Canadian Apartment Magazine | May/June 2017

Apartment CANADIAN

VOLUME 14 / NUMBER 2 / MAY/JUNE 2017

EMERGING ‘HOODS FROM AJAX TO NEW WESTMINSTER, MAPPING CANADA’S NEXT TOP MARKETS

plus

WHO’S WHO 2017 NOTABLE TRANSACTIONS THE FAIR HOUSING PLAN PA R T O FACT THE THE CANNABIS

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EDITOR’S NOTE>>

SUBURBAN COOL:

MAKING THE MOVE TO AJAX There’s been a lot of contentious talk lately about the poor conditions, lack of supply, and exorbitant price of rental housing—particularly in cities like Toronto and Vancouver, where home prices have recently hit peak levels. Understandably, tenants are outraged when elevators break down, leaky plumbing isn’t addressed and appliances are on the fritz. On the other hand, no one can (or wants to) cough up the extra dollars required to upgrade those building conditions, despite living in neighbourhoods where the taxes alone are deadly.

The reality is, living downtown (any downtown) isn’t cheap, a fact highlighted in the infographic below. That’s why so many people are wisely giving up on their urban dream, and heading off to sunnier pastures where an affordable existence is still in the realm of possibility.

The good news is, some of those markets are actually becoming bustling hubs in their own right, offering the same types of amenities and dining options you’d find in the centre of Toronto. In this issue, RentSeeker’s Chaim Rivlin takes us on a journey to the new neighbourhoods that are beckoning young families and millennials. From Ajax, Ontario, to New Westminster, B.C., find out why it’s cool to be suburban.

Of course, don’t miss our annual Who’s Who feature on page 15, which ranks the top apartment movers and shakers of 2017. Special thanks to all those who kindly submitted their information and worked so hard at compiling this great resource.

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Apartment CANADIAN

Editor

Erin Ruddy

Publisher

Mitchell Saltzman

Senior Designer

Annette Carlucci

Production Manager

Maria Siassina

Production Coordinator Nadya Domingo Contributing Writers

aula Gasparro P Chaim Rivlin Andy Schwartze

Director of Sales

Eric Harbottle

National Sales

Sean Foley Stephanie Philbin Melissa Valentini

Digital Media Director Steven Chester Circulation

Aashish Sharma For sales information call (416) 512-8186

Canadian Apartment Magazine is published six times a year by:

5255 Yonge St., Suite 1000, Toronto, Ontario M2N 6P4 E-mail: info@mediaedge.ca

President Kevin Brown Copyright 2017 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140X

Sincerely, Circulation 416-516-8186 ext. 234 circulation@mediaedge.ca

Erin Ruddy @CdnAptEditor

Subscription Rates: Canada: 1 year, $50*, 2 years, $90*, US $75 International $100, Single Copy Sales: Canada: $12* * Plus applicable taxes Requests for permission to reprint any portion of this magazine should be sent to Erin Ruddy.

rent trends THE COST OF RENT AROUND THE WORLD According to the latest Deutsche Bank market research report, here are the Top 25 most expensive cities in the world to rent a mid-range two-bedroom apartment in 2017:

16

13 $1,694 6

1 SAN FRANCISCO U.S

$3,449

20

21 TORONTO, CANADA

$1,377 8

CHICAGO, U.S.

$1,441

LONDON, U.K.

BOSTON, U.S.

3

NEW YORK CITY, U.S.

$2,909

$2,225

$2,617

7

PARIS, FRANCE

$2,289

The opinions expressed are those of the authors of articles and do not necessarily reflect the views of Canadian Apartment Magazine. This information is general and is not a substitute for legal advice.

STOCKHOLM, SWEDEN

Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada.

$1,547 22

AMSTERDAM, NETHERLANDS

EDINBURGH, U.K.

$2,361

$1,548 15

$1,570

5

$1,348

12

Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor.

HELSINKI, FINLAND

COPENHAGEN, DENMARK

DUBLIN, IRELAND

4

17

Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions.

OSLO, NORWAY

$1,830 19

ZURICH, SWITZERLAND

$ 2,520

25

FRANKFURT, GERMANY

$1,463

10 24

MILAN, ITALY

$1,188

TOKYO, JAPAN

SHANGHAI, CHINA

$2,010

$1,249 2 HONG KONG, H.K

$3,237

11 SINGAPORE, SINGAPORE

$1,884

9 All prices are shown in U.S. dollars.

For the complete report, visit: www.finews.ch/images/download/Mapping.the.worlds.prices.2017.pdf

SYDNEY, AUSTRALIA

14

$2,440

MELBOURNE, AUSTRALIA

$1,658

18

AUCKLAND, NEW ZEALAND

$1,512 23

WELLINGTON, NEW ZEALAND

$1,250

STABILITY AND BALANCE

AT THE TOP!

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Apartment CANADIAN

VOLUME 14 / NUMBER 2 / MAY/JUNE 2017

FEATURE 15 Who’s Who 2017 A ranking of Canada’s top apartment owners and managers

COLUMNS 8 Transactions The Apartment Market Today

By Erin Ruddy 12 CMHC Investing in New Rental Housing

By Paula Gasparro 30 Legislation Deconstructing Ontario’s Fair Housing Plan

By Erin Ruddy 34 Newsworthy Industry Hot topics 36 Insurance Renting your Unit Privately? Look out!

By Andy Schwartze

COVER STORY

DEPARTMENTS

Apartment

24 Where the In-Crowd Lives A look at some of Canada’s trendiest new cities and neighbourhoods

By Chaim Rivlin

4

HOT NEW NEIGHBOURHOODS

CANADIAN

Editor’s Note

ON THE COVER:

VOLUME 14 / NUMBER 2 / MAY/JUNE 2017

Downtown Ajax and the new “Vision” rental development, image Courtesy of Medallion.

FROM AJAX TO NEW WESTMINSTER, MAPPING CANADA’S NEXT TOP MARKETS

18 Ask the Expert

plus

WHO’S WHO 2017 NOTABLE TRANSACTIONS THE FAIR HOUSING PLAN PA R T O FACT THE THE CANNABIS

P A R T

O F

T H E

PA R T O F T H E

P A R T

O F

T H E

PM#40063056

38 Smart Ideas

17082_CAM_May_June_Redesign_8.5_2017.indd 1

2017-05-31 4:29 PM

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TRANSACTIONS >>

Apartment Market highlights: Q2 2017 Morguard’s Keith Reading shares key industry trends and insights Above average transaction volumes, persistent demand and foreign capital are all driving Canada’s commercial investment property market, in 2017 according to a recent report issued by Morguard Corporation. The abundance of capital available for investment, in combination with the overall attractiveness of the market, is resulting in multiple-bid scenarios and higher prices. Consequently, there is downward pressure on yields, particularly regarding Canada’s premium assets. Modest price increases are expected to persevere for the near-term.

Notable Q2 transactions Address

City

#of Units

Sale Price (Millions)

Sale Price/Unit

Purchaser

Ottawa

157

$17.8

$113,057

Golden Equity Properties

1.

1440 Mayview/1425 Rosenthal

2.

140 Main St West

Hamilton

321

$80.7

$251,378

Starlight

3.

110 Wellesley St E

Toronto

48

$13.8

$286,979

Akelius

4.

Braemar Gardens

Vancouver

126

$21.5

$170,635

Realstar

5.

Barafield Apartments

Vancouver

109

$42.0

$385,321

Hollyburn Properties

8 | Canadian Apartment | Part of the REMI Network |

GTA Market Facts

$247 million

Total GTA multi-residential transaction volume in the first quarter

$181,664

FOR SALE

Average price per unit for buildings of 20 units or more

$1,132

Average monthly rental rate for 1-bedroom unit in the GTA

4.1%

Average capitalization rate across all GTA multi-residential product types

FOR SALE

Source: Avison Young

While the Canadian market may appear small on the international stage, it is garnering significant attention from international investors. Investment volume hit a record high in 2016 and foreign capital continues to support above-average transaction volumes and prices. There are risks to the market, which include the new U.S. administration’s protectionist threat, possible interest rate hikes, a potential prolonged commodities slump and the knockon effects of a breakup of the European Union. Despite these, in Canada, demand for commercial real estate continues to outstrip the supply.

“We see the current phase of the commercial real estate as durable,” said Keith Reading. “Canada’s federal budget contained few surprises.

The national inflation rate was unchanged for the quarter and our continued confidence in the U.S. economy lead us to believe that current market conditions for commercial real estate will remain supportive for the foreseeable future. In this environment, investors will look to enter into forward purchases, and pursue creative development and redevelopment opportunities.”

Despite peak pricing levels, investors continue to target purpose-built multi-suite rental properties across the country. Low interest rates and easy access to debt and equity capital are driving investment activity.

“Some investors are turning to forward purchases and development as sources of core investments,” said Reading. “Yields are holding at record lows for assets in prime locations. Investment demand continues to outdistance the supply of assets available for acquisition in major markets.”

Reading also notes that development activity will continue to increase in the coming year, but oversupply risk is low.

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| www.REMInetwork.com | May/June 2017 | 9

SPONSORED CONTENT

What apartment owners look for in a lender

Featuring Peter Cook and Robert Fleet from First National Financial LP

When Kevin Green is contemplating the purchase of a multi-million-dollar apartment building, he wants a lender with expertise in the multi-family asset class, someone “who understands a building’s bones.”

Ideally, the lender should be, “your financial team-mate, partner, advocate,” says Green, president of Greenwin Inc., one of Canada’s largest, privately-owned residential property management firms.

While many buyers decide on the property that they want to purchase and then enlist a mortgage broker to shop around at the banks for the best rates and terms, Green likes to involve his lender from the outset.

“We want to acquire assets, so we hunt like a team,” he says. He switched from a bank to First National Financial LP shortly after meeting Robert Fleet, a financing specialist and Assistant Vice-President at First National, Canada’s largest non-bank mortgage lender.

“Whether the lender is a bank or a non-bank institution, deep knowledge of the complexity of the multi-family sector is essential as well as CMHC expertise.”

“It was a good move for Greenwin,” says Green, whose style is to act quickly when purchasing a building. First National has a reliable eye for evaluating the value and condition of the property, Green says, and they provide sound strategic advice.

Whether the lender is a bank or a nonbank institution, deep knowledge of the complexity of the multi-family sector is essential as well as CMHC expertise, he adds.

First National’s Robert Fleet and Peter Cook, Assistant Vice-President of commercial lending, advise that borrowers should look at the reputation and experience of the manager handling their files as well as the reputation of the institution.

SPONSORED CONTENT

“You don’t want to deal with an inexperienced person recently transferred from another department.”

Knowing what it takes to get the deal done Depending on the loan size, a borrower could potentially save tens of thousands of dollars in interest with a CMHC-insured mortgage, which typically offers lower rates.

“But the lowest interest rate on its own is not the most important thing,” say Cook and Fleet. “The focus should be on the total cost of borrowing.”

For instance, the cost of third-party reports, such as appraisals and environmental, engineering and structural

studies may vary by thousands of dollars depending on the lender: “Borrowers should request that their lender provide them with three quotes from approved third-party firms and disclose processing and closing fees. The lender’s legal fees should also be taken into consideration.”

reviews are required to approve the loan.

He should also ask how quickly he can expect a letter of interest, a commitment letter and at what point he may lock in the rate in advance of funding. These are important questions to ask prior to selecting a lender.”

Greenwin’s Kevin Green says it speeds up the process considerably when the lender provides the borrower with a detailed checklist of what is required to get the deal done.

Cook and Fleet say every lender has a different approval process.

For Green, the relationship with his lenders goes beyond transactions, valuations and discussions about roofs and boilers. His company is involved in providing social programs for families in some of Toronto’s more impoverished neighbourhoods, he says.

“The borrower should ask how long the process will take and how many credit

“We want to make it safe. We want kids staying in school and getting jobs.”

First National has provided financial and moral support for these endeavours. “When we launch a social program, First National is there. If we open a centre, First National is there.” It means a lot, Green says.

Peter Cook and Robert Fleet are Assistant Vice presidents, Commercial Financing at First National Financial.

CMHC REPORT >>

Investing in New Rental Housing Canada’s Rental Construction Financing Initiative

by Paula Gasparro On April 20th in Montréal, the Honourable Jean-Yves Duclos, Minister of Families, Children and Social Development and Minister Responsible for the Canada Mortgage and Housing Corporation, announced the launch of the Rental Construction Financing initiative, a program expected to fund the construction of 10,000 new rental housing units.

“C

anada’s middle class will benefit from the construction of new rental housing,” said Minister Duclos.

“Through these significant investments, our Government is taking action to increase the supply of new rental developments, providing housing options that are closer to public transit, schools and services for hard-working Canadian families.”

The Rental Construction Financing initiative will provide $2.5 billion in low-cost loans to support the construction of new rental housing, relieving pressure in rental markets that are experiencing low vacancy rates and high rents.

The initiative will complement commitments made in Budget 2017, which will invest more than $11.2 billion over 11 years for initiatives designed to build, renew and repair Canada’s stock of affordable housing. These significant investments are made as part of a new National Housing Strategy that will be launched later this year and help ensure that Canadians have housing that meets their needs.

The rental market is an important housing option for approximately 30 per cent of Canadians including middle class families, young adults, seniors and new immigrants to Canada.

Starting in 2017, the initiative will provide up to $625 million in loans each year for four years to encourage the development of new rental housing by municipalities, non-profit organizations and housing developers.

Combined with Budget 2017’s new direct lending initiative for the renewal of affordable housing, it is expected that the amount of capital available for lending at low cost will be more than $10 billion over 11 years.

12 | Canadian Apartment | Part of the REMI Network |

Eligibility requirements To be eligible, borrowers must demonstrate that their projects are financially viable without ongoing operating subsidies. The financing initiative will prioritize projects that demonstrate greater social outcomes and may offer a loan for up to 100% of the cost of these projects. Borrowers must meet minimum requirements for affordability, energy efficiency and accessibility.

Applications will also be scored on additional social outcomes such as proximity to public transit and partnerships with other government organizations.

Lower-cost loans will be provided for terms of up to 10 years, providing cost predictability during the earliest and most challenging phases of development. Loans approved through the financing initiative will include CMHC mortgage loan insurance, providing access to preferred interest rates and simplifying loan renewal throughout the life of the mortgage.

Effective May 15, CMHC will introduce enhancements to its multi-unit mortgage loan insurance that will address the rental needs of Canadians while supporting efforts to expand and preserve the supply of affordable rental housing.

“CMHC’s products and services facilitate access to housing for all Canadians, not just homebuyers.” said Steve Mennill, Senior VicePresident, Insurance. “The enhancements to our multi-unit mortgage loan insurance products and policies are designed to expand our participation in key market segments while stimulating the creation and preservation of affordable rental housing.”

The CMHC enhancements will include: Extending affordable housing flexibilities to existing rental properties, including Social Housing projects with up to five years remaining in the Operating Agreement, to support the preservation of existing affordable housing. Previously, affordable housing flexibilities were only available for new rental properties.

Expanding its definition of affordability to recognize federal, provincial, territorial or municipal housing objectives. The new affordability criteria also aligns with other CMHC initiatives and is intended to incent housing developers into the affordable rental housing market.

Introducing greater underwriting flexibilities to better support key multi-unit market segments that address the rental housing needs of Canadians including standard apartments, student housing, single room occupancy (SRO) projects, retirement homes, and supportive housing projects. Greater underwriting flexibility is provided surrounding non-residential space, furnished suites and bulk leases, amortization periods, off-campus student housing, second mortgages, nonrecourse lending and personal guarantee requirements.

Introducing a revised premium schedule aligned with CMHC’s continued participation in market segments that address the rental needs of Canadians, and is reflective of the risks associated with those segments. The revised premium schedule also supports the expansion and preservation of affordable housing units.

>>

CMHCREPORT REPORT>> CMHC

Premium surcharges will no longer be collected for construction advances, release of rental achievement holdback, student housing or retirement homes.

CMHC is Canada’s only mortgage loan insurer for multi-unit residential properties.

CMHC also offers incentives, including access to higher loan-to-value ratios and reduced premiums, to support affordable rental housing projects.

Multi-unit mortgage loan insurance provides access to preferred mortgage rates helping to lower the cost of financing for the construction, purchase and refinancing of rental properties and facilitates renewals throughout the life of the mortgage.

As at September 30, 2016, CMHC multiunit mortgage loan insurance accounted for approximately 12% of its overall insurance-in-force.

The changes apply to CMHC insured loans for five or more unit residential properties including standard apartments, student housing, single room occupancy (SRO) projects, retirement homes, and supportive housing projects.

CMHC’s Seed Funding and Affordable Rental Innovation Fund are complementary initiatives that may be combined with the Rental Construction Financing initiative and with CMHC’s multi-unit mortgage loan insurance. These initiatives support the supply of affordable and innovative rental housing without reliance on ongoing operating subsidies.

To take advantage of CMHC’s Mortgage Loan Insurance, contact Paula Gasparro, Manager, Business Development, Multi-Unit Mortgage Insurance at 416-250-2731 or via e-mail at pgasparr@cmhc.ca.

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| www.REMInetwork.com | May/June 2017 | 13 Untitled-1 1

2017-04-26 8:35 AM

CRB PROGRAM UPDATE >>

Ensuring Quality and Sustainability Certified Rental Building Program Continues to Grow in Importance to its Members, the Industry & Rental-Housing Consumers

by Ted Whitehead, Director of Certification

In 2017, the Certified Rental Building (CRB) program celebrated its 9th anniversary. It continues to grow in importance with rental-housing consumers in their selection choice of an apartment home. Internet inquires through the program’s website (www.crbprogram.org) now number well over 1 million since its inception in June, 2008, as renters search for the CRB-approved “quality assurance” approval in their selection of apartment homes in Ontario & B.C. The CRB program went to a number of new Ontario & B.C. cities and communities for the first-time this year – this included in Ontario Angus, Collingwood, Sault Ste. Marie, Brantford, and Woodstock; while in B.C. the B.C. CRB program now has newly CRB-approved buildings in Kelowna, Kamloops, Surrey, the Fraser Valley, Victoria, and of course three principal cities in the metropolitan Vancouver area. In 2016, a significant milestone was achieved as it was marked by the certification of the 1,000th “certified” building in Ontario.

CRB Program’s Living GREEN Together: Creating a Sustainability Culture across the Industry Members in the CRB program continue to embrace the program’s new Living GREEN Together (LGT) environmental-operating standards providing the industry with a strong sustainability foothold and presence with rental-housing consumers and all levels of government stakeholders. The CRB LGT standards promote staff and resident engagement in lowering the building environmental operating footprint and can produce savings opportunities in the range of 3 to 15 per cent in energy consumption (and related costs) along with improving waste diversion practices, and promoting cleaner, greener apartment communities. At a time in our industry where the rising costs of utilities are approaching near double digit increases annually (and for the foreseeable future) the LGT standards focus both on a defined set of multi-residential apartment building standards for energy, water, natural gas, and waste diversion practices, as well as sustainable resident engagement practices. For many in the industry, effective resident engagement practices may just be the last of the “low hanging” opportunities to achieve realizable energy consumption savings.

14 | Canadian Apartment | Part of the REMI Network |

Government Relations Value: the Long-term “Win-Win” for the Industry The CRB program’s largest benefit to its members and the industry rests in the enhanced “governmentrelations” value it creates with provincial government and local municipal government officials.

It demonstrates to this key audience that the industry is capable of “selfregulating” itself. The larger the industry’s participation level in this selfmanaged quality certification program, the better leverage we have to demonstrate to government decision makers that there is no need for additional government regulatory intervention. Self-regulation for any industry has always been found to be cheaper and more practical than government imposed regulatory regimes. So if your organization is not a member of the CRB program, or any other self-regulatory program, then I would encourage you to join as soon as possible.

PRESENTED BY:

WHO’S WHO 2017

IN THE CANADIAN APARTMENT INDUSTRY MANAGE ONLY

CERTIFIED NUMBER OF RENTAL UNITS BUILDING

OWN ONLY

CERTIFIED NUMBER OF RENTAL UNITS BUILDING

MANAGE & OWN

CERTIFIED NUMBER OF RENTAL UNITS BUILDING

MetCap Living Management Inc.

22,850

InterRent REIT

8,336

CAPREIT

41,750

The DMS Group

20,416

Healthcare of Ontario Pension Plan Inc. (HOOPP)

3,024

Boardwalk Rental Communities

33,773

Société de Gestion Cogir

16,520

Oxford Properties Group

1,936

Realstar Management

30,200

12,267

Lanesborough Real Estate Investment Trust

1,234

Starlight Investments

26,221

11,795

SABJOY INC

1,216

11,253

Dorset Realty Group

1,150

9,707

Twin City Management Ltd.

988

Skyline Apartment REIT

16,314

8,353

QuadReal

848

Killam Apartment REIT

14,106

6,136

Canadian Urban Limited

712

Minto Properties Inc.

11,755

5,624

Centurion Asset Management Inc.

610

QuadReal

11,258

GWL Realty Advisors Briarlane Rental Property Management Inc. Gateway Property Management Corporation Greenwin Inc. Sterling Karamar Property Management Shelter Canadian Properties Limited Osgoode Properties

Homestead Land Holdings Limited Timbercreek Asset Management

25,790 18,429

CANADIAN APARTMENT WHO’S WHO 2017

CERTIFIED RENTAL BUILDING

RANK

UNITS MANAGE

OWN

BUILDINGS BOTH

TOTAL

MANAGE

OWN

BOTH

TOTAL

1

CAPREIT

41,750

41,750

662

662

2

Boardwalk Rental Communities

33,773 33,773

230

230

3

Realstar Management

30,200 30,200

173

173

4

Starlight Investments

26,221

26,221

422

422

5

Homestead Land Holdings Limited

25,790 25,790

214

214

6

MetCap Living Management Inc.

22,850

22,850

7

The DMS Group

20,416

20,416

168

8

Timbercreek Asset Management

18,719

1

9

Société de Gestion Cogir

16,520

97

10

Skyline Apartment REIT

11

Minto Properties Inc.

12

Killam Apartment REIT

13

Greenwin Inc.

9,707

14

GWL Realty Advisors

12,267

15

QuadReal AtlasDoors_CAM_May_2017_FINAL.pdf

290

18,429

16,520

3,526

1

2017-05-23

11:46 AM

848

-

16,314

16,314

11,755

15,281

14,106

14,106

3,747

13,454

249

12,267

78

11,258

12,106

168 239

240 97

127

176

176

315

442

181

181

20

269 78

5

43

48

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CANADIAN APARTMENT WHO’S WHO 2017

CERTIFIED RENTAL BUILDING

RANK

UNITS MANAGE

OWN

BUILDINGS BOTH

TOTAL

MANAGE

11,795

161

227

11,480

201

16

Briarlane Rental Property Management Inc.

11,795

17

Gateway Property Management Corporation

11,253

18

Vertica Resident Services

11,091

19

Mainstreet Equity Corp.

20

OWN

BOTH

TOTAL

161 7

208

11,091

69

69

10,181

10,181

221

221

Drewlo Holdings Inc.

8,558

8,558

63

63

21

Park Property Management Inc.

8,418

8,418

73

73

22

Sterling Karamar Property Management

23

Oxford Properties Group

1,936

24

InterRent REIT

8,336

25

Globe Property Management

26

Shelter Canadian Properties Limited

27

Centurion Asset Management Inc.

28

Osgoode Properties

5,624

29

Berkley Property Management Inc.

4,978

30

Hollyburn Properties Ltd.

31

Devon Properties Ltd.

5,098

32

Ontario Property Management Group Inc.

5,009

33

Royal Property Management

5,000

34

M&R Holdings

35

ComField Management Services Inc.

36

Concert Properties Ltd.

37

Prospero International Realty Inc.

38

Pinedale Properties Ltd.

3,955

3,955

33

33

39

Kelson Group

3,440

3,440

47

47

40

Healthcare of Ontario Pension Plan Inc. (HOOPP)

41

Immomarketing Inc.

42

Old Oak Properties Inc.

43

Colliers International

44

Westcorp Property Management

45

Ferguslea Properties

2,465

2,465

996

996

46

Bentall Kennedy (Canada) LP

2,253

2,253

19

19

47

O'Shanter Development Company Ltd.

48

Firm Capital Properties Inc.

18 | Canadian Apartment | Part of the REMI Network |

8,353

8,353

6,136 610

6,403

8,339

6,720

6,720

222

6,358

5,511

6,121

6

49 3 25

278

5,256

69

5,143

5,143

4,200

5,098

122

5,025

45

5,000

60

3,855

4,004

3,024

1

50

47

50

3

72

81

81 122

1

18

977

1,931

2,908

5

2,657

48

64 3

3

11

16 48

2,540

1,800

2,250

2,244

2,244

19 72

64

2,980

38 38

72

68

46 60

1

2,912

1,553

86

38

3,024

2,657

86

38

4,022 4,004

19

25

4,810 4,200

450

13

-

5,624

4,810

987

111

8,336

16

167

111

-

5

18

23

36

36

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CANADIAN APARTMENT WHO’S WHO 2017

CERTIFIED RENTAL BUILDING

RANK

UNITS MANAGE

OWN

BUILDINGS BOTH

TOTAL

MANAGE

OWN

BOTH

TOTAL

49

Apollo Property Management Ltd

2,140

2,140

28

28

50

Kings College Management Limited

2,100

2,100

20

20

51

Brown Group of Companies Inc., The

603

2,039

9

52

Dorset Realty Group

850

53

WJ Properties

1,907

1,907

13

13

54

Williams and McDaniel Property Management

1,615

1,615

40

40

55

Lawrence Construction/Grant Management

784

805

1,589

8

16

24

56

Melchior Management

462

1,093

1,555

19

34

53

57

Steeves and Rozema Group

1,528

1,528

38

38

58

ONNI Group

1,300

1,300

59

Lanesborough Real Estate Investment Trust

1,234

1,234

60

SABJOY INC

1,216

1,216

61

Preston Group

1,182

1,182

4

4

62

Davpart Inc.

1,180

1,180

14

14

63

AWM-Alliance Real Estate Group

64

State Building Group

65

Pacific Quorum Properties Inc.

1,084

66

Tandem Group

1,008

67

Twin City Management Ltd.

68

Kroma Management Ltd.

69

Westwood Management International

895

895

3

3

70

BlueStone Properties Inc.

844

844

10

10

71

Manulife Real Estate

793

793

1

1

72

BayShore Property Management

73

Canadian Urban Limited

74

Gillin Engineering & Construction Ltd.

75

I.G. Investment Management, Ltd.

605

605

2

2

76

Fiera Properties

602

602

11

11

77

Equitable Real Estate Investment Corporation Ltd.

589

589

28

28

78

CitiGroup Properties Limited

568

568

12

12

79

Northland Properties Inc.

80

Shindico Realty

94

81

Atlantis Realty Services, Inc.

487

82

Vancor Group Inc.

20 | Canadian Apartment | Part of the REMI Network |

1,436 1,150

2,000

1,163

1,163

40

19 40

-

1

15

15

15

16

17

17

1,111

1,111

2

1,086

16

16

1,008

3

3

988

15

988

913

913

778

778 712

57

21 6

630

6 3

552

398

492

3

487

6

471

14

376

15

21

552

15

57

15

712 630

95

10

3

9

9

4

7 6

21

35

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CANADIAN APARTMENT WHO’S WHO 2017

CERTIFIED RENTAL BUILDING

RANK

UNITS MANAGE

OWN

BUILDINGS BOTH

443

TOTAL

MANAGE

443

5

OWN

BOTH

TOTAL

83

Gulf Pacific Property Management Ltd.

84

Bedford Properties & Estates Ltd.

442

442

13

13

85

Arnon Corp.

441

441

3

3

86

Cominar REIT

432

432

1

1

87

Ashelron Ltd.

88

Goodwood Property Investment Ltd.

89

Lionheart Property Management Inc.

374

90

Canlight Management Inc

278

91

Martello Properties Services Inc.

258

92

17A Properties

93

Canahahns Company Limited

94

Summa Property Management

95

LaSalle Investment Management

96

Warrington PCI Management

190

97

The Enfield Group Inc.

130

98

Lloyd Zerker Realty Ltd.

172

416

416 400

15

5

36

-

400

3

374

329

314

5

258

11

239

239

209

224

1

198

6

198 198

45

329 1

7

7

2

3 6

1 7

175

3

172

2

6 11

198 190

3

1 7

2

5 2

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22 SolidGeneral_CPM_March_2017.indd | Canadian Apartment | Part of the1 REMI Network |

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2017-03-07 2:08 PM

CANADIAN APARTMENT WHO’S WHO 2017

CERTIFIED RENTAL BUILDING

RANK

UNITS MANAGE

TOTAL

MANAGE

168

168

5

5

100 Colonnade BridgePort

139

139

1

1

101

Regional Group of Companies Inc., The

120

120

22

22

102

Wilson Blanchard Management Inc.

118

118

4

4

103

Sluis Properties

Downing Street Property Management Inc.

99

OWN

BUILDINGS BOTH

112

OWN

112

BOTH

5

TOTAL

5

104 SDM Realty Advisors Ltd.

92

92

1

1

105

80

80

2

2

Gitalis Group Inc.

106 Regency Group

75

75

10

10

107

72

72

1

1

20

64

2

1

3

60

8

Melcor Developments

108 Loncom Property Management

44

109 Taft Management Inc.

60

8

110

Beedie Development Group

52

52

2

2

111

Dayhu Investments Ltd.

49

49

1

1

112

RioCan REIT

34

34

113

Parkhurst Asset Corp

114

MetCap_CPM_WhosWho_Supplement_2017.pdf

ICC Property Management Ltd.

15 1

2017-03-20

15

12:28 PM

14

-

30

1

14

1

1

2 1

#1

RANKED APARTMENT MANAGEMENT COMPANY

C

M

Y

CM

MY

CY

CMY

K

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We manage over $2 Billion in assets owned by private families and institutional investors. Our focus is on revenue growth and vacancy reduction, while maintainting strict control over expenses. We also To ensure the health of your bottom line, contact: Kazi Shahnewaz, Director, Business Development Cell: 647.887.5676 k.m.shahnewaz@metcap.com www.metcap.com | www.REMInetwork.com | May/June 2017 | 23

COVER STORY >>

WHERE THE “ IN-CROWD LIVES

by Chaim Rivlin, CEO, RentSeeker.ca

24 | Canadian Apartment | Part of the REMI Network |

COVER STORY >>

A look at some of Canada’s Trendiest New Cities and Neighbourhoods Rated as the Number 1 place to visit in 2017 by The New York Times and Lonely Planet, it’s fair to say the global spotlight on Canada has never been brighter. This year marks the 150th birthday of our prodigious nation, and cities like Toronto and Vancouver are getting the world recognition they deserve. It’s not easy to top global lists of “best places to live” while making headlines for real estate growth. That said, as housing prices continue to overwhelm, a recent Statistics Canada report confirms that more people are opting to move to surrounding regions and neighbourhoods that have favourable amenities and commute times.

| www.REMInetwork.com | May/June 2017 | 25

COVER STORY >>

In the Durham Region of Ontario, for instance, Ajax has experienced a population growth of 9.2 per cent over the last five years. Recently the community has been undergoing active revitalization, including an overhaul of Pat Bayly Square.

Vision, a new purpose-built rental development comprised of six buildings ranging from nine to 25-storeys, is due to open this summer, giving future Ajax residents direct access to the commercial and retail space, bike paths, public transportation, and Highway 401. Lake Ontario and the new civic centre will also be steps away.

“There is a continued shortage of housing, and specifically rental supply, and we are excited to be nearing completion of our first purpose-built tower at Vision at Pat Bayly Square that will cater to young families, professionals and couples seeking more affordable housing options,” said Medallion’s Director of Residential Property Management, George Espinola.

The new mixed-use development will offer a total of 1,743 residential units—a first of its kind for the Durham Region, and Espinola’s hope is that it will help Ajax meet a growing demand for new rental accommodation.

Other Hot Rental Markets that are Attracting Millennials in 2017:

Waterloo is often referred to as the Silicon Valley of Canada, and lots of tech-driven millennials live in the North-Central neighbourhood of this fast-growing city. The area is gaining global recognition as a hub for developing tech professionals and the high-tech industry is shaping the region. Being accepted into the University of Waterloo is a big deal, and it’s widely regarded as one of the most cutting-edge universities in North America. University of Waterloo is situated in the NorthCentral neighbourhood. Combine its student population with neighbouring Wilfrid Laurier University, and Waterloo has a young, professional culture that’s hard to find anywhere else.

Tourism Calgary

Waterloo Ontario

Downtown

Calgary

While Calgary has had its share of economic struggles since 2015, things appear to be on the upswing for the city of 1,392,609 people. According to Statistics Canada, the census metropolitan area of Calgary increased by 14.6 per cent since the last census in 2011 while the population of Alberta increased by 11.6 per cent.

Of those, many millennials are choosing to live in the centre of the city—or in the southern most suburbs, in places like Auburn Bay and Mahogany. Home to both university students and young professionals, Calgary is not only one of Canada’s largest metropolitan areas, but it is steadily growing for reasons that include its close proximity to Banff.

Market outlook:

Market outlook:

“The Waterloo Region is one of the fastest growing areas in Ontario. Its proximity to major North American markets and transportation networks, its diverse ethnic makeup, and its excellent education, health, cultural and recreational facilities make this a great home for families and businesses.” - CMHC

“Calgary’s economy peaked in 2014 with the spike in oil prices. Since then the Calgary economy has declined.

The outlook calls for growth to begin this year but it will take several years before 2014 levels of economic activity return. For example, the jobs lost during the recession are not expected to fully return to Calgary before 2019.”

– Calgary.ca, official website of The City of Calgary

26 | Canadian Apartment | Part of the REMI Network |

Market outlook: “A strong local economy with a mix of stable public sector jobs and a strong private sector contribute to high consumer confidence in the city. Ottawa’s emerging technology sector is also expected to continue to grow and lead to additional demand for housing in Canada’s capital.”

Ottawa Tourism

-REMAX Housing Market Outlook, 2017

ByWard Market,

Ottawa

As our nation’s capital, some may not consider Ottawa a very hip and trendy place to live, but the ByWard Market neighbourhood will challenge any notion that Ottawa isn’t cool. Home to extensive campuses for University of Ottawa students and government workers, the neighbourhood offers an eclectic mix of old-world charm and new urban development. More than 20 per cent of Ottawa’s housing options were built after 1990, which is another huge draw for young people.

Market outlook:

Saskatoon Proper

For years, Saskatoon has been topping lists of the best places to live in Canada for things like access to health care, ease of walking, biking and taking public transit. Saskatoon is also known as one of Canada’s youngest cities, with millennials now outnumbering seniors. Employment opportunities include agriculture, oil, potash, food processing, biotechnology, information technology, lifestyle and environmental sciences, and more. With its low cost of living, friendly neighbourhoods, stable economy, multiculturalism and beautiful scenery, it’s easy to understand why so many young people are choosing to call “The Paris of the Prairies” home.

“We forecast the Saskatchewan economy to return to positive growth both this year and next, with activity rising 1.8% and 2.3%, respectively. This follows two years of negative growth including an expected 1.8% drop in 2016. The contraction last year largely reflected weakness in both energy and non-energy mining.”

– RBC Provincial Outlook, March 2017

| www.REMInetwork.com | May/June 2017 | 27

COVER STORY >>

Market outlook: “A significant increase in multiple-family housing starts along with steady construction of single-detached homes will result in a higher number of total housing starts, with some moderation in 2017 and 2018. Population growth is expected to remain steady while employment is expected to pick up, supporting housing demand.”

– CMHC

New Westminster, B.C. Canada’s next hot market?

Kelowna B.C.

To be able to live on (or a bike ride’s distance to) Lake Okanagan is a dream come true, and to say the neighbourhood is beautiful doesn’t do it justice. For many millennials who are living the West Coast dream, Kelowna is one of the only affordable options as the cost of Vancouver rent is staggering, even in the suburbs. As a result, for many young people it’s “Kelowna or Bust,” and for a city of just under 200,000, it’s getting quite the reputation.

28 | Canadian Apartment | Part of the REMI Network |

According to research from the Real Estate Investment Network (REIN), New Westminster is poised to become the next hot market in Metro Vancouver as young professionals and families seek affordability outside the expensive city core. The report finds New Westminster is growing in several key indicators on the REIN LongTerm Real Estate Success Formula and forecasts the city is just beginning a strong economic upward trend.

With its planned revitalization of the waterfront and historic downtown, and its close proximity to the Trans-Canada highway, U.S. border crossings and the Vancouver International Airport, New Westminster is a prime location for industrial and transportation businesses. The city is also taking action towards a vibrant future with planned infrastructure developments, including upgrades to the hospital, secondary school and the Pattullo Bridge.

“Throughout history, there have been cities that seem to miss out, or lag, while the surrounding regions boom.

This used to be the story of New Westminster; however, it is no longer true,” said REIN’s senior analyst Don R. Campbell. “Homeowners and investors who have been paying close attention over the last few years have done very well to position themselves in this transportation hub city. Vacancy rates have dropped, demand has increased for home and condo purchases and we are, in fact, just witnessing the beginning of a strong upward demand curve.”

REIN research predicts opportunities exist for strategic investors as New Westminster revitalizes key areas, establishes its status as a transportation hub, and becomes an area on pace with growth in Metro Vancouver. Even with New Westminster now on the “demand radar”, diligent and creative real estate investors who want to stay ahead of the economic and demographic trends may still find cash flowing properties in the city today.

Boucherville Quebec

This neighbourhood in Quebec is much more than just a Montreal suburb. Topping the MoneySense list of best places to live in 2015, and referred to as Canada’s best-kept secret, Boucherville is perhaps the place in Quebec for millennials to settle down and start families. Boucherville has one of the lowest unemployment rates in Canada, and with its reasonable housing prices and lower-than-average cost of living, it’s easy to understand why so many young couples are moving to Boucherville.

Market outlook: “Quebec’s unemployment rate fell from 6.9% in July, 2016, to 6.2% in January, 2017—the lowest level in the province since Statistics Canada began publishing the statistics in the current format in 1976. Also notable is the fact that Quebec’s employment rate (the share of the working-age population that is employed) has risen to nearly 61%, which matches Ontario’s rate for the first time ever.”

– RBC Provincial Outlook, March 2017

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| www.REMInetwork.com | May/June 2017 | 29

LEGISLATION >>

Deconstructing Ontario’s Fair Housing Plan What the New Measures Mean for the Rental Housing Sector

by Erin Ruddy

I

n an effort to help increase the province’s supply of affordable housing and protect renters from what many are calling exorbitant rent hikes, the Ontario Government has announced a comprehensive package of measures, including: bringing in a 15 per cent foreign buyer tax; expanding rent control to include post-1991 buildings; allowing Toronto to impose a tax on vacant homes; and using surplus lands for affordable housing.

While cash-strapped tenants and homeseekers are fundamentally in favour of these new measures, the question remains, what will

30 | Canadian Apartment | Part of the REMI Network |

it all mean for Ontario’s purpose-build rental industry?

The Federation of Rental Providers of Ontario (FRPO) has been vocally opposed to the removal of the 1991 Exemption since talks of this possibility abounded several months ago. To highlight its concerns, the association recently conducted a survey of its membership detailing the extent of damage the change could have on the province’s new rental supply.

While FRPO shares the government’s interest in protecting Ontario’s renters, Jim Murphy, FRPO President and CEO, objected

to its decision to change rent control legislation without any formal consultation with the very industry it implicates.

“The announcement by the Wynne government will put thousands of units, and millions of dollars in provincial revenues at risk,” he said. “It is a rash, politically motivated decision, which will hurt, not help, generations of Ontario renters.”

Defending the new measures, Ontario Premier Kathleen Wynn stated at a press conference: “When young people can’t afford their own apartment or can’t imagine ever

owning their own home, we know we have a problem. And when the rising cost of housing is making more and more people insecure about their future, and about their quality of life in Ontario, we know we have to act.”

Expanding rent control According to the Fair Housing Plan, expanding rent control to all private rental units in Ontario—including those built after 1991—will ensure increases in rental costs can only rise at the rate posted in the annual provincial rent increase guideline. Over the past ten years, the annual rent increase guideline has averaged two per cent. The increase is capped at a maximum of 2.5 per cent. Under these changes, landlords would still be able to apply vacancy decontrol and seek above guideline increases where permitted.

The government will also introduce legislation that would, if passed, add new measures to the Residential Tenancies Act. This will include: developing a standard lease with explanatory information available in multiple languages; tightening provisions for “landlord’s own use” evictions; and ensuring that tenants are adequately compensated if asked to vacate under this rule.

The plan states it will prohibit aboveguideline increases where elevator work orders have not been completed and make technical changes at the Landlord-Tenant Board to make the process fairer and easier for renters and landlords.

Joe Hoffer of Cohen Highley LLP has his doubts that the outlined measures will add up to much in the way of boosting our much-needed rental supply. “If the new construction (post-1991) exemption is completely eliminated, the other announced incentives to encourage new apartment construction will be of limited value, particularly if interest rates move upward,” he said. “While Toronto may not feel too much pain given the demand, the proposal will have adverse impacts across most of the rest of the province.”

Furthermore, Hoffer voiced concerns that the mandatory lease proposals will require most operators to revise their administrative processes and current leasing documents, which for many will be a costly exercise.

“This proposal seems to have come out of left field and there is no policy context or rationale advanced by the Province to justify

“If the new construction (post-1991) exemption is completely eliminated, the other announced incentives to encourage new apartment construction will be of limited value, particularly if interest rates move upward.” – Joe Hoffer, Cohen highley LLP

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| www.REMInetwork.com | May/June 2017 | 31

LEGISLATION >>

this significant intrusion into what is, for the most part, a highly professionally run industry,” he said.

Thomas Schwartz, president and CEO of CAPREIT, echoes the concerns of the apartment industry at large. “We believe that the proposed changes to Ontario’s rent control legislation will, in fact, reduce the availability of future rental accommodation and thus only accelerate the already significant lack of available rental housing in

the Province,” he said. “There are much better alternative policies the Government should consider that will ensure the development of new rental properties in Ontario while also protecting consumers from overmarket increases in monthly rents.

Supply and demand should regulate this market and these new policies will only result in reduced supply as demand for housing is increasing.”

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Please visit our website: www.cbre.ca/nag-toronto

* Sales Representative This disclaimer shall apply to CBRE Limited, Real Estate Brokerage, and to all other divisions of the Corporation; to include all employees and independent contractors (“CBRE”). The information set out herein, including, without limitation, any projections, images, opinions, assumptions and estimates obtained from third parties (the “Information”) has not been verified by CBRE, and CBRE does not represent, warrant or guarantee the accuracy, correctness and completeness of the Information. CBRE does not accept or assume any responsibility or liability, direct or consequential, for the Information or the recipient’s reliance upon the Information. The recipient of the Information should take such steps as the recipient may deem necessary to verify the Information prior to placing any reliance upon the Information. The Information may change and any property described in the Information may be withdrawn from the market at any time without notice or obligation to the recipient from CBRE. CBRE and the CBRE logo are the service marks of CBRE Limited and/or its affiliated or related companies in other countries. All other marks displayed on this document are the property of their respective owners. All Rights Reserved.

32 | Canadian Apartment | Part of the REMI Network | vertical-magazine-ad-design - de changes v2.indd 1 Untitled-4 1

2/2/2016 10:38:00 AM 2016-02-08 9:04 AM

The Cannabis Act On April 13th, the federal government released its proposed legislation for legalizing marijuana. If enacted, the bill will make possession of up to 30 grams of marijuana for personal use no longer a crime for adults aged 18 (or 19) and over. For people under the age set by the province, the possession of up to 5 grams of marijuana will still be an offence, but not a crime.

The new bill also means adults can now legally grow up to four plants in a dwelling unit, whether that is a single family home, a condominium, a rental apartment or a rented house. Of course, most landlords do not want tenants smoking and growing marijuana in their rental units, citing concerns about electrical safety and the effects of second hand smoke to the property and fellow tenants’ health. Ontario currently prohibits tobacco smoking in the common areas of apartment buildings for similar reasons, and it is likely a new provincial law will ban marijuana smoking in the common areas of apartment buildings as well.

According to the Canadian Federation of Apartment Associations (CFFA), insurance companies currently react very negatively to learning that a tenant is growing marijuana in a rental building.

“They tend to cancel the policy or jack up the rates to four or five times higher than normal,” said John Dickie, CFAA President. “Mortgage holders also react very negatively to learning that a tenant is growing marijuana in a rental building, or to the cancellation of an insurance policy.

In fact, they tend to demand full payment of their mortgage loans.”

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| www.REMInetwork.com | May/June 2017 | 33 Untitled-4 1

2017-02-07 2:22 PM

NEWSWORTHY >>

Industry Hot Topics Optional property tax class set to be mandatory

O

ntario municipalities appear to be losing an optional property tax class and gaining a mandatory one. Though expressed somewhat vaguely, the provincial government’s newly announced plan to boost housing supply and affordability forewarns that all municipalities will be required to adopt the new multi-residential property class and align it with the tax rate applied to residential properties.

An April 20 release from the Ministry of Finance affirms the Ontario government’s legislative and regulatory agenda will include: “Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental and will apply to the entire province.”

Currently under Ontario’s Assessment Act, municipalities can voluntarily pass an enabling by-law to establish the property class.

Qualifying properties — whether newly constructed or created from the conversion of non-residential buildings — would then be taxed at a distinct rate, set at the municipal council’s discretion, for a maximum of 35 years. Participating municipalities can also pass a by-law at any time to discontinue use of the property class.

This flexibility has created a patchwork of scenarios across the province.

Toronto was among the first municipalities to take advantage of the new multi-residential class when the provincial government of the day open up the possibility. At the time, a handful of discretionary property classes — including options for distinct classes for office buildings, shopping centres and parking lots/vacant land — were introduced largely to deal with the fallout from the 1998 province-wide reassessment and associated assessment reforms, but the new multi-residential class was also envisioned as a mechanism municipalities could use to support the development of purpose-built rental housing.

In Toronto, the new multi-residential tax rate mirrors the residential rate, while older rental apartment buildings, built prior to the city’s 2002 formal adoption of the class, are taxed at a rate approximately 2.5 times greater. Some other municipalities peg the new multi-residential tax rate somewhere between the residential and multi-residential rates, and some municipalities offer no property tax breaks for new rental apartment development.

“For example, Brantford has a program, but it’s not aligned with the single-family tax rate in that municipality. Oakville just doesn’t have a property class for new multi-res,” explains David Gibson, a property tax consultant with Yeoman & Company Paralegal Professional Corporation. “Now municipalities will be forced to adopt the class, which they should be.”

He also advocates a broader definition of “new” to cover significant capital upgrades to the vast share of Ontario’s existing rental housing stock that’s now in the range of 50 years old. With a coalition of industry and municipal support, and drawing on his own experience proposing and steering regulatory tweaks through Ministerial processes, Gibson foresees the provincial government could be convinced to allow substantially renovated existing rental apartment buildings to qualify for the preferable property tax rate — perhaps by making the new property class status conditional on achieving LEED or some other comparable certification.

“Right now, there’s no incentive for landlords to inject the amount of cash that’s often needed into these buildings,” Gibson maintains. Beyond improving the quality of their living conditions, he suggests rewarding renovated properties with a lower property tax rate could also benefit tenants by mitigating above-guideline rent increases for capital improvements.

Making bins more convenient boosts recycling rates

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34 | Canadian Apartment | Part of the REMI Network |

esearchers at The University of British Columbia (UBC) released a new study showing that placing bins 1.5 metres away from suite doors drastically boosts recycling and composting rates by 141 per cent. The findings, published this month in the Journal of Environmental Planning and Management, highlights how small changes in convenience can have a big impact on performance.

“We know people care about the environment but having the desire to recycle and compost doesn’t always translate into behaviour changes,” Alessandra DiGiacomo, the study’s lead author and a PhD student in the UBC department of psychology, said in a recent release.

“Perhaps unsurprisingly, we found that people composted and recycled much more when we made it more convenient.”

To test their theory, they placed bins in three different locations: a garbage disposal area (the least convenient option), at the base of an elevator in a building (a more convenient option), and by elevator doors on each floor (the most convenient option). The experiments were carried out at three multi-family apartment buildings in Vancouver’s west side neighbourhood and in two student residence buildings at UBC. For 10 weeks, the researchers examined and weighed the waste.

They found that when recycling stations were placed just 1.5 meters from suites in student residences, instead of in the basement, recycling and composting increased by an average of 141 per cent, diverting an average of nearly 20 kilograms of waste from the landfill per person per year. When compost bins were placed on each floor in the apartment buildings, instead of on the ground floor, composting rates increased by 70 per cent, diverting 27 kilograms of compost from the landfill per unit per year.

“The findings show a minor change in the environment can have a huge impact on behaviour,” said study co-author Jiaying Zhao, professor in the UBC department of psychology and the Institute for Resources, Environment and Sustainability. “Traditional views are that we have to educate people about the importance of recycling and composting, but we believe that’s the wrong model because people already know. Simple factors, such as convenience, can be key to helping us become more environmentally friendly.”

Study co-authors include David Wu, Peter Lenkic and Alan Kingstone in the UBC department of psychology, and Bud Fraser of UBC Campus and Community Planning.

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| www.REMInetwork.com | May/June 2017 | 35

INSURANCE >>

Renting Your Unit Privately?

Look Out! Multi-party Agreements can get Very Messy When Things go Wrong

by Andy Schwartze

N

ot long ago, I received a call from a property manager in a condominium who reported a fire in one of the units. In short order, we had arranged for emergency cleanup and for the securing of the unit so that access was restricted for safety reasons. It turns out that the fire had taken place in a unit that had been privately rented out by its owner—someone who also

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happened to live far away. These days, this is not an uncommon situation. But when disaster strikes, it can lead to some (potentially costly) obstacles.

Let’s start with the unit owner. While the condo corporation’s Board of Directors manages the affairs of the corporation in a fiduciary manner so that the interests of all unit owners are recognized, respected and carried out reasonably and legally, assisting with that job is the property manager, who reports directly to the Board. The unit owner, who has title to, and exclusive occupancy of the unit, is bound by a series of rules, regulations and bylaws, which are set by the Board and monitored by the property manager.

The tenant’s position is completely different.

When renting a unit, that individual is governed by a rental agreement—one that was likely written in a hasty, amateur fashion. We see this a lot, and the tenant’s responsibilities are generally directed only at the owner. In other words, the Board of Directors has no easy access rights to the rented unit, unless it was part of the rental agreement. Therefore, the property manager is unable to, in any way, exercise management authority over the tenant in its role as the servant of the Board. The unit owner, who is governed by the rules and bylaws, has to respect the tenant’s right to occupancy and needs the tenant’s permission to enter the unit regardless of what the rules and bylaws of the corporation may state.

What we often see here is a complete lack of legal continuity tying the corporation, property manager, unit owner and tenant together under one set of rules and regulations. In this kind of situation we often

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see the lack of legally established responsibilities create obstacles, and even animosities that can result in stalemates if just one of the participants becomes obstinately difficult. If, on top of that, the unit owner or the tenant has no insurance, then the ability of the corporation’s insurer becomes very difficult because the uninsured participant (often the tenant) is scrambling for cover by making accusations intended to trigger someone else’s insurance as being responsible.

The corporation insures the building structure, either to the original developer’s standards or to those of a standard unit bylaw. The unit owner is responsible for, and insures, the unit improvements, the contents (appliances, etc.) and the loss of rental income flow in the event that damage forces the tenant out. Lastly, the tenant’s insurance needs to look after his/her own contents. Each must also have liability insurance included in that, because at some point, evidence will point to cause, and if negligence is suspected, the battle between insurers will start up.

Where the unit owner and/or the tenant have no insurance, each is on its own as to property damage and responsibility as to accusations of negligence.

Airbnb and short term rentals Take this one step further into the realm of short term rentals, like AirBnB. What tenant renting for a long weekend or a short holiday is going to present the unit owner with an insurance policy for that stay? The unit owner, who probably suspects that he/she is in violation of rules and bylaws as it is, may well have no insurance as the industry dislikes and monetarily penalizes risks that are short term rentals. The Board has no idea who’s renting and for what periods of time. The property manager listens to constant complaints, from other occupants, which he/she is powerless to act on, and the few occupants who are living peacefully and quietly within the rules and bylaws, are furious with the noisy comings and goings of strangers. Nobody—not the Board or the property manager—has any legal basis on which to act swiftly (with emphasis on the word swiftly) in the event of a serious development and are relegated to the lengthy processes of legally pursuing the owner in order to enforce the rules.

Now, I have deliberately made a verbal mess of these past few paragraphs, and for very good reason. It does not matter whether we are in a condominium setting, or a rental building scenario. When an owner or occupant

of a single unit in a multi residential building decides to run a little rental business on the side, things get very messy. The reason is simple: an agreement between two parties can be pretty straight forward. But when we want a multi-party agreement things get complicated.

These require drafting by legal experts and then agreement by all parties, one or more of them perhaps also wanting professional advice.

It gets expensive, argumentative and time consuming, so the important issues are ignored and everyone does the obvious—which is hope for the best. Condominium boards, owners of apartment buildings and their respective property managers have to be very careful to include strongly worded clauses that very clearly give them the authority to gain easy access to individual units that are engaged in short term style rentals. Rental agreements of all types must cede authority to the building’s governance (be it rental or condominium) and where an owner or a renter ignores these principals, financial penalties need to be enforceable.

Andy Schwartze, BSc., MBA, CIP, is an insurance broker specializing in property management and real estate. He can be reached at andy@ takecover.ca.

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DMS is very pleased to announce that Nick Savino has rejoined our team as Executive Director Non-Profit Housing overseeing the largest portfolio of Private Non Profit Housing in Canada.

Mr. Savino has over 20 years of industry experience in Senior Management positions with Greenwin, DMS and York Region. He is a Certified Property Manager; a Chartered Member of the Chartered Institute of Housing; and has served on the Board of Directors of the Ontario Non-Profit Housing Association.

DMS is one of Canada’s leading managers of multi-residential housing.