Easily get 3 quotes, for all your building services Trusted by over 5,000 buildings & 30,000 vendors

For more information visit us at VendorPM.com

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 35

CV

35

2021-12-17 8:17 PM

part by hiring vendors that are socially responsible. These vendors aren’t only doing what they can to help the community, but they are also adding to your building’s social responsibility initiatives.

Does It Really Matter?

Yes, it really does matter. Your organization’s well-being depends on a long list of factors—some of which are out of your control.

But one thing you can control is who provides your business with goods and services.

Why not support those organizations that

share your values? A socially responsible vendor will treat you as more than just another source of income; they’ll invest time in understanding your business.

They have a stake in making sure your success is tied to theirs. This makes them more engaged and committed to quality, service, and meeting deadlines – something every organization wants from its vendors.

How Can I Tell if They Are Socially Responsible?

You can usually find information about

whether a company is socially responsible in one of two places: on their website or on their social media accounts.

If they have an About Us section on their website, look there for mentions of social responsibility. Most companies are proud to promote that they’re doing good work in these areas, so it shouldn’t be hard to find.

It would also be worth looking at their corporate and CEO/founder’s social media accounts—that’s often where many companies get involved with promoting their brand and offering glimpses into how they operate. In some cases, you might even get a bit of insight into what kind of company culture they have, which can give you some clues as to how things might go if you worked with them.

Diversity & Inclusion Policy Diversity and inclusion are important not only because they’re essential for a workplace that supports people from all backgrounds but also because they’re good for business. Diversity increases engagement, leads to greater innovation, and increases retention by improving employee wellbeing.

If your company is committed to hiring diverse talent, it can seem daunting to find a vendor partner who shares your values.

But doing so is well worth it—not only for your business, but also for society as a whole.

Overall Company Alignment It’s safe to say when it comes to hiring your building’s vendors, there are many questions to consider. Do they have safety training? Is their staff wellqualified? What about how they treat clients? And then there’s that one question that often gets left out of consideration: Are these people good for our community?

Vendors should not be selected solely on price and standard considerations. Understanding a vendor’s company wide initiatives like environmental and social responsibility will help align your goals and create a mutually beneficial partnership. C V

36

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 36

2021-12-17 8:17 PM

member

NEWS COTY Award

The Fairways is Presented With the Condo of the Year Award This fall, CCI-T was pleased to present The Fairways with the 2021 Condo Of The Year Award

Above: Staff and Board Members of The Fairways Right: Anne Wouters, The Fairways Board Member & Murray Johnson, CCI-T President

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 37

CV

37

2021-12-17 8:17 PM

member

NEWS

CCI Was There

Webinar: Your Guide to Managing Short-Term Rentals The Impact of the New Municipal Short-Term Rental Bylaws and Best Strategies for Dealing With Them On October 21, 2021, CCI Toronto presented Your Guide to Managing ShortTerm Rentals webinar. During this webinar, attendees heard from industry experts who discussed the impact of the new municipal short-term rental bylaws and best strategies for dealing with short-term rentals in your community. Our panelists included Sally Thompson (Synergy Partners), John DeVellis (Shibley Righton LLP), Wes Neal (City of Toronto), Manjeet Ram (Festival Towers) and Benjamin Tabesh (Condor Security).

John DeVellis

Wes Neal

Manjeet Ram

Benjamin Tabesh

Sally Thompson

Missed out on the webinar? You can watch it on the CCI Toronto’s website: ccitoronto.org 38

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 38

2021-12-17 8:17 PM

member

NEWS

T’is the Season

CCI Word Search Puzzle Y

S

C

L

Z

T

E

W

U

T

E

E

L

S

K

G

A

L

E

S

H

E

I

U

N

O

I

T

A

L

U

S

N

I

S

E

B

C

R

A

U

N

C

G

J

N

Y

O

A

S

H

O

V

E

L

N

L

H

E

L

E

O

I

E

D

B

C

Q

Q

N

S

S

Y

P

E

O

U

I

M

T

C

C

C

S

E

V

O

L

G

V

R

A

E

E

I

I

S

L

O

L

I

E

L

R

S

K

C

O

S

M

T

E

N

E

G

T

T

L

V

S

O

N

E

O

P

L

O

W

W

O

N

S

B

D

H

A

E

Q

A

A

K

I

C

T

Q

S

F

F

U

M

R

A

E

I

J

N

R

Y

L

M

W

P

A

A

S

L

E

D

V

U

H

K

A

V

H

R

Y

M

N

T

E

B

L

R

K

Z

T

A

H

E

E

M

E

R

G

E

N

C

Y

S

C

L

P

E

A

R

U

H

A

S

O

F

A

S

C

B

T

J

G

I

A

I

E

N

T

U

A

T

O

O

C

L

R

O

H

I

H

G

N

R

N

Z

R

E

I

L

I

P

L

C

O

A

C

O

P

H

A

G

I

H

R

Z

I

G

N

N

E

G

Y

P

K

O

R

P

Z

G

W

N

I

C

U

A

F

F

G

U

I

M

R

L

A

E

U

F

L

E

Y

I

K

L

F

R

B

L

A

N

K

E

T

L

O

C

Y

L

G

D

N

Z

S

J

U

D

X

F

X

D

A

E

R

B

R

E

G

N

I

G

M

E

L

T

O

D

Q

D

L

O

C

Q

E

E

Y

E

G

G

N

O

G

E

U

V

H

A

K

K

U

N

A

H

D

R

E

P

A

R

C

S

U

R

S

K

E

G

T

Y

C

U

R

L

I

N

G

M

S

T

T

I

M

F

H

L

BLANKET BLIZZARD BLUSTERY CHILL CHRISTMAS COAT COCOA COLD

CURLING EARMUFFS EGGNOG EMERGENCY FIREPLACE FREEZING FROZEN FURNACE

GALE GENERATOR GINGERBREAD GLOVES GLYCOL HANUKKAH HAT HEATING

HIBERNATE HIBERNATION HOCKEY ICE ICICLE IGLOO INSULATION LUGE

MELT MITTS PARKA PINECONES PLOW POLAR REMOVAL SALT

SAND SCARF SCRAPER SHOVEL SKATING SKIING SLED SLEET

SLEIGH SLUSH SNOW SOCKS THAW VEST WIND

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 39

CV

39

2021-12-17 8:17 PM

Get Published!

Want to Add Your Voice to the Conversation?

We’re always looking for new and interesting articles for Condovoice!

Please feel encouraged to send article ideas and submissions to: seamus@ccitoronto.org

40

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 40

2021-12-17 8:18 PM

condominium

owners

Timely ideas, insight, inspiration and information of particular interest to condominium owners

Ryan Griffiths CWB Maxium Financial

A Clear Strategy

Window Pain The cost to replace windows in a highrise condominium typically represents the largest expense the corporation will ever undertake by a huge magnitude. The cost to replace the windows can be 2 to 5 times the next most expensive project for a high-rise condominium corporation (interestingly, the same dynamics apply for a townhouse complex with an underground parking garage). Although each corporation is unique, this dynamic means that the repair or replacement strategy for the windows has a huge impact on the financial needs of the condominium corporation.

The first condo in Canada was built in 1967, making the oldest condominium in the country 54 years old. The rapid development in the following years means that many condos are now between 25 and 50 years old, the period in the lifecycle of a building where the decision on whether to proceed with major window refurbishment or replacement is on the horizon. An older condominium with deteriorating windows is in a particularly challenging situation. In an ideal world where money isn’t an issue, the decision to replace the windows would be easy. Unfortunately, the cost of most major construction, and window replacements specifically, has increased significantly over the last several years, which likely creates a shortfall for even the most studiously planned con-

dominium corporations. To compound the issue, the present risk of continued inflation and the rising cost of deferring this kind of project presents an additional challenge.

Ultimately, many high-rise corporations will need additional funding when it comes time to replace the windows, and the community may need to consider a special assessment or a loan to the condominium corporation. There are several key considerations.

Total cost to Refurbish or Replace The immediate cost to refurbish the existing window system is always going to be less expensive than full replacement, however, it is wise for the corporation to consider the total cost over time. If a window refurbishment only buys the corporation 10 more years before a full replacement is

necessary, is that really money well spent?

If a window refurbishment is undertaken, the reserve funding model in Ontario will still require the corporation to save for the eventual window replacement. Often, the refurbishment expense plus the cost of full window system replacement in the future will be more expensive than replacing the windows now when looking at total costs over time. To get a sense of the true cost, a qualified engineering consultant needs to be engaged to price the cost of refurbishment or replacement, the lifespan of each approach, and the impact on the funding needs for the corporation’s Reserve Fund.

Defer vs. Do Now When funding is at issue the natural reaction may be to defer the project and save to do the work in the future. For a large window project, this presents some challenges. Deferring a window replacement CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 41

CV

ILLUSTRATION BY CARL WIENS

Replacing Windows is Typically the Largest Expense a High-Rise Condominium Corporation will Ever Undertake

41

2021-12-17 8:18 PM

CCI Toronto NEWS

Are you following our Legislative Newsflashes?

Stay current, informed and aware!

Did you know that one of the benefits of a CCI-T membership is the work of our legislative committee and their ongoing updates on legal topics important to condos?

The committee works each month to review changes to legislation that have an impact on the operation of condominium corporations. It is important to CCI-T that our members receive timely and relevant information to guide them to social and financial success in their communities and the communities they serve.

authorities so that we can ensure they are educated on the impact legislative changes have to condominium corporations. In doing so, we can proactively work to benefit our members.

If you aren’t already receiving our newsflashes, contact info@ccitoronto.org. Past newsflashes can also be found on our website (https://ccitoronto.org/news).

We also work to develop relationships with government

42

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 42

2021-12-17 8:18 PM

project typically requires continuing to spend significant money on interim repairs, and the replacement of insulated glass units (“IGU’s”) that fail in the meantime. The corporation must also budget responsibly for the increase in the cost of the project to do the work in the future (as opposed to doing the work now) or risk still falling short

on funding once they are ready to proceed.

I would recommend a condo corporation consider these costs against the cost of doing the window replacement project now and funding the shortfall with a special assessment or a loan to the condominium corporation. The interest cost (either personally or through the corporation) may be

cheaper than the additional costs associated with deferring the work into the future.

Here is a real example of a condo corporation who determined that the cost to finance a large window replacement project with a loan to the condominium corporation would most likely be less expensive than deferring the project:

COSTS ASSOCIATED WITH DEFERRAL (6 year Delay) Estimated Repair Cost 2021 Estimated Repair Cost 2022 Estimated Repair Cost 2023 Estimated Repair Cost 2024 Estimated Repair Cost 2025 Estimated Repair Cost 2026 Inflation Adjustment for 2026

TOTAL INTEREST COSTS AT 6% $

2,158,303

$ $ $ $ $ $ $

105,063 107,689 110,381 113,141 115,969 118,869 1,650,000

$

2,321,112

INCREASED COST TO DEFER $

162,809

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 43

CV

43

2021-12-17 8:18 PM

44

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 44

2021-12-17 8:18 PM

COST COMPARISON – CONSTRUCTION INFLATION VS. INTEREST Project Cost $ 1,000,000 $ 1,000,000

Inflation Rate 2.50% 4.00%

Year 1 $ 1,025,000 $ 1,040,000

Year 5 $ 1,131,408 $ 1,216,653

Year 10 $ 1,280,085 $ 1,480,244

Loan Cost $ 1,000,000

Interest Rate 5.50%

Year 1 $ 1,030,041

Year 5 $ 1,146,070

Year 10 $ 1,302,316

The key culprit in the equation is the rising cost of the project due to inflation. The issue at hand is that the rate of inflation is applied to the total cost of the project every year, and it has a compounding effect. Take a simple one million dollar project cost for example in the table above, at 2.5% annual inflation the cost of that project in 5 years is $131,408 higher, in 10 years the cost is $280,085 higher. If actual inflation is only slightly higher at 4% the increased cost is dramatically higher as the same project costs $216,653 more in 5 years or $480,244 more in 10 years.

Comparatively, the cost to complete the one million dollar project now with financing at 5.50% for example is comparable to the cost of deferring the work at 2.5% inflation, and dramatically less than deferring the work at 4.0% inflation. The cost is different from the inflation costs because a loan gets repaid monthly, and the interest is calculated each month on a declining balance.

Unit Values Condo boards considering window replacement often also consider the potential impact on unit values from completing the project. Old windows and window walls systems can make a building look tired and run down, and this may be negatively impacting the appeal of a building from the outside and from within the units. Astute boards have consulted local real estate experts to help them navigate these considerations. Understanding the potential positive influence in unit values can sometimes help boards make decisions and garner support from the unit owners to proceed with a major window replacement project.

Resident Benefits Anyone who has replaced old drafty windows with new windows can likely attest

to the improvement in comfort, temperature control and the reduced noise from the outside. In many cases there may also be real savings in heating and cooling that can potentially be quantified and factored into the decision-making process.

Combining Other Projects Many boards considering window replacements likely also have other major work on their wish list. A common example is the interior refurbishment of common areas.

These types of non-essential (but still important) projects often get pushed off when a corporation is deferring more essential work. Many boards that have decided to

finance a window replacement project with a loan to the condominium corporation have taken advantage of the opportunity to spread out the cost of other near-term work at the same time. The cost of an interior refurbishment may be small in comparison to a window replacement (one million dollars vs. six million dollars for example) but getting this work done may be very satisfying to many residents with a desire for refreshed common areas and the work can positively influence unit values.

Special Assessment vs. a Loan to the Condominium Corporation Faced with a short-term funding need the options for a condominium corpora-

tion are limited to a special assessment or a loan to the condominium corporation. There are pros and cons to either approach, and careful evaluation of both alternatives is recommended for a community make the right decision. Critical to consider are the amount of the special assessment for each unit owner, and what the prospective condo fees will look like if the corporation proceeds with a special assessment, or what the prospective condo fees will look like if the corporation takes a loan. Each situation and each community are unique. Many boards facing this difficult decision have chosen to present both options to their owners, and allow the owners to decide, in conjunction with the presentation of a borrowing bylaw. The process can be a way to educate owners on the funding alternatives and empower the owners to decide what is best for their community. A borrowing bylaw requires a supportive vote of more than 50% of all owners. If the vote passes; the majority of owners have decided that a loan to the corporation is the best solution for the community, if the vote does not pass; this represents a decision from the owners that a special assessment is a better solution for their community. Board members must make many important decisions for the community, when it comes to a need for additional funding, it may be a wise strategy for a board to empower the owners to make the call.

As a condo board member in an aging high-rise building, I encourage you to pay a close attention to your strategy for eventual window replacement. There are great resources in the industry that can help you plan the best path forward for your community. Thoughtful planning and careful consideration of the various alternatives should help guide your community through this important milestone project. C V CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 45

CV

45

2021-12-17 8:18 PM

46

CV

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 46

2021-12-17 8:18 PM

Advertiser’s List COMPANY

PAGE

COMPANY

PAGE

4Seasons HVAC Solutions

30

Horlick Levitt Di Lella LLP

A. R. Consulting

42

JCO + Associates

9

ACMO (Comp)

40

KayCondo GC

4

Atrens Management Group Inc.

14

Lionheart Property Management

32

Atrens-Counsel Insurance Brokers

12

Nadlan-Harris Property Management Inc.

28

B1 Management Group Inc.

36

PropertyWright Management Inc.

46

Brown & Beattie Ltd.

18

Read Jones Christoffersen Ltd.

16

Comfort Property Management

43

Summa Property Management Inc

Criterium-Jansen Engineers

10

Suncorp Valuations

19

Crossbridge Condominium Services Ltd.

34

Synergy Partners Consulting Ltd

42

Deo Condominium Lawyers Duka Property Management Gardiner Miller Arnold LLP.

Back Cover 2 Inside Front Cover

GPM Property Management

44

Green Leaf Landscaping

40

Back Cover

6

Trinity Engineering and Consulting Inc.

8

VendorPM

35

Wei CPA Professional Corp.

19

Wilson Blanchard Management

4

Visit Us On Social Media Facebook - @CCIToronto YouTube - CCI Your Condo Connection LinkedIn - Canadian Condominium Institute Toronto Chapter

V C Condovoice

Instagram - CCIToronto Twitter - @ccitoronto iTunes - CCI Toronto CV+

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 47

CV

47

2021-12-17 8:18 PM

Gene Lewis

Vice President of Operations Duka Property Management Inc.

The Last Word

Understanding in a Changing World

I wondered how they came to such a recommendation with respect to the enforcement. While I only have the information that was reported in the news, I am guessing that the Manager felt that the Corporation would be on solid ground based on the rule.

In our ever-changing world, this to me is where we need to be aware that a rule that might have been written years ago, may not be in sync with the current environment and the reality of the community.

Further, in the hierarchy of governing documents, the Manager appears to have failed to consider that the Rules are subservient to Human Rights. What might have happened is that their existing rule defining a single-family, failed to recognize the definition was not current with what now constitutes a family/spousal relationship, particularly when viewed from the broader human rights issue.

One can’t help but ask “How could you be so narrow minded?”

48

CV

As I tell Boards during preliminary meetings, it is Management’s job to ensure the enforcement of the rules of the Corporation. Their rules should reflect their community and should be reviewed every couple of years to ensure they reflect their evolving nature and current social norms.

For instance, 15 years ago we rarely saw rules banning smoking in common areas, now it is common place. In addition to the Board reviewing their rules to ensure they are current, have your Corporation’s lawyer review the rules and your policies, so that you don’t have rules hiding as policies and policies hiding as rules. Further, make sure that they are consistent with changes in Human Rights, the Condo Act and support and flow from your Declaration.

This story raises the difficult situation that

The unanswered questions in this story are; Why was the Board/ Management unsatisfied with the answer the Tenant gave regarding their living status? Why did they choose to narrowly enforce the rule? Are they doing the same for all single individuals who are having friends stay over? What is the difference? If the real issue was that this couple was disruptive to the community, the Board/Management could have used ‘quiet enjoyment’. Otherwise, I would refer to Pierre Trudeau’s famous line as then Justice Minister “There is no place for the state in the bedrooms of Canadians”. I think that there is no place for the Board in how couples define their relationships. We have other mechanisms to rely on, should the couple interfere with others quiet enjoyment. If the real reason for the rule was to control short-term rentals, then they need to review and rewrite their rules to be reflective of today’s living environment and social structures. C V

ILLUSTRATION SANDRA DIONISI

a Corporation can find itself in due to unintended consequences. There is speculation that the rule was designed to prevent short-term rentals by limiting people who are unrelated from living together. It also raises the issue, of whether management applied this rule to all other units, where you have two ‘unrelated’ individuals living in the same unit.

For instance, two students who are sharing the cost of a rental would be prohibited under the condo’s rule. If management did not send notices to the two students, this would likely be a case for discrimination.

I read, like many of you with surprise, about the case involving a downtown condominium located in the Bay and Wellesley area and the interpretation of a rule by the board and enforced by management with respect to what constituted a “family” in their building. The building was registered in 1991. Occupants are restricted to single families and management was reported to be asking for marriage certificates as evidence of this.

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 48

2021-12-17 8:18 PM

CONDOVOICE WINTER 2021

SM5329_WINTER 2021.indd 49

CV

49

2021-12-17 8:18 PM

WE CHECK ALL THE BOXES HLD Meetings hosts and chairs AGMs and other owners’ meetings with state-of-the-art electronic voting and meeting software. We’re looking forward to meeting with you!

HOSTING &

CHAIRING ( ENQUIRE ABOUT OUR EXCLUSIVE BUNDLE PRICING )

EXPERIENCED CHAIRPERSONS & MODERATORS

PRELIMINARY NOTICE OF MEETING DISTRIBUTION

ADVANCE ELECTRONIC VOTING (E-BALLOTS)

NOTICE OF MEETING DISTRIBUTION

LIVE VOTING AT THE MEETING

REAL TIME RESULT TABULATION

PAPER PROXY SCRUTINIZATION

EMAIL REMINDERS

EXPERTS IN CONDOMINIUM LAW 100 SHEPPARD AVE. EAST SUITE 870, TORONTO, ON M2N 6N5 WWW.HLDLAWYERS.COM TEL 416.512.7440 X235 BKAPOOR@HLDMEETINGS.COM TRUST •VEXPERIENCE • INTEGRITY CONDOVOICE WINTER 2021 50

C

SM5329_WINTER 2021.indd 50

2021-12-17 8:18 PM