Canadian Apartment Magazine

Apartment CANADIAN

VOLUME 14 / NUMBER 4 / SEPTEMBER 2017

RISE OF THE

LUXURY RENTAL

CATERING TO A DISCERNING TENANT

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MARKET HIGHLIGHTS

FINANCING 101 CAPITAL UPGRADES

PA R T O F T H E

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EDITOR’S NOTE>>

Apartment CANADIAN

RUNNING A TIGHT SHIP

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Owning an apartment building is a major investment that can be both financially and emotionally draining. As if utility bills and missed rent payments weren’t enough to fret about, owners also must contend with staffing issues, HVAC malfunctions, legislation changes, snow removal, plumbing disasters and even the occasional bed bug infestation. That said, if they’ve invested in the right property and know how to run a tight ship, the profits can be significant.

In this issue of Canadian Apartment, we look at everything from buying that first multi-residential apartment building (page 11) to the realities of catering to a discerning demographic (page 14).

Opening this December, all industry eyes are on Two St. Thomas, a joint venture in downtown Toronto between real estate companies Bentall Kennedy and KingSett Capital. So what does it take to catch the eye (and income) of today’s discerning renters? Read our cover story and find out.

Other topics in this issue you won’t want to miss: the cost of bed bugs; the future of thermal metering; the lift on required upgrades to single-speed elevators; and the rewards of investing in energy efficiency upgrades. Of course, in Ontario, new legislation changes have created more restrictions for landlords when it comes to evicting tenants. Read our newsworthy section on page 24 to get up to speed on the latest industry buzz.

And finally, as always, be sure to visit our award-winning website, www.reminetwork.com for ongoing, daily news and exclusive features.

Editor

Erin Ruddy

Publisher

Mitchell Saltzman

Senior Designer

Annette Carlucci

Production Manager

Maria Siassina

Production Coordinator Elizabeth Nguyen Contributing Writers

aula Gasparro P Lorenzo DiGianfelice Michelle Ervin Vince Galloro 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 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

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

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

CANADA-WIDE CAP RATES (HIGH RISE APARTMENT BUILDINGS)

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.

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.

3.50% 5.00% 4.50% 5.00% 4.00% 5.25% 4.75% 3.75% 3.50% 3.00% 2.25% 5.00% 4.50% 5.75% 5.00% 5.75% 4.75% 4.50% 4.50%

VICTORIA

VANCOUVER

Source: Avison Young

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Apartment CANADIAN

VOLUME 14 / NUMBER 4 / SEPTEMBER 2017

FEATURE 30 Thermal Metre Regulations Coming to Canada How to plan ahead for the stricter new rules

By Vince Galloro 36 The Cost of Unwanted Critters What property managers need to know about bed bugs

By Alice Sinia, Ph.D COLUMNS 10 Transactions Strong Projections for CRE Investment in Canada

By Erin Ruddy 21 CMHC Cost Effective Capital Investments

By Paula Gasparro 24 Newsworthy Industry Hot Topics 26 L egislation Required Upgrades to Single-Speed Elevators Lifted

By Michelle Ervin 34 Insurance Winter Contract Season is Here

By Andy Schwartze

COVER STORY

DEPARTMENTS

14 Catering to the Discerning Renter When it comes to luxury living, Bentall Kennedy aims to please

By Erin Ruddy

4

CANADIAN

Editor’s Note

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VOLUME 14 / NUMBER 4 / SEPTEMBER 2017

Two St. Thomas, located in Toronto’s Yorkville neighbourhood

RISE OF THE

LUXURY RENTAL

CATERING TO A DISCERNING TENANT

38 Smart Ideas

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MARKET HIGHLIGHTS

FINANCING 101 CAPITAL UPGRADES

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ON THE COVER:

Apartment

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Because experience counts.

When it comes to the day to day operations and management of your multi-unit rental properties, you want to make sure you have the right people for the job. The professionals at MetCap Living have being doing just that for the best part of thirty years. From marketing, leasing, finance and accounting, to every aspect of physical, on-site management, we have your assets covered.

Guaranteed vacancy reduction, revenue growth and net profitability—when your ready to discuss a better option; we’ll be there. You can count on it.

For more information, contact:

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SPONSORED CONTENT

Knowing your apartment funding options

Featuring Jeremy Wedgbury and Aaron Cameron from First National Financial LP

Q&A: Knowing Your Apartment Funding Options Cranes are in the air as apartment construction activity increases in markets across Canada. No doubt, these are opportune times for apartment builders, and ones that require a nuanced understanding of the markets and respective lending options.

With a bird’s eye view of what’s taking shape, we reached out to Jeremy Wedgbury and Aaron Cameron from First National Financial LP. Why is it important to stay on top of apartment market trends?

“Being able to speak to those markets and understand the intricacies between them is critical to our borrowers”

Jeremy: The market for the construction of apartment buildings is very active, and it’s currently being driven by a strong commercial real estate market and sustained low interest rates. That said, developers need to remember that each sub-market varies greatly in supply and demand drivers, market rents, legislation, and loan structuring terms offered by local and national lenders.

Aaron: And that’s just it; First National has many clients who are developing properties right across the board – from Halifax to Victoria and all spots in between – so being able to speak to those markets and understand the intricacies between them is critical to our borrowers.

How are those markets different?

J: We see regional differences based on the preference of tenants and the economics associated with the rental rates they are prepared to pay. Tenants in Toronto and Vancouver have been accustomed to paying higher rents per square foot on small suites for many years to landlords in

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the shadow condominium rental market.

Other markets that have not had robust condominium markets are starting to follow that trend with higher quality downtown rental buildings that are commanding rental rates well above existing product. The big question will be, how deep is this market for high end rentals in smaller markets? Monitoring this absorption is critical to borrowers and lenders alike.

A: Given our exposure to developers nationally, we have access to firsthand knowledge of absorption rates, rental rates, and concessions that are being provided to lease up new buildings. For example, in many cases we see pre-leasing rates in new developments in Halifax of 30% to 40% or more prior to completion, while the current situation in Calgary would see up to 12 months to lease up with generous incentives.

What are developers’ financing options when it comes to taking advantage of this activity?

J: There’s no shortage of conventional and CMHC insured apartment construction financing options out there for developers.

The critical component continues to be the depth of the borrower’s development experience and the best mortgage terms are offered to groups with strong experience and covenants. There is also a steady supply of mezzanine lenders that act as a shadow covenant for primary lenders to support developers with shorter track records.

A: Although interest rates remain low, a significant risk is on the horizon for developers are the steadily increasing interest rates we have been seeing since May. Builders that are forecasting completion in 12 to 24 months must recognize the risk of higher long-term interest rates by the time they complete their projects. First National has developed certain products which allow our clients to lock interest rates up to six months earlier in the process, thereby mitigating some of this risk.

J: Where First National makes things easier, however, is we offer a greater range of financing solutions than you might get with a bank. We’re like a “one stop shop” in that our clients have access to a broad range of products, including conventional products, CMHC insured products, and even higher leverage products that help developers spread their equity more effectively.

CMHC has also come out with new programs as well?

A: Yes. On May 15, 2017, CMHC launched a new direct lending program to developers which should be a big boom to construction financing. It’s a very appealing and supportive program where funds are directed through CMHC and not the lender, so it has some very advantageous terms to it.

First National can also provide access to CMHC’s new affordable program where borrowers can get up to 95% loan to cost. That’s dramatically higher than what you’d find in the conventional market, which is typically 75-80% loan to cost.

That seems beneficial for small developers...

J: It really is. It’s fair to say the conventional market has been well supplied for large developers and, perhaps to a lesser extent, medium-sized builders. Small developers, though, are always challenged to get financing because the banks don’t have the same relationship with them. Products like the affordable program out of CMHC will really benefit smaller developers who may have the expertise to tackle a bigger project but might not be getting support from their bank.

Jeremy Wedgbury is Senior Vice President, Commercial Mortgages and Aaron Cameron is Senior Manager, Commercial Operations at First National Financial LP

TRANSACTIONS >>

Strong Projections for CRE Investment in Canada Projected Growth for 2017 has Now Surpassed 2016 Levels Investment in Canadian commercial real estate is expected to generate strong demand and performance despite the strengthening economy driving a rise in interest rates and less accommodative monetary policy, according to a new report by Morguard Corporation.

“After a second consecutive quarter of stronger than expected economic output, projected growth for 2017 has now surpassed 2016 levels, with signs pointing to an early winding down of global monetary stimulus,” said Keith Reading, director of research at Morguard. “Despite a perceived eagerness to raise interest rates, particularly in the United States, low inflation pressure should continue to act as a buffer against rapid monetary policy change in the near term.”

In Canada, early estimates indicate that commercial real estate investment remained brisk during Q2 despite the spectre of rising interest rates. “Demand for Canadian commercial real estate continues to outpace supply as Canada remains an attractive, stable option for investment,” said Reading. “While we anticipate that interest rates will

continue to rise, the change will occur gradually and at levels that remain palatable for investors. There will be little variation in the strength of the Canadian property market in the near term.”

In the Canadian housing market, recent policy changes began to produce the desired cooling effect. Total sales and average pricing both dipped during the quarter but there are indications that the respite might not last long.

“Historically hot markets like British Columbia, Toronto and Montreal are already showing signs of reheating despite recent cooldown efforts,” said Reading. “Long-term, however, the cumulative effect of increasing interest rates should act as a buffer against future housing market imbalance.”

New & notable apartment sales: Skyline Apartment REIT sold $173M in multi-residential real estate assets to Q Management LP in one of the largest multi-residential transactions this year. The sale consisted of nine properties and 1,036 apartment units located primarily in the city of Hamilton.

10 | Canadian Apartment | Part of the REMI Network |

InterRent REIT

acquired two high-rise apartments in downtown Montreal. The 23- and 13-storey buildings, consisting of 249 suites, were purchased for $53,753,725.

Starlight Investments

purchased a five-storey mid-rise apartment on Wellington Street North in Kitchener, Ontario for $5,394,000

The Fundamentals of Financing an Apartment Building Myth vs. Reality

By Lorenzo DiGianfelice, AACI Over the past decade, cap rates have been compressing all across Multifamily Toronto Canada and particularly in strong markets like Southern Ontario. While the last twenty years have seen fundamental changes in the lending community regarding value, not much has changed in the buyer and appraisal community. Seasoned apartment investors have seen this HIGH-RISE LOW-RISE TREND before and understand it, but new or first-time apartment investors LOW HIGH LOW HIGH H L tend to get blindsided by the low cap rates when it comes to financing 3.50% 4.50% 3.50% 4.50% apartments.

The fundamentals of estimating the market value of an apartment Multifamily vancouver building have not changed much in 30 years. Cap rates are derived from comparable building analysis. Simply, they are a measure of the rate of return one would get if the building was paid for in cash. It’s basically the stabilized net income divided by the sale price. For example: if the net HIGH-RISE LOW-RISE TREND income was $100,000 and the sale price was $1,000,000 then the cap rate LOW HIGH LOW HIGH H L would be 10%. Pretty simple stuff.

The stabilize net income is simply that—the net income based on a 2.25% 3.00% 2.75% 3.50% stabilized operating pro form, or normalized running of the investment, notwithstanding the actual financial operation of the building. Many estimate laundry income based on industry levels. They will then ask—why do we do this? Why not use the actual numbers? The reason is apply a market vacancy rate to arrive at the effective gross income. that all investors run their buildings differently with different motivations For expenses, most will use actual realty taxes and actual utilities, and goals. In order to compare and use cap rates, you must compare and use industry standard levels for insurance, wages, management, apples with apples, and stabilizing the comparable sales will give you a repairs and other. Income minus expenses gives you the stabilized more reliable and accurate cap rate. It is not right that many new buyers net income, and this is used to derive cap rate. pick a cap rate out of the air, like say five per cent, and then apply it to the In the past when a deal was done and the property was fully actual operations of a prospective building as it will grossly undervalue exposed, the price paid was generally considered market value. In the property. most cases appraisers and lenders (conventional or CMHC) came up Most analysts will use the actual income of the property and gross with the same value. Typically 25 per cent down was required and it up to full occupancy (i.e. put in market rents for vacant suites and the the deals were easily put together. Today, things are quite different. super’s apartment). They will use actual locker and parking income, and Many new buyers are so put off after they purchased a property that was exposed for weeks and had multiple offers that when the lender underwrites the deal, they disregard the appraiser’s value and use their own value, instead. Buyers who thought they could purchase with 25 per cent down now have to come up with 35 to 40 per cent and generally that is where deals die. Especially the smaller deals where equity is most important and buyers only have a finite amount of funds to invest.

Buyers also are mesmerized at the amount of information lenders require and all the hoops they must jump through. They wonder why all the detail is needed when lenders are only putting out 60 per cent loan to value. Do they think the market value will fall by 40 per cent? If so, perhaps they should not lend at all.

These are all questions that need to be dealt with and addressed when qualifying a buyer beforehand. The seller also needs to be aware of the reality out there, and that anything they can do to ease the process may result in a higher value. Being able to educate the Seller and Buyer will make the sales process smoother and result in more deals closing.

Lorenzo DiGianfelice, AACI is the Broker of Record with Commercial Focus Realty Inc. and has sold over $4BB of investment grade real estate and can be reached at ldigianfelice@cfrealty.ca | www.REMInetwork.com | September 2017 | 11

SPONSORED CONTENT

Taking Energy-Saving Actions for Ontario's Cap and Trade Assisting property stakeholders in reducing energy footprints

By Matthew Bradford In 2017, the province of Ontario advanced its role in the fight against climate change with the unveiling of its provincial cap and trade program. Launched on January 1, the initiative aims to help the province lower its total greenhouse gas (GHG) emissions by imposing “caps” for GHG emitters and lowering them each year. Program participants who fall under their cap can sell cap and trade permits to those who cannot, thereby incentivizing all partners to explore new and innovative ways of reducing their GHG outputs. Moreover, funds raised by permit purchases are being earmarked for future green initiatives and – ideally – support for cap and trade players.

12 | Canadian Apartment | Part of the REMI Network |

While the program is voluntary for low-end emitters, participation is mandatory for e l e c t r i c i t y i m p o r t e r s , l a rg e - s c a l e f u e l s u p p l i e r s , a n d fa c i l i t y o r n a t u ra l g a s distributors that emit more than 25,000 tonnes of GHGs per year. As such, while many cap and trade participants will reap rewards from the program, large-scale emitters will be subject to expenses that will be absorbed t h ro u g h h i g h e r s e r v i c e rat e s t o t h e i r customers – property manager included.

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“All property owners are paying for cap and trade in their natural gas bill,” says Fiona Oliver-Glasford, Enbridge Manager, Carbon Strategy, explaining, “Even though natural gas is a clean burning fuel, it is still a fossil fuel so it does have GHGs associated with its use.

Therefore, when you take action to reduce your use of natural gas through more efficient ways of using your energy, you will reduce the GHGs you emit and thus the carbon price you are paying.”

On average, Ontario's cap and trade program has increased property owners' gas bills by 12%. This, says Fiona, has motivated many to pursue energy efficient changes or retrofits to lower their usage costs: “Natural gas is still the most effective way to heat homes and buildings in this province, and remains so even with cap and trade. The challenge, though, is finding long-term ways to reduce the consumption of natural gas in order to better manage the costs imposed by this program.”

For its part, Enbridge is responding to the challenge with programs that assist customers in accurately assessing their natural gas usage, spotlighting potential savings, and making changes that will have a sustainable impact on their energy bills.

Enbridge's Run it Right program, for example, pairs commercial building stakeholders with Enbridge Energy Solution Consultants (ESC) who can uncover and monitor no-cost or low-cost improvements in a b u i l d i n g t h at w i l l l e a d t o l owe r g a s consumption. What's more, buildings that c a r r y o u t t h e e n e rg y- s av i n g m e a s u re s identified through Run it Right are eligible for thousands of dollars to offset any associated costs incurred.

Property owners eyeing an energy-related re t ro f i t o r c a p i t a l p ro j e c t ( e .g . b o i l e r

replacement) can also receive financial support through Enbridge's Commercial Custom Retrofit Incentive Program. Here again, ESCs work with customers to take an accurate profile of the building's natural gas usage, calculate the savings of potential upgrades or retrofits, assist with project planning, and provide a tiered incentive (tiered chart) based on the cubic metres of natural gas the project is projected to save.

“We're here to help our customers reduce their natural gas consumption. So when one of our customers is considering some form of property retrofit or capitol project, we'll go to that building, we'll look at how much natural

gas they're using and where it's being used, we'll crunch those numbers, and then come back with findings telling them how effective the proposed project will be in reducing their gas consumption,” explains Chris Hamilton, Enbridge Team Lead for Large Commercial Energy Solutions, adding, “Then, once the project is approved and completed at the site, we'll pay them their incentive from day one – no waiting.”

It's thanks to consultations and energy efficiency programs like these that Enbridge has reduced its customers' consumption by a total of 11.1 billion cubic metres of natural gas bet ween 1995 and 2016. In addition to c o n t r i b u t i n g s i g n i f i c a n t l y t o wa rd s t h e province's cap and trade goals (and thereby easing price increases down the road), these reductions have helped property owners and their tenants pursue greener habits and healthier bottom lines.

To keep this momentum going, Fiona adds, “Property managers need to stay engaged and understand how Ontario is evolving the program. The costs will presumably go up, so it's important for all of us to stay active in this discussion and ensure the province is doing its part to manage those costs and put the funds from this program to good use.”

To learn more about Enbridge's energy saving programs and incentives, visit www.enbridgegas.com/commercial or www.enbridgegas.com/corporate/ontario-clean-energy-future/cap-and-trade. To contact an Enbridge Energy Solutions Consultant (ESC), phone 1-866-844-9994 or email energyservices@enbridge.com.

| www.REMInetwork.com | September 2017 | 13

COVER STORY >>

CATERING TO DISCERNING R Rising in Toronto’s opulent Yorkville neighbourhood is Two St. Thomas, a joint venture between real estate companies Bentall Kennedy and KingSett Capital. The $130-million 26-storey tower made of glass, stone, wood and copper is the picture of modern sophistication, as first imagined four years ago by Hariri Pontarini Architects.

Photos: Ben Ehrensperger

14 | Canadian Apartment | Part of the REMI Network |

COVER STORY >>

THE RENTER When it comes to Luxury Living, Bentall Kennedy Aims to Please

by Erin Ruddy

| www.REMInetwork.com | September 2017 | 15

COVER STORY >>

With occupancy set for this December, Gary Lee, Senior Vice President of Residential Services for Bentall Kennedy, says expectations are high, but demand is even higher. Quite simply, Canada needs more purposebuilt rentals and Two St. Thomas is an example of the kind of high quality, modern accommodations successful young professionals and baby boomers are looking for.

“We believe we are catering to an underserved market for discerning people who choose to rent. In our view, there is strong market demand for high quality product that comes with professional management and security of tenure,” Lee says. “Yorkville hasn’t seen a purpose-built rental building in almost 15 years, but with this property, we will be delivering a level of luxury and service that residents will find exceptional for a building of this type. We are excited about the new living choices that Two St. Thomas brings to the Yorkville neighbourhood.”

Unique opportunity Given Toronto’s red-hot rental market, Bentall Kennedy, through its Prime Canadian Property Fund, and in partnership with KingSett Capital’s 16 | Canadian Apartment | Part of the REMI Network |

Income Fund, saw Two St. Thomas as a unique opportunity to develop high quality, luxury apartments in one of the city’s most desirable neighbourhoods. Lined with European-style cafes, museums, lavish hotels and high-end fashion boutiques, Yorkville is a humming locale. The elegant high-rise was crafted to fit into this cultural epicenter, while creating a core asset that would generate stable, consistent returns.

“The development of purpose-built rental buildings has been a key area of focus for Bentall Kennedy for a number of years,” says Lee. “We’re developing thousands of units across major centres throughout North America. In Canada, we are in the midst of three other major projects that will continue to play to this strength.”

Those projects include: Portfolio, a recently completed 26-storey, 210-unit development in the Beltline district of Calgary; a new (unnamed) 114-unit project in Vancouver, set for construction in Q4; and a new mixeduse development featuring 34- and 25-storey towers, coming soon to Toronto’s Liberty Village.

“These buildings will become centrepiece additions to the

neighbourhoods where they will reside,” says Lee. “They’ll offer residents the advantages of renting, combined with the luxuries, amenities and service levels typically reserved for condominium developments.”

Investing in rental Given housing shortages in cities across Canada and demographic shifts in the marketplace, there’s a continued need for all types of purpose-built rental—from affordable to mid-level to luxury, contends Lee. But at the end of the day, for Bentall Kennedy it all comes down to delivering that strong return on investment.

“We believe multifamily assets, and in particular new-generation multifamily assets, can be a strong component of a welldiversified portfolio. Multifamily investments tend to provide a solid, stable return profile, which is an attractive investment characteristic for our investors.”

Some of the key trends in the marketplace apply to the two primary demographics: the baby boomers who are downsizing from large family homes,

and the millennials who want to live where they work and play.

“Both segments seek good quality housing, in a convenient location wherein they can remain active and connected to the surrounding community,” says Lee. Better, smarter suites Of course, when it comes to anyone’s living space, design is always important. Lee points to the shift in desire for higher quality finishes and technologyequipped suites—a trend that’s steadily gaining momentum. “At Two St Thomas, a great deal of attention has been invested in the quality of design, materials and luxury finishes by award winning architects and designers.

We have also incorporated simple, seamless technologies, like destination dispatch for the elevators, keyless entry to suites using smart phones, and smart thermostats. It’s attention to these details that set this property, and Bentall Kennedy’s overall approach to multi-residential property development, apart.”

“We believe multifamily assets, and in particular new-generation multifamily assets, can be a strong component of a well-diversified portfolio.”

Gary Lee Senior Vice President Bentall Kennedy

| www.REMInetwork.com | September 2017 | 17

COVER STORY >>

A peak inside:

Each suite at Two St. Thomas offers high-end, built-in features, including: >> stainless steel appliances >> “smart” thermostats >> custom kitchen islands >> quartz countertops >> walk-through closets >> S ALTO keyless

locking systems

>> s pacious terraces

or balconies

Despite policies such as Ontario’s renewed commitment to rent control, Canada’s purpose-built rental scene is thriving. A few recent facts: • In total, there are roughly 20,000 units under construction across the country • In Toronto, 13,000 units are in the development pipeline • In Vancouver, apartment units account for 20 per cent of all housing starts • Since 2016, Bentall Kennedy has introduced 644 units to the Canadian rental market, with another 1,000 in development

18 | Canadian Apartment | Part of the REMI Network |

Hotel-style amenities are a wellestablished trend, and Lee believes that the value placed on these amenities factors heavily into the lifestyle choices residents today are making.

“We have a large roof top terrace with outdoor lounge and fireplace on the 12th floor, two dining rooms with gourmet kitchens, and a professionally appointed fitness studio,” he says.

“There’s a luxurious lounge with a fireplace, an in-house pet spa and an automated parcel management system. Concierge service has become a staple of luxury condominiums, and Two St. Thomas will offer no less, with full time concierge services and the building professionally managed by Bentall Kennedy Residential Services.”

Another trend that’s been gaining momentum is occupant interest in the sustainability standards of the buildings

themselves. “Bentall Kennedy’s attention to the environmental performance and sustainability of our properties is a core value of the company,” asserts Lee. “There is a growing public sentiment that expects the buildings we occupy to adhere to lofty sustainability standards, empowering us to make lifestyle choices that benefit the environment, too. Two St Thomas is targeting LEED Gold designation. Every fixture has been selected to meet these demands, and every suite will have a central “master-off” switch for in-suite lighting and parking for electric cars.”

As construction of Two St. Thomas comes to a close and Yorkville prepares to welcome its newest residents, Bentall Kennedy anticipates huge payoffs--in both customer satisfaction and investor returns.

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CMHC REPORT >>

Cost-Effective Capital Investments How to Optimize Energy Efficiency, Save Money and Provide Better Light Quality

by Paula Gasparro Canada Mortgage and Housing Corporation has developed a multi-unit residential buildings (MURBs) energy and water efficiency research series, now available online. The series has been designed to provide a general understanding of the principles and practical considerations involved in implementing cost-effective energy and water efficiency measures in existing MURBs.

T

he measures have been organized from the easiest to implement to the more complex. The simple payback for each measure is fairly broad, given the wide variations in factors affecting costs and savings. Users should complete their own assessment based on actual capital costs and estimated annual energy savings for an individual measure. Where appropriate, other factors specific to individual measures have been identified in their description.

The series is intended as a guideline only and is not intended to replace professional advice. Prior to incorporating any energy or water efficiency measures into existing

MURBs, it is recommended that they be reviewed by qualified energy management professionals. All work must be performed in accordance with applicable codes and standards.

Lighting system retrofits provide opportunities to optimize energy efficiency, save money and provide better light quality. Lighting systems in MURBs must be properly maintained to ensure maximum light output and lamp life. There are a number of retrofit opportunities available that can help optimize operating efficiencies and reduce costs associated with lighting, while providing better lighting quality. Lighting technologies are

constantly improving. The services of a company specializing in lighting systems design and layout should be considered.

Importance of maintenance Preventive maintenance will improve the reliability of lamps and fixtures, maximize component life and help maintain overall efficiency as well as light quantity and quality. Most lighting system deficiencies can be prevented by: conducting regular inspections and ensuring failed lamps and ballasts are replaced; cleaning fixtures, reflectors, lenses, tubes, and bulbs regularly; and undertaking group relamping on a predetermined cycle. | www.REMInetwork.com | September 2017 | 21

CMHC REPORT >>

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In the interests of safety and security, a lighting maintenance request form should be established for occupants so that failures can be corrected in a timely fashion.

Such request forms also enable tracking of repeat failures. Where lamp or ballast failures are occurring more frequently than normal, investigate the voltage, grounding and contacts. Other important guidelines to follow are as follows: Replace failed lamps and ballasts immediately and ensure replacements meet the same specifications as the original. Be sure to match ballasts to lamp types for fluorescent or other discharge type lamp retrofits.

Maintain records of fluorescent lamp service. Undertake re-lamping when lamps have reached 70 to 80 per cent of rated lamp life to avoid light levels falling below required standards and codes and to enhance security and satisfaction of occupants.

Consult your waste management company or municipal public works department for disposal advice. Disposal of fluorescent ballasts and lamps containing mercury must be in accordance with local, provincial and federal regulations.

Ensure all lighting is in compliance with provincial building codes, municipal safety and security regulations, and CSA C22.1 The Canadian Electrical Code or the provincial equivalent. For more information on maintaining your building equipment and systems, refer to cmhc.ca.

For more information, follow us on Twitter, YouTube, LinkedIn and Facebook.

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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Industry Hot Topics Quebec’s largest mixed-use development breaks ground

D

evimco Immobilier recently broke ground on Phase 1 of Solar Uniquartier, a development that is being touted as Quebec’s largest mixed-use real estate project. The project, which is referred to as “the South Shore’s new downtown,” now accounts for an investment of $1.3 billion, which is $300 million more than the initial estimate.

The project, a joint effort between Devimco Immobilier, Fonds immobilier de solidarité FTQ, Fondaction, Devimco Investissement and a Quebec pension plan, will feature residential, commercial and office space, as well as a 184-room Courtyard by Marriott hotel in its first phase. Clients of the hotel will have access to a conference centre with four multi-function rooms with a capacity of over 1,000 people.

Solar Uniquartier meets the criteria laid out in the Metropolitan Land-Use and Development Plan – PMAD from the Communauté métropolitaine de Montréal in terms of sustainable development of the territory through densification and mixed uses in areas with easy access to public transit and active transportation.

“The buildable area in the first phase of our new project will be 650,000 square feet,” said Serge Goulet, president of Devimco Immobilier, in a press release. “The project’s innovative concept will bring future residents, workers and consumers together in a multi-use neighbourhood, giving the community the opportunity to live, work and play in the same place. The mixed-use concept will be applied starting in the first phase.”

When complete, Solar Uniquartier will feature: • 2,600 housing units • the tallest residential tower on the South Shore, featuring 245 rental units and 125 condo units • over 130,000 square feet of green space • 1.2 million square feet of commercial and office space • two hotels, a conference centre and a European-inspired sports, health and recreation complex • a public square facing the future Du Quartier light rail station “We are pleased to be a partner in an original and innovative initiative that is at the leading edge of sustainable development,” added Léopold Beaulieu, president and CEO of Fondaction. “This mixed real estate project, with its encouragement of public transit and of neighbourhood services in an eco-district, will have clear social benefits while helping fight climate change and supporting the region’s economic development, in particular through job creation.”

24 | Canadian Apartment | Part of the REMI Network |

Solar Uniquartier will be the first transit-oriented development (TOD) project revolving around Montreal’s future light-rail transit network, Réseau électrique métropolitain. It will also be the only residential project that is linked indoors to a light-rail station (Du Quartier station). This will allow Solar Uniquartier residents to reach downtown Montreal in 10 minutes.

In addition, the City of Brossard plans to broaden and extend Boulevard du Quartier by building an overpass above Highway 10 to help alleviate traffic problems. It will also feature a covered pedestrian and bicycle passageway as well as a ramp providing access to Highway 10.

“We are applying all the TOD principles with this project,” added Goulet. “The future neighbourhood is designed in keeping with innovative planning practices, promoting sustainable development and an environmentally responsible approach, with green spaces playing a central role in the project.”

Ontario introduces stricter rules for evicting tenants

T

Survey finds majority opposes home-sharing services ban

W

ith short-term rental rules on the horizon in at least two major Canadian cities, a group that monitors regulatory trends is touting the recent survey finding that a majority of Canucks oppose a ban on home-sharing services such as Airbnb.

Thirty-seven per cent of Canadians oppose a ban on home-sharing services, according to a survey conducted by Nanos Research on behalf of Consumer Choice Center. Another 23 per cent of Canadians reached by the survey said they somewhat oppose such a ban.

The survey, conducted in June and released in July, comes as Toronto and Vancouver move to regulate the burgeoning markets for short-term rentals in their jurisdictions.

“The poll demonstrates that legislators should be wary when proposing legislation that would seek to over-regulate, or ban, these services,” said David Clement, North American affairs manager, Consumer Choice Center. “When it comes to temporary accommodation, legislators should embrace home-sharing and avoid heavy-handed regulation and bans.”

Neither Toronto nor Vancouver are proposing to ban home-sharing services. They are, however, looking at limiting the practice to principal residences and introducing licensing and registration requirements.

The municipalities have acknowledged that the rise of home-sharing services has come with both benefits and drawbacks. A key concern has been that home-sharing, when done outside of principal residences, may be displacing units from the rental market, which is tight in both cities, where the cost of housing has also soared in recent years.

The Nanos Research survey found that eight per cent of Canadians support a ban on home-sharing services. Another 18 per cent of Canadians reached by the survey said they somewhat support such a ban.

Thirteen per cent of respondents said they weren’t sure either way.

Regionally speaking, a ban on home-sharing services was least popular Ontario, with 62.6 per cent saying they oppose or somewhat oppose such a ban. Opposition to this type of restriction was weakest in B.C., at 57.1 per cent.

A ban on home-sharing services decreased in popularity the older the age group, with 67.4 per cent of 18 to 39-year-olds opposing or somewhat opposing such a ban and 51.5 per cent of the 60-plus set saying the same.

The hybrid survey, conducted online and by phone, reached 1,000 Canadians and has a margin of error of plus or minus 3.1 percentage points, 19 times out of 20.

he government of Ontario announced it will be “curbing abuse of unlawful evictions” by imposing stricter rules on landlords for evicting tenants, beginning September 1, 2017.

Moving forward, when a landlord ends a tenancy so that they or a family member can use a rental unit, landlords must: • Provide one month’s rent to the tenant as compensation or offer the tenant another acceptable rental unit.

• Express intent to occupy the unit for at least one year.

• If the landlord advertises, re-rents or demolishes/converts the unit within one year, she or he will be considered to have acted in bad faith unless they can prove otherwise, and could face a fine of up to $25,000.

According to the news release, these new measures were created as a means to “help protect tenants by discouraging landlords from unlawfully evicting them, whether for conversion of the unit into a short-term rental or immediately re-renting it at a higher rate.”

The changes build on a number of other protections for Ontario tenants that were introduced under the Fair Housing Plan, including the expansion of rent control to all private rental units built on or after November 1, 1991.

Additional facts: • Under the changes, only individual landlords, not corporations, can end tenancies under the ‘landlord’s own use’ provision.

• It is an offence under the Residential Tenancies Act for a landlord to knowingly end a tenancy by giving notice in bad faith. A conviction for this offence can result in a fine of up to $25,000 for an individual.

• There are approximately 1.2 million private rental households in Ontario.

| www.REMInetwork.com | September 2017 | 25

LEGISLATION >>

Required Upgrades to Single-Speed Elevators Lifted Abandoning Modernization May Jeopardize Insurance, Maintenance Contracts

by Michelle Ervin The Technical Standards & Safety Authority (TSSA) recently lifted the requirement to undertake certain upgrades to the controls of single-speed elevators, but it doesn’t necessarily mean that building owners who operate this equipment should abandon planned modernizations.

26 | Canadian Apartment | Part of the REMI Network |

LEGISLATION >> Building owners who have contracts in place for the work are likely on the hook to follow through, while building owners who forgo the work may find their insurance and maintenance contracts in jeopardy. And statutory obligations to maintain properties in a safe condition stand, regardless of the TSSA’s decision to overturn its own 2014 order mandating upgrades by 2022 to mitigate the then-anticipated risks associated with aging single-speed elevators.

As their name suggests, these devices travel at one speed, which makes them prone to stopping a few inches above or below floor level when their brake is activated, posing a trip-and-fall hazard. Single-speed elevators, which originated in the 1950s, are typically found in older, low to mid-rise residential buildings, including condo conversions and rental apartments.

The latest TSSA order, which took effect Aug. 1, explains that the original order came out of a review launched in 2010 of the risks associated with aging elevators. Data analysis done in early 2014 by a TSSA-led risk reduction group with representation from the elevator industry and elevating device owners identified the leveling accuracy of single-speed elevators as the main risk.

The TSSA indicated in an online FAQ that the reversal of the order follows the analysis of three more years of data, in which the forecasted rise in the rate of incidents on these devices had failed to materialize.

“The risk related to these devices was not as large as previously projected and with the requisite level of maintenance, this single speed technology, that was prevalent for more than half a century, can continue in the delivery of safe vertical transportation until these elevators are upgraded,” the TSSA said in the online FAQ. The Canadian Elevator Contractors Association (CECA), however, has expressed concerns that lifting the requirement to complete what it termed safety improvement work poses a risk to riders of these devices. Following the decision, CECA drafted a form letter that members will have the option of using to ask customers to release them from responsibility for claims arising from the trip-and-fall accidents commonly associated with singlespeed elevators.

“It’s basically going to say, ‘You’re taking on the full liability for this elevator,’” said Doug Guderian, speaking as a board member of CECA. “‘If you upgrade it, that’s fine; if not, if there is one of these incidents, you hold us harmless, meaning you pay for our legal costs as well if something comes of it.’”

In cases where a trip-and-fall incident leads to a claim, both the building owner and the elevator contractor are normally named in the lawsuit, triggering their respective insurance policies. Many of these claims go through the office of Mark Jackson, president of the Insurance Market, which insures building owners as well as most of Ontario’s independent elevator contractors.

In Jackson’s experience, building owners are typically the party held responsible for incidents relating to the operation of single-speed elevators.

“It’s [the device] naturally not going to level because of the way it was designed,” he said. “In those cases, there’s nothing the elevator contractor could have done differently, so they weren’t negligent.”

Jackson suggested that the TSSA’s recent reversal could have implications for the insurance policies of building owners who eschew upgrades to the controls of single-speed elevators. Insurers may hike premiums or issue critical recommendations requiring the modernization work within a set timeframe — typically 60 to 90 days — failing which building owners could lose their coverage.

“If the TSSA is not going to mandate that, insurers that are insuring buildings with single-speed elevators are going to likely start mandating that from building owners,” said Jackson. “They’re taking on the risk of an injury related to a trip and fall, so I don’t see why it’s any different than a pothole in a parking lot.”

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| www.REMInetwork.com | September 2017 | 27

LEGISLATION >> Modernization work can take these devices out of service for anywhere from one to two months, which Guderian, president of Elevator One, noted may require residents with mobility issues in buildings with only one elevator to find temporary alternative accommodations. The cost of upgrading the controls of a single-speed elevator runs between $100,000 and $150,000, as building owners will often simultaneously make other upgrades because it’s cost-effective to do so.

The TSSA reports 55 of the estimated 700 to 1,200 single-speed elevators in Ontario have been upgraded “as a direct result of” the initial order made by the safety authority in 2014. CECA disputes this figure, claiming that roughly 50 per cent of these types of devices have undergone modernization based on a survey of its members, who represent about 80 per cent of elevator maintenance contractors in the province.

Guderian, speaking as president of Elevator One, suggested the lowerthan-expected risk level observed by the TSSA in its data could be a result of many single-speed elevators already having been upgraded and under-reporting of incidents for investigation, because the cause of their inaccurate leveling is well known.

Numbers aside, Ray Eleid, elevator consultant, Solucore, observed that corporations and REITs with single-speed elevators in their portfolio likely moved quickly to respond to the order. Meanwhile, small companies that manage one or two buildings — and that are more likely to operate these types of devices — likely held off.

“Yes, there are liabilities associated with single-speed elevators, but one thing that the owner will tell you is that they don’t break down much,” said Eleid. “That’s why they don’t feel the need to modernize, because they’re pretty simple in their circuits, so they tend to run more reliably than the newer stuff.”

In fact, these devices originally leveled more reliably, until the asbestos used in their brakes to prevent glazing was outlawed in the late 1980s, early 1990s, the elevator consultant explained.

The TSSA’s latest order comes as a private member’s bill, the Reliable Elevators Act, makes its way through the Ontario legislature. The legislation — which aims to improve the reliability of elevators old and new by setting deadlines for contractors to complete repairs — has passed the second of three readings and been referred to committee for detailed review and public input.

Despite the otherwise reliable operation of single-speed elevators, there are reasons why Eleid continues to recommend the modernization of these devices, some of which are pushing 50 years old, well past their expected 30year lifespan.

“When people trip and fall, especially elderly, they get badly hurt, so you do want to modernize these things because it’s better from a liability perspective and also from a safety perspective,” he said.

What’s more, single-speed elevators lack the additional safety brake that acts as a back-up to prevent cabs from crashing into overheads or pits, Eleid added.

The TSSA’s latest order actually continues to recommend the modernization of single-speed elevators too, but as a non-mandatory mitigation strategy.

Other non-mandatory mitigation strategies include using audible annunciation to warn riders when the cab fails to stop level and signage to caution tenants about the leveling issues associated with these devices.

If single-speed elevators are not upgraded, they will be required to undergo prescribed maintenance more frequently — at least every two months instead of every three months.

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Thermal Metering Regulations Coming to Canada How to Plan Ahead for the Stricter New Rules

by Vince Galloro

W

hile oversight of electricity and gas metering has been in place for quite some time, thermal metering has managed to remain unchecked.

But soon that’s going to change. By 2026, Measurement Canada plans to have thermal energy metering regulated in a similar fashion as gas and electricity. With the new rules on the horizon, it’s important to ensure the thermal metering set-up property owners and managers have in place today, will meet requirements around how usage is measured tomorrow.

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Think of Measurement Canada as the sheriff’s department of the utility world. While its mission is to ensure equity and accuracy where goods and services are bought and sold on the basis of measurement, its job is to come up with rules to ensure consumers are being billed fairly and accurately, and enforce the rules where providers fail to comply.

For thermal metering, this means creating and enforcing guidelines on everything from which thermal meters qualify for installation, to how thermal meters will be inspected, to who will be certified to inspect them. So far

we know that by 2021, all new installations must use approved meters, and all meter installations must be initially inspected.

By 2026, all unapproved meters must be removed from service. And while there are still details being worked out about the rollout of regulations, the best way to prepare for the upcoming regulations is to take all possible pre-emptive measures.

Managing the change Successful businesses know that in order to succeed in this ever-changing landscape, they

CMHC FEATURE REPORT>> >>

ALL APARTMENT BUILDINGS MUST HAVE A TENANT NOTIFICATION BOARD IN COMPLIANCE WITH THE CITY OF TORONTO BY-LAW 448-2017

need to be two steps ahead. When selecting a thermal metering provider, they’ll want to know that they’re taking the right steps to meet the upcoming regulations.

Every provider will have a different plan in place for how they’ll be managing the change It is now law in Toronto that certain information be posted in the lobby in regulations. If a provider is dismissive, and made readily available to tenants in one central location. or is content with complying with current For example planned and unplanned service disruptions, building regulations but doesn’t seem to have a strategy cleaning plan, major capital projects, emergency contact information for the future, it could lead to serious problems and much more! down the road. Just because a provider can install and bill for thermal meters doesn’t mean We offer bulk pricing and professional installation that include: they’re using technology that will comply with Site visit to consult with management and establish proper location future guidelines.

Delivery and installation by two technicians To protect yourself, be sure to ask your subWe also offer a large variety of stationary suitable for apartment buildings. metering provider what they’re doing to ensure their meters and practices will meet or exceed standards laid out by Measurement Canada.

Providing Renovations and Property Care Services for 20 Years Find out which manufacturer they source their meters from, and what they’re doing to ensure (905) 884-1666 their equipment is providing accurate readings. vectorcd@hotmail.com Check if they have a contingency plan in the www.vectorcd.com General Contracting event that metering equipment doesn’t comply with future guidelines. Ask if they are involved in conversations with Measurement Canada to understand what they are obligated to do.

VectorBuilding_GTA_September_2017.indd 1 2017-09-20 Will they replace meters at their own expense?

Make sure your business won’t be negatively affected by the way your sub-metering provider decides to run theirs.

Remember, it is expected that the new Measurement Canada guidelines will make the owner of the meter ultimately responsible for compliance. Regardless of who owns the meters, it’s most important to have a submetering provider you can trust, a partner who can ensure efficient and timely compliance with minimal disruption to service.

Lessons from abroad In the absence of thermal metering guidelines from Measurement Canada, one way to prepare for the future is to explore how other markets with stringent regulations have managed their transition. In Europe, a spike in demand for thermal energy led to inconsistent standards around thermal metering. In addition, each country had different certification for measurement instruments.

A lack of consistent standards in Europe quickly led to low quality equipment permeating the market, which caused a lack of confidence in thermal energy measurement. To create

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FEATURE >>

“Strict regulations will improve the quality of meters and service, and help grow demand for thermal energy metering.”

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stability in the marketplace the Measuring Instrument Directive (MID) was established so that manufacturers across Europe were required to follow one set of guidelines for certification. Of course, this change was a good thing for the thermal industry, but what did this mean for meters that were already installed?

As a business compromise, companies were given a transition period of 10 years in which they could continue installing overstocked meters that didn’t meet the new certification guidelines. In the end, meters installed before and during the transition period for MID regulations were grandfathered in. While it’s uncertain if Measurement Canada will go down the same route as their European counterpart and grandfather already-installed thermal meters, there are meters you can select with a good chance of meeting future guidelines. A relatively safe choice is a company with years of experience, such as GWF MessSysteme AG, who have developed their meters to meet European standards.

Right now Measurement Canada continues to develop the thermal metering standards and have engaged the private sector to share their thoughts and recommendations on the subject. Ultimately, the upcoming regulations will help to reinforce and add legitimacy to thermal metering in Canada. Strict regulations will improve the quality of meters and service, and help grow demand for thermal energy metering. The important thing for building managers and developers is to make sure you’re choosing a partner that is already developing best practices in thermal metering.

When you have a partner who strives to provide the best service not only today, but also into the future, it’s a lot easier to handle change.

* 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.

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This article was provided by Vince Galloro, Vice President, Installations & Operations at Enercare Inc..

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

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| www.REMInetwork.com | September 2017 | 33

INSURANCE >>

Winter Contract Season Is Here

Finalizing Service Contracts, From the Perspective of a Seasoned Claims Adjuster

by Andy Schwartze

W

ith fall suddenly around the corner, many building owners will soon be finalizing their winter service contracts. If you are one of them, remember: nothing is more important than the preserving of “subrogation” rights for the building’s insurer. Under statute law, once an insurer has paid an insured claim, the insurer has the right to demand, from the Insured, cooperation and assistance in the insurer’s attempt to recover from any outside party that may have been wholly, or partially, negligent in causing the claim in the first place, all or some of the claim that has been paid. After all, why should my insurer carry the financial cost of my claim if some other guy did something wrong and caused it in the first place? Our legal system very clearly recognizes the responsibilities that emanate from “negligent” acts, which is defined by courts as being the “failure to act prudently.” Not acting at all when we should have, is no different from doing something improperly.

34 | Canadian Apartment | Part of the REMI Network |

Building owners are, in many situations, passive investors. They turn their property over to a (presumably) competent manager and limit their management involvement to the monitoring of the manager’s performance. Where owners can often run afoul is when they fail to act upon the advice of their manager. For that, an owner can be held directly responsible and, most often, this problem arises when the manager, having recognized a problem that needs attention, is ignored by the owner who is reluctant to pay for the solution. We have many examples of this “head in the sand” attitude by owners, the most notable one being the replacement of a roof. This is not a cheap project and thus most owners are content to authorize patchwork repairs and will wait until the roof is soft and mushy before taking serious action.

While the roof issue is really one that less affects others (except perhaps those living on the top floor), very important are the areas where there is a lot of typical traffic. Parking surfaces, sidewalks, ramps and entranceways

are notable areas where maintenance neglect can lead to liability claims settlements with little chance of a successful legal defence.

These surfaces need to meet the standards that have been set by courts in past cases.

Failure to do so results in your insurer writing a cheque, once the negotiating has quickly ground to a halt. Going to court is rarely successful, so why bother? An owner’s whining about the insurer’s failure to “fight” the case is pointless—why spend more money on a futile defence? These surfaces need to be level and every knowledgeable manager knows what the standards are.

Even more important, as this represents factors that could well, at times, be beyond the owner’s (and even the manager’s) control, is how we treat the relationships between owners and outside contractors.

Nothing is more frustrating for an insurer’s claims manager, than being in a situation where recovery is blocked by a “waiver of subrogation” or watered down by an ineptly drawn services contract. In this matter,

INSURANCE >>

we want to follow some very important guidelines and we should do so with conviction and determination. Contractors of all types should be required to assume legal responsibility for their negligent acts, and this should be reflected in their contracts.

The notion of a “mutual waiver”, in respect of each side’s negligent acts, is nonsense and should be avoided. No owners should, at any time, agree to the insertion of a “waiver of subrogation” in a services contract. The logic is simple: the owner is not doing the hands on work at his/her building; this is being done by outsiders and they should bear the responsibility of their own actions.

In addition, these service contractors should be prohibited from entering the property before having provided the owner with a certificate of insurance, in acceptable format, and subject to review by the owner’s insurance advisor. Insurance certificates are another discussion entirely; many of them are downright incorrect and most who read them have little understanding of how they should be prepared so as to protect the building owner properly. Many certificates are prepared in formats that are customized by the broker who issues them. These are often of questionable legal value to the holder. The insurance industry has an agreed template that is supported (entitled CSIO—in the U.S. the corresponding template is called ACORD) by all insurers and is the template we should insist upon. Remember too, that insurance contracts cannot be expanded to draw in coverage obligations that are part of a commercial contract. However, where a contract prevents one party from subrogating another, this limitation is enforceable on the insurer affected. So, while making certain the contract protects your insurer’s recovery rights, it is also paramount that you have proper evidence, in industry accepted format, that the coverage as required of a contractor actually exists.

We tend to be somewhat careless in managing these risk factors, and there’s a very good reason for it. The vast majority of commercial deals wind up being successfully completed and without disagreement or conflict. These make us somewhat apathetic in that we often mutter to ourselves “nothing is going to go wrong; this’ll work out fine” and indeed mostly that is the case. Every now and again, however, something goes wrong and

that is when careless risk management shows its ugly, not to mention, costly side. Having a “risk” based advisor review a contract prior to signing is quick and inexpensive. Most insurance brokers (if they are experienced) will do it as part of their service to a client.

Insurance certificates are even easier to monitor. However, the important thing that must be remembered is, all this should be done before the contract is signed.

Afterwards is simply too late.

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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(416) 746-2225 services@epi-fps.ca www.epi-fps.ca | www.REMInetwork.com | September 2017 | 35

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2017-09-18 2:00 PM

FEATURE >>

The Cost of Unwanted Critters What Property Managers Need To Know About Bed Bugs

by Alice Sinia, Ph.D.

F

rom Newfoundland to B.C., bed bugs have made a resurgence across Canada, and apartment buildings are high on their list of places to call home.

Bed bugs threaten tenant satisfaction and a business’s hard-earned reputation. In about a month, two bed bugs can produce over 160 offspring with the potential to produce an additional 200 eggs each, resulting in exponential population growth. In this time, they can easily spread to neighbouring rooms or units. So, it’s important for management to understand how to detect and minimize bed bug infestations to protect their bottom line from these resilient pests.

The Draculas of the insect world, their only source of food is blood. They also prefer their meals in the dead of night and even know when you’re sleeping (by the level of CO2 you emit). What’s even more frightening is that one in five North Americans has either had a bed bug issue or knows someone who has.

36 | Canadian Apartment | Part of the REMI Network |

Bed bug detection To detect bed bugs in a building, property managers, residents and maintenance teams must be knowledgeable and know what to look out for: • Appearance: Adult bed bugs are small insects that are broadly flat, oval and no larger than the size of an apple seed (about 0.5 cm).

These pests are very thin, about the thickness of three sheets of paper stacked together.

They can range in colour from light tan to dark, reddish brown after a blood meal.

• Smell: In cases of heavy infestation, bed bugs can give off a distinctively sweet odour some say is comparable to rotting raspberries.

• Bites: Bed bug bites tend to occur in clusters or rows. They are not typically spread out across the victim’s entire body.

• Habitat: The name “bed bug” is a misnomer—bed bugs aren’t only found in beds. They do prefer staying close to their host, though, and typically shelter within a 2-metre radius of the bed in the mattress, box springs, headboard, soft furniture, outlets,

wallpaper and carpet. After a feeding, they typically leave behind tell-tale reddish brown stains on sheets and mattresses.

Bed bug treatment To manage bed bugs, there isn’t one specific miracle treatment. Here are a couple of ways you can help prevent the introduction and spread of bed bugs: • Bed bug infested furniture should be properly disposed of to decrease the chance of reinfestation.

• Most infected linens can be laundered in hot water with detergent and dried in the dryer on the highest heat setting the material will take.

This combination of heat and soap will kill bed bugs and remove any eggs as well.

• A pest management professional can use specialized equipment to heat treat affected rooms to a critical temperature for a sustained period of time. A temperature of 45 degrees Celsius will kill all bed bugs in their harbourage areas.

• You also can work with a pest management

professional to incorporate the use of special vacuums or steamer units. There are insecticide products registered for controlling bed bugs. They can be in the form of nonresidual, contact treatments or residual treatments with targeted application to potential bed bug harbourage sites such wall voids, crack and crevices, baseboards and non-upholstered furniture. These treatments should only be applied by a licensed pest management professional.

Educate your residents To help prevent infestations and ensure any bed bug activity is caught early, educate your residents. Here are a few things you should communicate to them: • Dispel common myths by letting residents know an infestation can occur within any type of building, including houses, condos, townhomes, hotels and apartments.

• Discourage residents from obtaining used furniture or sharing furniture – there is a reason furniture is left on the curb. Bed bugs

easily spread from unit to unit through walls or electrical outlets and can hitchhike a ride on a piece of luggage, on gym bags or on a person’s clothing. Anyone can pick up bed bugs on a trip abroad or even at a movie theater.

• It might be helpful to provide residents with a fact sheet about bed bugs and the best ways for them to steer clear of these nighttime menaces. These tips can be provided on an ongoing basis through newsletters, billing statements and other communications.

• Suggest residents use bed encasements on all mattresses and box springs in their home.

• Have a clear, written bed bug protocol for the building and residents, specifying the procedures for reporting a bed bug sighting, communication channel and plan of action in the event of an infestation to elicit their cooperation.

proactive steps are taken to reduce the risk of an infestation. Property managers should work with their pest management provider to create a protocol for reporting, inspecting and treating for bed bugs. By establishing an effective partnership with residents, a property manager can help keep units bed bug free.

Ongoing monitoring When in doubt about a possible infestation, The best thing property managers can do is to call a pest management professional partner with a pest control provider to ensure immediately to assess the situation.

Alice Sinia, Ph.D. is Quality Assurance Manager – Regulatory/Lab Services for Orkin Canada focusing on government regulations pertaining to the pest control industry. For more information, email Alice Sinia at asinia@orkincanada.com or visit www.orkincanada.com.

MOBILE FRIENDLY

| www.REMInetwork.com | September 2017 | 37 Midnorthern_wrongsize.indd 1

2017-07-26 2:53 PM

Smart Ideas

SPACE SAVERS How to give your tenants more, with less Cool lockers A 183-unit luxury apartment in Baltimore, Maryland, is now offering residents refrigerated lockers. Produced by Smiota, Inc., a Silicon Valley start-up company, the lockers serve as a premier service amenity, allowing residents of 2Hopkins to enjoy round-the-clock access to their shipments via smartphone.

“There has been an uptick in demand for food-delivery services, and we’ve closely observed the trends of companies, such as Blue Apron, HelloFresh and Instacart,” said Elaine De Lude, vice president of LIVEbe. “2Hopkins is using an innovative solution to conquer a real challenge, and we believe this is a state-of-the-art amenity that will provide a true benefit to our residents.”

The storage system, which debuted in August, features eight refrigerated lockers and 62 dry lockers designed to allow food deliveries to stay fresh longer. This supports the findings of a recent study by the National Multifamily Housing Council, which revealed that package management solutions are the most sought-after amenities, aside from location, for apartment tenants.

Find out more: www.smiota.com

Smaller appliances The average size of a new one-bedroom apartment in 2016 was 934 square feet—down 8% from ten years earlier, according to a report from RentCafe and Yardi Matrix. As urban city centers grow denser and apartment units shrink, developers are looking for new ways to maximize space.

That’s why Haier—parent company of GE Appliances—recently launched a suite of scaleddown appliances as part of its “Small Space Living Solutions” product line. The lineup includes an 18-inch dishwasher and a 28-inch-wide French door refrigerator.

Other offerings include: a 24-inch, 2-cubic-foot gas freestanding range; a 24-inch above-range microwave oven; a 24-inch electric cooktop; and a 24-inch single, 2-cubic-foot left/right swing “True European” convection oven.

Find out more: www.haieramerica.com/small-space 38 | Canadian Apartment | Part of the REMI Network |

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