Condo Business April

Canada’s Most Widely Read Condominium Magazine

April 2015 • Vol. 30 #2

TRASH TALK Condo garbage collection raises a bigger stink over property tax fairness

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PA R T O F T H E

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Peace, order and good governance Inducting new directors Governing shared facilities Surviving split votes

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Contents FOCUS: GOVERNANCE

14

So you’ve been elected to the board

By Robert Buckler and Warren Kleiner

18

How a board divided can remain united

By Marc Bhalla

28

Shared facilities, shared headaches?

By Josh Milgrom

FEATURES

22

'Paying double'

By Michelle Ervin

34

The dark crystal

By Clare Tattersall

DEPARTMENTS

36

Management How to handle an owner who acts abusively: A manager's perspective

By Shlomo Sharon

38

Maintenance Spotlight on: LED retrofits

By Dr. Ijaz Rauf

IN EVERY ISSUE

10 42

Ask the expert Smart Ideas

Innovative thinking. Practical results.

Structural Restoration Structural Engineering Building Science Parking Facility Design

It’s a complIcated condo world. we can shed lIght on It. our condominium practice group lawyers have expertise in the condominium market that few

Audrey M. Loeb aloeb@millerthomson.com 416.595.8196

other firms can match. our full-service legal services will help you navigate the sector’s increasingly complex ins and outs. we answer our own phones. we respect your time by providing short and practical responses.

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Condominium Group

THIS MONTH’S ONLINE EXCLUSIVES ALL THE BUZZ

East United project embraces eclectic locale A new condo development called East United will bridge than more just the block it occupies. It will bridge the eclectic influences of the surrounding Design and Distillery districts and St. Lawrence Market neighbourhood by combining new, heritage and industrial elements in a five-storey podium, 21-storey tower and six townhouses.

Barrie defers vote on condo garbage collection Barrie City Council recently passed its 2015 budget without funding for front-end garbage collection.

But that doesn’t mean Mayor Jeff Lehman’s motion to add the service has been thrown out. Multiresidential property owners could still see the city start providing or rebating front-end garbage collection this fall.

Working at heights standard takes effect in April The Ontario ministry of labour is targeting falls, the leading cause of workplace deaths and critical injuries in the construction sector, with new training requirements. The working at heights training requirements that become mandatory starting April 1 are designed to prevent falls, and ultimately improve worker safety, on construction sites.

How a purpose-built luxury rental is gaining economic viability.

FROM THE GREEN BIN

A steel-manufacturing company showcases its stormwater management project and becomes an industry frontrunner.

EXPERT ADVICE

Susan Richardson, co-founder of and principal coach at Leadership That Matters, suggests these time management tips to strike a better work-life balance.

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EDITOR'S LETTER

Associate Publisher Mitchell Saltzman

Peace, order and good governance

Peace, order and good governance

— to riff on

Canada’s constitution — are worthy goals for a condo board. These ideas sound simple enough, but how does a condo board fulfill these goals in practice?

Though parliamentarians serve under this mandate, they don’t always provide the best role models — what with the sometimes mud-slinging level of discourse in the House of Commons. If the highest lawmakers of the land face challenges in getting along in the collective interests of Canadians, what hope do condo board directors with competing views have of cooperating for the sake of their community?

Well, the Condominium Act requires that they do precisely this, as well as act honestly and in good faith, with the care and diligence a reasonably prudent person would. These criteria provide a good baseline, but if you ask industry experts, they will tell you good governance demands much more than this.

For CondoBusiness’ annual governance issue, we present a package of articles aimed at equipping directors with answers to these questions. Marc Bhalla shares how boards can survive split votes with a united front; Robert Buckler and Warren Kleiner present a primer on good governance and what else the best boards do; and Josh Milgrom offers tips for sister corporations overseeing what are often vague shared facilities agreements.

The modernized Condominium Act may address the current challenges associated with shared facilities agreements. In fact, when we asked some of Ontario’s top condo law experts what lesser known Condominium Act recommendations they hope to see the provincial government adopt, changes to shared facilities agreements was one of them.

Another Condominium Act recommendation, this one in the Association of Condominium Managers of Ontario’s (ACMO) and Canadian Condominium Institute-Toronto’s (CCI-T) joint legislative brief, is to create new property tax assessment class for residential condo units for assessment and taxation that recognizes the lower levels of service they receive from municipalities compared to single-family homes.

In Barrie, at least some condo owners currently ‘pay double’ for garbage collection — once through their property taxes and once through their maintenance fees, to hire a private hauler. In ‘Paying double’ I report on the local campaign for city service or a property tax rebate, and what’s happening in other Ontario municipalities.

It’s campaigns like these that show condo boards can rise above the politics of cynicism and personal attacks to make the lives of condo owners in their communities better.

In the next issue: Stay tuned for CondoBusiness’ first ever Who’s Who survey, a comprehensive look at major players and portfolios in the Canadian multi-residential real estate industry. If your company manages apartment and/or condominium properties, we want to hear from you. Turn to page 7 (opposite) for full details and the form you’ll need to fill out and submit.

Michelle Ervin Editor, CondoBusiness michellee@mediaedge.ca

Editor Michelle Ervin Advertising Sales Sean Foley, Robert Koven, Michelle Lumb, Stephanie Philbin Senior Designer Annette Carlucci Designer Jennifer Carter Production Manager Rachel Selbie Contributing Writers

Marc Bhalla, Robert Buckler, Warren Kleiner, Josh Milgrom, Dr. Ijaz Rauf, Shlomo Sharon, Clare Tattersall

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WHO’S WHO 2015 Multi-Residential Survey

Your participation ensures the comprehensiveness of the survey results! Don’t miss the opportunity.

Participate in two simple steps: 1. Fill out the survey 2. Fax (416-512-8344) or email (danielr@mediaedge.ca) your survey results Results will be featured in Canadian Apartment (April/May issue) and CondoBusiness (May issue) magazines.

Annual Survey of Who’s Who in Multi-Residential (Condominiums and Apartments) Industry’s Major Players and Portfolios Apartment Properties

Manage Only

Own Only

Both Own & Manage

Less than 30%

30% to 60%

More than 60%

Manage Only

Own Only

Both Own & Manage

Less than 30%

30% to 60%

More than 60%

Total

Apartment Buildings How are they distributed?

Western Canada (BC, AB, MB) Ontario Quebec Maritimes (PEI, NS, NB, NFLD) Condominium Properties

Total

Condominium Units Condominium Buildings How are they distributed?

Western Canada (BC, AB, MB) Ontario Quebec Maritimes (PEI, NS, NB, NFLD)

CONTACT INFORMATION: The following information is mandatory to participate in the survey.

This information will not be published and is only used to ensure the accuracy of your information.

Name: ____________________________________________

Title: _____________________________________________

Email: ____________________________________________

Phone: ___________________________________________

** THIS WILL BE PUBLISHED** Please ensure that you have the full name spelled correctly Company Name: __________________________________________

Signing below confirms that you have submited accurate information and that you have the authority to submit the information.

____________________________________ Authorized Signature

________________________________ Date

Questions? Contact Daniel Ross at 416-512-8186 Ext. 223 or danielr@mediaedge.ca

ASK THE EXPERT

Must-have Condo Act changes D a v id O r a z ie t t i , O nt a r io ’s m i n i s t e r of government and consumer ser v ices , recently told CondoBusiness that the province is aiming to introduce a modernized Condominium

Act this spring. While we wait for the ink on the draft legislation to dry, we asked some of Ontario’s top condo lawyers: Major recommendations aside — e.g. alternative dispute resolution and condo manager licensing — what is one critical Stage Two Solutions Report recommendation you will be watching closely for when Ontario introduces a modernized Condominium Act? Better disclosure by developers One of the report’s most important recommendations is better disclosure by developers. Developers have become very creative in downloading costs that many purchasers assume were already included in the building, such as amenity rooms (historically these costs were included in the purchase price).

Developers argue that the issue is buyer beware, but not many people can understand the extremely lengthy disclosure statement and it would cost thousands of dollars in legal fees to have a professional review it properly.

While at some point disclosure will be sufficient and purchasers must take responsibility for their actions, in my opinion we are not nearly there yet.

Armand Conant, partner, Shibley Righton LLP

A TIMELINE OF THE CONDOMINIUM ACT REVIEW Fall 2012: The Ministr y of Consumer S er v ic es l aunc hes O nt ar io’s three stage Condominium Act Review. Its g o al: Bring residents and business experts together to identify issues and recommend ways to modernize the Act, which was last updated in 1998.

Winter 2012: With stage one complete, Public Policy Forum, leader of the review process, releases a repor t based on public feedback identifying governance, dispute resolution, finances, consumer protection and condo management as five key themes.

10 CONDOBUSINESS | www.condobusiness.ca

Su m m e r 2013: T hen - Minister of Consumer Services Tracy MacCharles announces that the G overnment of Ontario will be introducing mandatory qualifications for condominium managers, given the apparent broad based support for such a move.

ASK THE EXPERT

“Mandatory training courses would provide

first time directors with the essential fundamentals in order to govern a condominium.”

Make it easier to pass bylaws At present, bylaws are commonly defeated because less than the 50 per cent-plusone units required for an absolute majority vote are represented at owner meetings — even if the board has undertaken a proxy-collecting campaign. The function of a condominium corporation should not be so impaired.

The report proposes three alternatives. I recommend the second: that a bylaw could be confirmed by a vote of two-thirds of owners at a meeting called for that purpose, provided that a regular quorum of 25 per cent of units is present or represented. In my view this balances the gravity and importance of registered bylaws with the flexibility that easier amendment provides.

John A.A. Deacon, senior partner, Deacon, Spears, Fedson + Montizambert Education for new directors The report acknowledges the difficulty many new condominium directors face when joining a board when they have little or no previous experience. Inexperienced or uneducated directors lead to poor decision making which creates risk for a condo community. The recommendation for mandatory training courses would provide first time directors with the essential fundamentals in order to govern a condominium and enhance director professionalism.

Mario Deo, partner, Fine & Deo Prohibit deferral of first-year costs, selling or leasing back normal common elements The recommendations to prohibit developers from deferring reasonably foreseeable first-year costs and from selling or leasing back to the corporation assets normally deemed common elements can easily be read together. They go to the ability of a new condominium board to focus on building a strong and vibrant community.

Condominium corporations frequently face increases in common expenses during their second year of operation; however, if this becomes excessive due to lease back arrangements or deferred cost structures, owners often “incorrectly” focus their blame on the volunteer board — potentially creating distrust of the board and diverting time, energy, and money away from the real priorities after turnover (such as construction deficiencies).

Richard A. Elia, senior lawyer, Elia Associates

F a l l 2 013: S t a g e t wo c o m e s to a close with the release of a solutions rep or t making more than 10 0 re c o mm e n d at i o ns . T h e re p o r t w a s w rit ten by an ex per t panel, whose members headed up five working groups devoted to tackling the five key themes.

L a te 2013 to e a rl y 2014: In stage three, P u b lic Po lic y F or um retur ns to the broader stakeholder groups to solicit feedback on the expert panel’s recommendations.

January 2014: Ontario’s Condominium Act review concludes. The next step is for the provincial government to review the recommendations and feedback, and draft a new Condominium Act.

April 2015 11

ASK THE EXPERT

Changes concerning shared facilities disputes We will be monitoring closely any changes pertaining to shared facilities disputes (page 31 of the report). As condominium projects grow more complicated, it is becoming impossible for volunteer boards, and even most residential property managers, to operate effectively within increasingly complex shared facilities and reciprocal obligation arrangements. These can include the sharing of facilities with large commercial units or freehold parcels, sometimes at the unfair expense of residential unit owners. Almost no consultation input was received from interests representing either new purchasers or commercial unit owners, both of whom are directly impacted by such arrangements.

Patrick Greco, partner, Miller Thomson LLP & Audrey Loeb, associate counsel, Miller Thomson LLP Mediation/arbitration for disputes involving tenants I will be watching to see whether the new legislation will create a procedure for dealing with disputes involving tenants. Under the current legislation, section 132 (mandatory mediation/arbitration) does not apply to disputes with tenants. The Court of Appeal has confirmed this as well (see Nipissing Condominium Corporation No. 4 v. Simard 2009 ONCA 743 CanLII).

Condominiums have been able to go directly to court to obtain a compliance order when a tenant breaches the rules, bylaws or declaration. It will be interesting to see if the legislation closes this loophole and mandates mandatory mediation and arbitration prior to a court application with respect to compliance issues involving tenants.

Sonja Hodis, condo litigation lawyer, HODISLAW “Standard unit” definition A critical recommendation from the Stage Two Solutions Report is the recommendation to include a default “standard unit” definition that applies to all condominiums. Insurance is a key issue that we deal with on a daily basis. Frequently, issues arise when a condominium does not have a standard unit bylaw or a schedule (from the developer) setting out the standard unit definition. A base definition of the standard unit, which could be amended by bylaw, would provide clarity, and reduce disputes between condominiums, owners and insurers when it comes to determining the responsibility for repairs to a unit after damage.

Nancy Houle, partner, Nelligan O'Brien Payne LLP

Consumer protection measures I’ll be watching for consumer protection measures to address the most egregious shady practices utilized by some developers.

Key recommendations include invalidating declaration clauses excusing developers from paying common expenses on unsold inventory; mandating a dispute resolution process for shared facilities created without a cost-sharing agreement; and prohibiting developer-controlled condo boards from releasing developers from construction warranties.

It’s important because purchasers are unwilling or unable to identify and protect themselves from major pitfalls like these and our courts will not intervene because the facts were disclosed to purchasers upfront. Stronger legislative protections are desperately required.

Christopher J. Jaglowitz, lawyer at Gardiner Miller Arnold LLP

A TIMELINE OF THE CONDOMINIUM ACT REVIEW May 2014: Ontario unveils its budget, highlighting plans to modernize the C ondominium Act, and specific ally, establish a modern dispute resolution system and mandator y qualifications for condominium managers. But the opp osition par ties pull the plug on Kathleen Wynne’s minority government.

The election puts everything in limbo.

June 2014: The Ontario Liberals are reelected with a majority, meaning they can reintroduce and pass their budget without suppor t from the opposition parties.

12 CONDOBUSINESS | www.condobusiness.ca

February 2015: David Orazietti, the new minister of government and consumer ser v ices, tells C ond o Business in a phone interview that the new goal is to introduce a modernized Condominium A c t dur in g the l e g isl ature’s s p r in g session, which runs from Feb. 17 to June 4.

ASK THE EXPERT

“A base definition of the standard unit, which could be amended by bylaw, would reduce disputes between condominiums, owners and insurers.”

MJW_halfPage_island_V2_BLEEDS.pdf

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2015-03-12

12:02 PM

Cost disclosure in first year budget Management and board members of new condo corps often deal with irate unit owners when common expenses increase substantially in the second year of registration.

The problem stems from a developer’s right to establish a first year budget which doesn't reflect known expenses that kick in after the first year.

Unit owners commonly do not do a thorough review of budgets when they purchase to fully understand the impact of deferred expenses.

The recommendations dealing with consumer protection address this issue.

The recommendations include prohibiting developers from deferring C costs from the first year and requiring the disclosure in the first year budget Mof all costs and expenses.

Y Denise Lash, partner, Aird & Berlis LLP CM

MY

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What’s ahead: The first look Ontarians get at the modernized Condominium Act will be just that — a first look. The draft legislation will still have to go through three readings, including commit tee review, where lawmakers may hold public hearings and consider making amendments. Even then, it may be some time before the legislation takes effect. The Condominium Act, 19 9 8, wasn’t proclaimed into force until 2001.

For the time being, the current Act (1998) remains in effect.

April 2015 13

GOVERNANCE

So you got elected to the board …

Now what?

A first-time condo board director has much to learn post-election. Simply put,

BY ROBERT BUCKLER AND WARREN KLEINER

these “newbies” don’t know what they don’t know.

There are a number of impor tant questions to address right away: How does a director carry out good governance? What obligations, risks and protections come with the role of a board member?

What follows are answers to these questions, based on the framework of governance outlined in the current Condominium Act and common corporation bylaws, along with some practical tips.

Obligations Section 27 of the Condominium Act sets out that the board of directors shall “manage the affairs of the corporation.” This includes maintaining and repairing the common

elements and providing certain services for the benefit of the owners and residents.

(Services will vary from condominium to condominium.) These activities require the board to budget for all of these anticipated expenses, accounting for known increases for such items as utilities, multi-year contracts and payroll.

In carrying out these duties, directors must uphold the “standard of care” spelled out in the Condominium Act. Specifically, section 37 of the Act requires directors to act honestly and in good faith, and exercise the care, diligence and skill that a reasonably prudent person would.

14 CONDOBUSINESS | www.condobusiness.ca

Act honestly and in good faith It is often easy for directors to forget that they were elected “by the people for the people.” It is important for directors to serve owners selflessly rather than to fulfill their own agenda. This maxim, embedded in the Condominium Act, requires directors to prioritize the interests of the owners and the corporation over their personal interests.

Acting honestly means that, as caretakers of the maintenance fees collected from owners, directors are in no way benefitting financially from their responsibility. As a matter of good governance, some boards have enacted a bylaw requiring directors to comply with a code of ethics addressing

GOVERNANCE

lack the time and management experience to oversee day-to-day operations despite their professional or work experience. As a matter of good governance, most condominiums retain the services of a professional condominium management firm.

M i c ro - m a n a g in g m a n a g e m e nt i s generally not considered good governance.

However, effective self-management in smaller condominiums, though more burdensome, may also result in good governance.

Risks and protections Remember that board members may not act unilaterally and, for the most part, all decisions must be made by the board at properly constituted board meetings. At any other time, board members are solely owners. Board members need to feel that they can speak freely in meetings with the strict expectation that what is discussed in a board meeting stays in the board meeting. As such, board discussions and disagreements are normally confidential

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matters such as personal gain and breach of confidentiality as well as grounds for disqualification.

Exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

New board members should make every reasonable effort to attend board and owners meetings. Not only should board members make every effort to attend all meetings, but they should also be wellinformed on issues and agenda items in advance of meetings to fully and effectively participate in the decision-making process.

Good governance is not only about making the “right” decisions, but also about following a process to make decisions on matters that are before the board in the best interest of the corporation. A director has one vote on the board. Directors will sometimes disagree with the decisions made, but, once made, all directors should abide by and support the decision of the majority.

If a corporation has professional management, the manager normally executes the board’s decisions. Although responsible for managing their corporation’s affairs, volunteer board members usually

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April 2015 15

GOVERNANCE — even though the Act doesn’t require it. Revealing sensitive information to others often causes or fans problems within the community.

Board decisions or resolutions are, subject to cer t ain exceptions, not considered confidential and remain publicly available since they are documented in meeting minutes. Good governance includes preparing proper meeting minutes and ensuring they are readily available to owners upon reasonable request.

Maintain good communication with owners by keeping them up to date on what is going on in their condominium.

Distribute newsletters, hold regular owners’ information meetings or town halls, and generally make sure that owners feel that their interests are being heard and considered. The expression “no news is good news” does not apply in condominiums when it comes to informing owners, as they usually interpret silence with suspicion that “something is up” and they don’t know about it!

Condominium owners have an inherent right to examine the records of their corporation. The Act sets out which records

corporations must keep, but the right to examine records extends to all of the corporation’s records, and not those just set out in the Act, subject to certain exceptions which are also set out in the Act. Most corporations have bylaws in place that protect, indemnify and hold harmless directors for any liability the director incurs in relation to the affairs of the corporation (per section 38[1] of the Condominium Act). Section 39 of the Act also requires that, if available, a corporation must secure insurance to protect the board of directors against liability. The only exception to this is liability incurred as a result of a breach of the duty to act honestly and in good faith. Failing to act honestly and in good faith can expose a director to significant personal liability.

Even if they think they have expertise, volunteer board members are compelled to follow the advice of professionals — lawyers on legal questions, accountants on finance questions, and so on. The Act specifically provides that a director will not be liable for a breach of the standard of care where the director relied in good faith upon a report or opinion of a professional whose expertise lends credibility to the report or opinion.

The above framework of good governance, and the obligations, risks and protections that come with it, will hopefully better equip first-time directors to serve their condominium community. Keep in mind that practicing good governance never ends. It is something that directors should always strive to improve on. If possible, take directors’ courses and read articles related to serving as a board member. 1

Robert Buckler, founder of Beredan Management & Consulting Inc., is a condominium consultant. He is also a broker with Century 21 Heritage Group, and an instructor for the OREA Real Estate College and the Association of Condominium Managers of Ontario.

Warren Kleiner, a partner in the Toronto office of Miller Thomson's Condominium Practice Group, with a broad practice in commercial and residential real estate and a specialty in condominium law. He primarily represents condominium corporations and development projects, as well as commercial real estate clients.

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GOVERNANCE

How a board divided can remain united Ideally, board meetings proceed

BY MARC BHALLA

w it h respec t a nd decor u m, where directors discuss issues and provide direction in a civilized manner. In some condominium communities, the boardroom is treated more like

a battlefield.

18 CONDOBUSINESS | www.condobusiness.ca

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Set healthy boundaries Even in war, rules apply. Establish a common understanding of what they are and how alleged violations will be addressed. While directors will have their own opinions, an example of a healthy boundary may be to avoid personal attacks in the boardroom.

Address concerns about a perceived bully or intimidator outside of the heat of the moment — ideally, in front of it. Of course, everyone should agree on the rules beforehand for them to be effective.

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Find common ground When helping parties with opposing views, any mediator’s primary goal is to find common ground. Quarreling parties can most easily achieve progress by jointly focusing their attention on the same thing.

For a condo board, this should be straightforward — the community comes first.

Set the tone by recognizing that everyone in the boardroom is putting the condo corporation (as a separate, legal entity) first. When directors share this common goal of advancing the best interests of their overall community, they put themselves in a better position to examine the different views everyone brings to the table. This framework can help foster a healthy environment for debating the merits of various options — even if a decision is ultimately made by a 3-2 vote.

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Condo business can only officially be conducted at duly constituted meetings, so it is there that directors may feel that they must choose their battles and stand their ground. (What’s the point of being on the board if directors are not going to express their opinions, or at least try to stop their condo corporation from making what they feel is a mistake?) Certainly, if there is any place that a director should speak up, it is not at the annual airing of grievances by owners (the annual general meeting) but rather in those monthly battles where business is transacted.

Conflict in the condo environment is bound to arise when many different people all live under one roof, each with their own take on what is logical and sensible. The differences Canadians celebrate may also give rise to the misunderstandings and assumptions that breed feelings of ill will.

At the board level, this is no different. Most condos have an odd number of directors for good reason. The very concept of boards operating as a ‘fourth level of government’ is based on democracy — not consensus or dictatorship. Everyone gets an equal vote and the majority rules.

The reality that board meetings present the time for directors to speak up and that directors are not always going to see eye to eye can give rise to stress and tension. In many ways, this stress and tension is similar to the anxiety people face as they prepare to take part in mediation.

When people know that they are going into a meeting with someone who is likely to disagree with them, it can make them anxious. Yet, just like in mediation, there are steps directors can take to ensure the meetings are productive and everyone feels comfortable:

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Put process over position People can often preserve relationships in the course of negotiations by focusing on interests instead of options. Directors on a divided condo board may find it helpful to step back from what they each think is the best position and first determine the best process for making the right choice for their community.

Consider strategies such as deferring to professional advice or circulating a request for proposal (RFP) to compare options in an “apples-to-apples” manner. If the board can establish objective criteria or a formula for making a decision, it can be easier to reach a difficult conclusion. What’s more, any dissenting directors who do not get their way will understand why.

Agree to disagree There is rarely only one item on the agenda at a board meeting, and even rarer is the board that likes four-hour meetings.

Discussion can be good; however, there must come a time when the board needs to Percel_Condo_March_2015_FINAL.pdf make a decision and move on.

Agreeing to disagree, casting votes and proceeding to the next item of business can prevent directors from dwelling on conflict or harbouring ill will. If directors feel it necessary, they can ask that their concern be documented in the minutes, but again, it’s important to move on — there are other items that the board still needs to address for the community.

1

Stand united Directors can get themselves in trouble by violating the confidentiality of the boardroom setting — for example, by par ticipating in gossip or spreading rumours within a community. When a board makes a decision, directors need to recognize that they are members of that board, whether they personally voted for or against a particular decision. Have open discussions and consider different perspectives in the boardroom; however, when the meeting is over, the board should speak with one voice.

Be a team player and stand by fellow 15-03-16 8:37 AM directors. Strong boards are united and

there is no better way to strengthen the team than to stand together in the face of adversity. Dissenting directors should support fellow directors when the majority votes against their own preferred course of action and they will be more likely to act in kind.

Being a c o n d o m i niu m d i re c to r i s a challenging — and sometimes t h a n k l e s s — j o b . H o w e v e r, n o c o n d o m i n i u m d i r e c to r i s a l o n e . I f n o t h i n g e l s e , d i re c to r s h a v e t h e i r fe ll ow d ire c to r s . D ire c to r s a re n ot ex p e c te d to al ways a g re e; in fa c t , they should expect fellow directors to bring different perspectives to the table. There are healthy approaches to split votes and ways to go about both making difficult decisions and moving on that promotes harmony and nurtures a condo’s sense of community. 1 Marc Bhalla leads the C O N D O M E D I ATO R S . c a t e a m . H e fo c u s e s h i s m e d i ati o n p ra cti c e o n condominium conflict.

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COVER STORY

‘PAYING

BY MICHELLE ERVIN

The City of Barrie may soon join the company of Ontario municipalities such as Toronto that either rebate or provide front-end garbage collection to condos.

It’s a move that gets at the heart of a broader issue: the perceived unfairness of condo owners across the province being assessed at the same rate as singlefamily homeowners for municipal property tax purposes, despite the contention that they receive fewer and lower levels of service.

COVER STORY

DOUBLE’ April 2015 23

COVER STORY

“That’s an incremental cost we wouldn’t

have, or shouldn’t have, given the ratepayers in our building are all paying for city collection. That’s like a tax on living in a high-rise.”

The Barrie case This past February, Barrie Mayor Jeff Lehman requested that front-end garbage collection service for multi-residential properties be added to the city’s 2015 budget. Currently, Barrie provides only curbside pick-up, forcing owners living in high-rise and townhouse condo buildings that require trucks with bin -tipping capability to hire private waste haulers.

The result, according to a petition from local condo corporations, is that owners are ‘paying double’ for t h e s e r v i c e — o n c e t h ro u g h t h e i r property taxes and again through their maintenance fees. The petition called on the city to either provide garbage and recycling collection through its contracted hauler or rebate fees paid

by the condominium corporations for private waste haulers.

Gary Lyon is a director at the Bayclub, one of the local condo corporations that circulated and submitted the petition.

Lyon estimates that his condo corporation now pays $ 4,000 annually to have a private hauler provide front-end garbage collection.

“Obviously that’s an incremental cost we wouldn’t have, or shouldn’t have, given the ratepayers in our building are all paying for city collection,” he said.

“That’s like a tax on living in a high-rise, which obviously we don’t like and was the basis for our original petition.”

Barrie condo owners have found a champion for their cause in Mayor Lehman, who previously served as the

24 CONDOBUSINESS | www.condobusiness.ca

councillor of a ward that captures the city’s historic downtown and waterfront, where many of its high-rise condos are concentrated.

He will require support from his council colleagues, some of whom are less sympathetic to the cause, to provide or rebate front-end waste collection to multiresidential properties. For now, council is holding off on a decision until city staff present a preferred implementation plan, due this summer.

Staf f have already indicated a preference for providing the ser vice in their most recent report. They have also recommended that, if offered, the rebate be capped at $21.53 per multiresidential unit. (Staff pegged private garbage pick-up costs at a rough range

COVER STORY

of $14 to $32 per multi-residential unit, based on conversations with building owners and managers.)

Elsewhere in Ontario Ernie Nyitrai is a board director at one of the 12 Markham condos that, some 20-odd years ago, lobbied for and secured an annual rebate on the waste collection portion of the property tax bills of their unit owners. His share of the rebate, calculated in the same proportion as his maintenance fees are, works out to about $87 per year.

For Nyitrai’s condo board, the unfairness of unit owners paying double for garbage collection illuminated a much larger issue.

Unit owners were also paying property taxes at the same rate as single-family home owners, despite receiving lower levels of service from the city.

The Municipal Act, however, sets out that property taxes are based on assessment rather than use of services.

As examples, car-driving homeowners can’t opt out of paying towards public transit and childless homeowners can’t opt out of paying towards the public school system.

Nyitrai is careful to distinguish between these soft services and the measurable hard services that cost the municipality les s to d eli ver to multi - resid enti al properties. Condos have a more efficient building footprint, meaning they demand less road, sewer and street light work. His focus is on those roads, sewers and street lights as opposed to buses and schools.

Calls for reform A fe w ye a r s a g o , N y i t r a i ’s b o a r d approached the then-Town of Markham for support. In 2010, following work by an ad hoc group of city staff, politicians and residents, Markham council passed a motion calling on the province to empower municipalities to create a condo-specific tax rate. If granted — it hasn’t been to date — the authority would still ultimately be up to individual municipalities to exercise.

“The easier of the two tasks probably would be to get the province to enable municipal government to do this,” said Nyitrai. “More difficult would be to go to the municipality and argue what the tax rate should indeed be.”

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board Nyitrai also sits on as a director representative, has carried the issue forward. In a joint legislative brief to the O nt ario Ministr y of C onsumer Ser vices, CCI -T and the Association of Condominium Managers of Ontario (ACMO) recommended that the provincial government amend the Assessment Act and Municipal Act to, for the purposes of assessment, recognize high-rise and townhome condos as two distinct and different categories of property from singlefamily homes.

A Ministry of Government and Consumer Services spokesperson acknowledged in an email that the ministry had heard this suggestion from a few sources during the Condominium Act Review.

“As with all of the other input we received during the review, we are considering this idea and have also shared it with relevant ministries,” said the spokesperson.

Meantime, Ontario municipalities must operate within the current legislative regime.

‘Moving in the right direction’ Whether intentionally or not, the City of Ottawa’s waste collection program appears to address the garbage pick-up issue from both angles.

Ot tawa provides containerized collection to about 100,000 units spread across 1,000 multi-residential buildings, according to Marilyn Journeaux, manager of Solid Waste Services. The city also charges multi-residential homeowners for containerized collection at a lower rate than single -family homeowners for curbside collection — $35 per year compared to $86 per year. This is due to precisely the economies of scale Nyitrai highlighted.

“Let’s say a high-rise has 300 units in it,” said Journeaux. “We’re only doing one stop once a week, so the service is cheaper as opposed to driving to 300 individual homes and stopping 300 times to pick up that material.”

Back in Barrie, Mayor Jeff Lehman is pushing for an Oct. 1 start date for the city to either roll out or rebate frontend garbage collection for condos. His proposal faces a final hurdle in the form of a council vote after city staff report back to general committee in July.

S aid Lehm an: “It ’s not over yet , but at least we’re moving in the right direction.” 1

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Shared facilities, shared headaches?

Bowling alleys, guest suites,

BY JOSH MILGROM

basketball courts, and movie theatres...

It all sounds great, so why the commotion about shared facilities?

Shared facilities vary widely, and can also include less alluring items, such as underground site services, roadways, and mechanical rooms. Oh, and there is typically a committee that manages, g ove r n s , a n d o p e r a te s t h e s h a re d facilities, composed of directors from each of the sister corporations. The condo corporations are par ties to a

28 CONDOBUSINESS | www.condobusiness.ca

shared facilities agreement (sometimes called a reciprocal agreement or cost sharing agreement), which sets out the parameters of their legal relationship.

Ta ke a g l i m p s e a t o n e of t h e s e a g re e m e n t s , a n d i t ’s e a s y to s e e how headaches can arise. These agreements typically define the shared fa c ili tie s (al b ei t , s o metimes r ather

GOVERNANCE

vaguely), allocate costs (oft in sparing detail), explain the role and composition of the shared facilities committee, and outline a dispute resolution mechanism, just in case (or when) the parties refuse to play nice. T he dispute resolution procedure tends to include good faith negotiations, followed by an all boards meeting, mediation, and lastly, binding arbitration.

Disagreements Shared facilities agreements are generally draf ted long before a developer breaks ground on a condo p r o j e c t . S o w h e n t h e d e v e l o p e r ’s l aw ye r d r a f t s t h e s h a re d f a c i l i t i e s agreement, many items may remain unset tled or unknown. Outst anding questions may include what facilities will actually be built, how they will all interact with each other, or how they ought to be shared. T he number of units may change; even the number of buildings may not be set in stone. All

of these variables can shape the future shared facilities and the potential for disagreements.

T he shared facilities agreement spells out how the shared facilities commit tee must make decisions — t y pic ally by either unanimous or majority approval. Where agreements require unanimous approval, disputes can arise from a simple deadlock on an issue. Conversely, where majority rules, the minorit y may be bullied or have their interests downplayed or ignored.

In these circumstances, there is little the minority can do except trigger the dispute resolution procedure.

The management of shared facilities can also breed significant disputes.

When deciding whether to retain an independent manager or one of the sister corporations’ managers, the committee m ay c onsid er a variet y of fac tors, including the size of the shared facilities, its budget, and the format originally established by the developer. Where one

of the sister corporations’ managers also manages the shared facilities, there may be an actual or perceived bias, leading to significant disputes.

Yet the most c ommon source of disputes over shared facilities is money; how much each corporation s h o u l d c o nt r i b u te, w h a t ex p e n s e s a re to b e s h a re d , o r w h et h e r t h e p a r t i e s s h o u l d b e re s p o n s i b l e fo r back charges and interest. It would be next to impossible for the shared facilities agreement to outline ever y potential shared expense.

As a result, agreements are subject to inter p ret atio n an d d is p u tes w ill l i ke l y c o nt i n u e to a r i s e ove r c o s t contributions.

Consequences Cost contributions were at the centre of the dispute in TSCC No. 14 87 v.

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years. Once TSCC 1487 became aware of the agreement, it also discovered it was entitled to significant amounts owing from Market Lofts Inc. dating back to 2006. (The action commenced in 2013.) Market Lofts Inc. refused to pay when TSCC 1487 demanded payment, claiming that the parties had a mutual understanding that costs would be shared informally.

The shared facilities agreement provided that if a party defaults, the non- defaulting party has a lien enforceable in the same manner as a mortgage. This provision, which exists in many shared facilities agreements, appears to have played a significant role in the court’s decision.

M ar ket L of t s In c . arg u e d th at a g ener al t wo - ye ar limitation period (under the Limitations Act) should apply, which would prevent TSCC 1487 from recovering amounts that were incurred more than two years prior to the claim.

However, since the default was secured by a lien, the court found that, instead, a 10 -year limitation period under the Real Property Limitations Act applied. As a result, TSCC 1487 was entitled to all of the outstanding arrears, dating back to 2006, and was successful in recovering more than $160,000 (including more than $50,000 in interest).

T he c ase ultimatel y highlighte d the imp or t ance of understanding, relying on and enforcing1 the provisions of Davroc_Condo_March_2014_FINAL.pdf 14-03-18 10:14 AM shared facilities agreements from the outset.

Relationships Given the many challenges of governing shared facilities, sister corporations should make a concerted effort to start their relationship off on the right foot: Read and enforce the agreement In certain circumstances, it may seem more expedient and simple for condo corporations to share costs or manage the shared facilities informally, without referring to the shared facilities agreement. While this practice may work well while the relationship is good, or where one manager oversees the entire complex, circumstances and relationships can change quickly. Before long, one of the sister corporations can turn around and allege a party’s failure to comply with the agreement and claim years’ worth of back-payments and interest, resulting in headaches, budget shortfalls, and disputes.

As a first step, each corporation should become familiar with the scope of the agreement, understand how costs are shared, how decisions are made, and the rights and obligations of each party.

Resolve issues proactively Left unresolved, tensions rise and disputes can escalate to a point of no return. Allow parties to express ideas freely, and maintain a positive relationship by raising concerns before they morph into disputes. Even if the issue can’t be resolved, the environment fostered through open communication can be a significant benefit. After all, once the dispute is resolved, the representatives have to continue to work together.

Leave emotion at the door The representatives should try their best to prevent emotion from clouding their judgment. A lways keep in mind that the relationship will, quite literally, last forever. What is fair does not govern the shared facilities relationship, nor does it necessarily prevail. Rather, the relationship is governed by what is outlined in the agreement itself. Unless it’s relevant to the agreement, parties should try not to get hung up on which party appears to benefit most or within which building the shared facilities are located.

Similarly, par ties should refrain from taking irrational or overly aggressive positions in a dispute; this has the risk of inflaming the situation and virtually guaranteeing the failure of the informal dispute resolution mechanisms. To help resolve disputes, parties could attempt to remove subjectivity from the cost equation — for example, by separately metering utility use or obtaining separate quotes for services.

Recognizing the potential for disagreements — and their consequences — consider these relationship -building steps preventative medicine for the headaches shared facilities agreements can cause. 1

Josh Milgrom is an associate in Aird & Berlis’ condominium group. His practice is focused on advising condominium corporations on all matters relating to the Condominium Act.

30 CONDOBUSINESS | www.condobusiness.ca

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MANAGEMENT

How to handle an owner who acts abusively: A manager’s perspective

BY SHLOMO SHARON

It is common

for a condominium corporation to have an owner who is unhappy with whatever is being done in the building, and always criticizes things and insists that things should have been done differently. This same owner may even sometimes complain about his fellow residents.

Complaints and criticism are one thing, and can certainly be valid. Sometimes, however, an owner crosses a line, acting abusively towards the management company’s employees, the board, and other residents. Abusive behaviour can take the form of threatening e -mails and foul language, and in some instances can get physical.

As the condo corporation’s governing body, the board is responsible for dealing with owners who act abusively.

O f ten, an ow ner w ho a c t s a busi vel y is lo ok in g for a reaction. If the board keeps the following tips in mind when responding to an owner who acts abusively, it has a better chance of defusing the situation.

Set rules If owners want to raise their concerns at a board meeting or annual general meeting (AGM), it’s important to set ground rules.

Ad vise owners that they c an make arrangements to present their concerns at the next board meeting, but attach a time limit to their presentation. Likewise, provide AGM

32 CONDOBUSINESS | www.condobusiness.ca

MANAGEMENT

attendees with rules of conduct before the meeting.

If owners interrupt, the chair can tell them they can’t be heard at that time, as the meeting must proceed according to the agenda. However, these owners should be told that they will have a chance to speak at the appropriate time.

Establish zero tolerance for foul or abusive language.

tries to control the meeting, the ow ner m ay esc al ate the disrupti ve exchange and force the chair to end the meeting. Remember that meetings are conducted in accordance with an agend a, and the chair should keep the meeting on track. If the disruption occurs during the “Other Business” s e c t i o n o f t h e m e et i n g , t h e c h a i r should stick to the facts and avoid the emotional aspect.

Stay calm, stick to the facts If an owner uses foul language in letters, Ensure safety e-mails, or phone calls to board members, Given the risk that abusive behaviour management staff, contractors or other c an turn physic al, it ’s imp or t ant to owners, tell the owner to stop. However, ensure everyone’s safety. leave emotion out of it. One way of doing If an owner continues to be this is to simply say, “Your point has been disruptive during an AGM, the chair noted and the matter will be considered.” should not hesitate to ask that owner A sk the ow ner (s) to refrain from to leave the meeting. The board should calling or suggest they take a different also advise the owner that the issue approach. It is very important that the was noted and will be reviewed by the board members and management staff board at a different time. never threaten owners.

If a disruptive owner refuses to leave If an AGM chair reacts emotionally the meeting, call security TorontoDecorating_Condo_March_2015_FINAL.pdf 1 15-03-03 11:49 AM and/or the t o a n o w n e r w h o s t a n d s u p a n d police. As a last resort, this measure

should only be used if the owner has refuse d to c ompl y w ith the chair ’s direction. Sometimes, if the board is aware that an owner(s) might tr y to disrupt a meeting ahead of time, it may want to consider hiring a security company to be present, just in case.

It is important to keep a record of all the telephone calls, e-mails and letters that contain any harassing, abusive, or threatening comments. Ultimately, if an owner continues his or her abusive behaviour, the board should have the corporation’s law yer send that owner a letter.

Boards and management should always welcome an owner’s legitimate concerns, even if it is coming from the same person time and again. However, it is important to distinguish between a chronic complainer and an owner who resorts to unacceptable behaviour. 1 S h l o m o S h a r o n i s C E O o f Ta f t Management Inc. He can be reached at shlomos@taft-forward.com.

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MANAGEMENT FEATURE

The dark crystal It was an explosion that rocked not just a building but its community. On Nov. 17, 2014, emergency crews responded

BY CLARE TATTERSALL

to a call from a condominium in the trendy Liberty Village area of Toronto, known as a housing hotspot for young professionals. Upon arrival on the scene, firefighters found windows and elevator doors blown out, and a fire contained to a sixth-floor unit. Inside was a 36-year-old man with minor burns to his face and hands who, shortly thereafter, was charged with possession for the purpose of trafficking, in connection with the explosion. Police allege the condo unit was being used as a methamphetamine drug lab.

This isn’t the first incident of its kind in a multi-residential building. In August, a blast ripped open the second floor of a townhouse complex in London, Ont., causing an estimated $500,000 in damage. After dousing the flames, fire officials found the remains of a suspected meth lab. Most recently, an explosive fire in a Brampton, Ont., apartment highrise sent one person to hospital. Police allege the injured party was making meth at the time of the blast.

Meth labs are a growing problem across the country, particularly in British Columbia and Ontario. According to a report by the United Nations Office of Drugs and Crime (UNODC), Canada is a leading exporter of the illicit drug.

34 CONDOBUSINESS | www.condobusiness.ca

FEATURE

While highly organized “super labs” are primarily responsible for producing the large quantities of meth required for export, the smaller makeshift labs found in multiresidential dwellings are of greater concern.

Not only are they more common but they account for far more explosions and fires.

Why? Quite simply, the meth producers are amateurs.

“They’re ‘cooks’ not chemists,” says Randy Moss, assistant deputy chief with the Hamilton Fire Dept. “They’re not schooled in handling raw chemicals let alone the precursors, so they mishandle or improperly store these items, which can result in disaster.”

Meth production is often a crude process.

The drug is typically manufactured using chemicals and other products that are illegally diverted from legitimate sources. Some of the precursor ingredients required include pseudoephedrine (contained in over-thecounter cold medicines), anhydrous ammonia (used primarily as an agricultural fertilizer and industrial refrigerant) and red phosphorus (contained in striker plates of matchbooks).

When ingredients are mixed and cooked together, they produce volatile chemicals and fumes that can migrate far beyond the immediate cooking area within a unit.

Some of the byproducts of meth include phosphine gas, hydrionic acid, hydrogen chloride gas and phosphoric acid. They are not only potentially flammable and prone to explosion but highly toxic. Those who come into contact with these byproducts, directly or indirectly, may experience headaches, nausea, dizziness, fatigue, lack of coordination, respiratory issues, burns or even death. The exposure risk depends on the amount of meth being produced, cooking method, toxic properties of the chemicals or byproducts, ventilation of the premises, and the duration and route of exposure.

Regardless, “Any meth lab is a significant hazard to building residents,” says Moss.

Because of this, it’s important that property managers become familiar with the signs of meth production. Recognizing lab indicators may lead to early detection and possible prevention of a major disaster.

Some of the warning signs include: strong or unusual odours (akin to cat urine, vinegar, ether, ammonia or other solvents) emanating from a unit; frequent visitors to the building, especially at odd hours and

for short periods of time; unit windows blacked out, or covered with plastic or tinfoil; yellow or red stains in sinks, toilets or bathtubs, or staining on countertops, flooring or interior walls; large amounts of products like cold tablet packaging, drain cleaner containers, lighter fluid, paint thinner and opened lithium batteries in the trash; and dead or dying vegetation and/or discoloured soil, indicating dumped chemicals or hazardous waste.

“If something doesn’t seem right, either on the premise or outside, that could be a flag to call 9-1-1 and let police evaluate it,” says Moss.

Toronto police Det. Roger Desrochers agrees, cautioning property managers not to enter a unit if they suspect a meth lab is operating inside because it could be rigged with booby traps.

“This is a criminal enterprise so (the ‘cooks’) are going to do what they can

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April 2015 35

14-02-19 3:41 PM

FEATURE

to dissuade law enforcement or even competitors from coming in and taking their product,” says Desrochers.

Once police confirm the existence of a drug lab, they will secure the unit to collect evidence as part of their criminal investigation. This is a good time for the building owner to contact their insurance JermarkPIPE_Condo_Apr09.pdf 5/1/09 company to see if their policy will cover the cost of cleanup.

According to Pete Karageorgos of the Insurance Bureau of Canada, the building owner would be covered in most cases.

This is good news considering meth residue can spread to adjacent units and common areas, resulting in a costly cleanup that could potentially run in the tens of thousands of dollars. Factor in remediating 4:00:12 PM the building’s surrounding ground surfaces — a pound of meth typically generates

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five to six pounds of hazardous waste that needs to be dumped somewhere — and the cleanup tally could easily skyrocket over the $100,000 mark.

However, “The building owner may not be covered if he/she is the one responsible for the drug lab or illegal activity associated with it,” says Karageorgos.

Once the insurer has assessed the damage, confirmed it will take care of it and actually paid the claim — a process that can take anywhere from a few weeks to several months — the building owner may proceed with cleanup and remediation. The insurer will then go after the culpable party to recoup its loss.

Like the insurance claim process, remediation can be long and drawn out. The time needed is dependent on the size of the area to be cleaned, extent of contamination and the company performing the task.

However, once complete, the building manager can immediately rent out the unit, in the case of an apartment building; it has no obligation to disclose previous meth contamination to a potential resident. This is somewhat surprising given the fact that, in accordance with the Grow Ops Disclosure Act, 2007, building owners/managers must disclose to a prospective tenant that a property was once used as a marijuana grow operation.

“The contrast with grow-ops is really interesting,” says Joe Hoffer, a partner and specialist in residential tenancy law with Cohen Highley LLP. “There are all kinds of rules around grow-ops even though meth labs are potentially far more dangerous.

As long as a unit has been remediated so that contamination does not constitute a hazard for an occupant, then disclosure isn’t required by statute for a former meth lab.”

N onetheless, there is an ethic al responsibility, or civil liability, to impart this information, says Hoffer.

“There is always a duty of care between a landlord and tenant. Most courts would have no problem imposing liability on an owner if a tenant learned (building management) failed to properly remediate a meth lab and simply covered it up.” 1 The preceding article originally appeared in the January 2015 issue of Canadian Property Management: GTA & Beyond.

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Spotlight on: LED retrofits The building industr y is not

BY DR. IJAZ RAUF

alien to change. It has always evolved and adjusted itself to meet the social, economic and the architectural needs of the time and space. The recent deluge of skyscrapers responded to

the mounting pressures of people’s desire to live close to work and limited availability of city land by reducing building footprints.

Since the economic meltdown and long - drawn recession of 20 0 8 , the industr y is facing a new challenge to reduce the operational costs t o m a i n t a i n p r o f i t a b i l i t y. To d a y ’s economic pressures dictate innovative thinking and new technologies.

L ED retrofits are one way building managers can cut their annual utilities costs.

Lighting is an easy target for finding energy efficiencies. According to data p u b li sh e d by t h e U. S D e p a r t m e nt of Energy, it represents an average of 15 .7 p e r c e nt of a n a p a r t m e nt building’s total energy bill. LEDs are a natural candidate for lighting retrofit project. They were traditionally used as small indicator lamps in electronics, but are now becoming the first choice

for general lighting needs (see “Why switch to LEDs”).

A lighting retrofit case study A 144-apartment building in Markham, O nt a r i o , re p l a c e d a l l of t h e l i g ht s in its common areas with LEDs. The common areas included the hallways o n e a c h f l o o r of t h e b u i l d i n g , t h e communit y room, the laundr y room, the staircases/stair wells, the parking garage, the garbage shoot and room, the mechanical room and the exterior of the building.

First, an energy consultant performed a lighting retrofit audit, recording the physical count, type and energy use of each fixture and lamp. Table 1 shows the audit’s results. Table 2 shows the proposed replacement for each item

with a corresponding LED fixture and lamp. This excludes the exterior wall packs where, for added security, the management wanted to add six new wall packs in areas that lacked lighting at night.

Despite the addition of six new wallpack fix tures on the ex terior of the building, the retrofit resulted in a more than 77- per- cent reduction in energy use.

The economic impact of the retrofit can be calculated using the effective rate of the electricit y. The ef fective electricit y rate includes the cost of delivered electricity per kilowatt hour (kW h), the debt retirement charges, the transmission and delivery charges applicable to kWh delivered and the time of use rate fluctuations. Generally,

Table 1: Before retrofit, existing fixtures and lamps

Existing fixtures description

Watts per Bulbs per bulb fixture

Watts per fixture

Total fixtures

Total Watts

Usage hours per day

Total kWh per year

T12 4’ x4-lamp

40

4

176

54

9,504

24

83,255

T12 4’ x2-lamp

40

2

88

114

10,032

24

87,880

T12 2ft U

40

1

44

16

704

24

6,167

T8 4Ft x2 lamp

32

2

64

10

640

24

5,606

Bulbs

15

1

15

28

420

24

3,679

Par-38

75

1

75

18

1,350

24

11,826

Exterior wall packs

75

1

75

4

300

12

1,314

Total 38 CONDOBUSINESS | www.condobusiness.ca

22,750

199,728

MAINTENANCE Table 2: LED replacement fixtures and lamps

LED replacement fixtures

Watts per bulb

Bulbs per fixture

Watts per fixture

Total fixtures

Total Watts

Usage hours per day

Total kWh per year

LED T8 4’ x 2-lamp

18

2

36

54

1,944

24

17,029

LED T8 4’ x 1-lamp

18

1

18

114

2,052

24

17,976

LED T8 4’ x 1 lamp

18

1

18

10

180

24

1,577

LED T8 2’ U

18

1

18

16

288

24

2,523

LED A19 Bulbs

10

1

10

28

280

24

2,453

LED Par-38 Bulbs

18

1

18

18

324

24

2,838

LED Exterior wall packs (4-existing, 6 new)

25

1

25

10

250

12

1,095

Total 5,318 the effective rate that a client pays is between $0.14 and $0.18 per kWh. Most of the ENERGY STA R and UL- cer tified products qualify for the saveONenergy incentives from the Ontario Power Authority (OPA). Table 3 presents all the data that was used to calculate the payback and the overall economic impact of the retrofit project. The actual effective rate, the cost of the retrofit, the maintenance cost and the incentive

45,491

received are used. The payback was nine months, which ensures all equipment will pay for itself many times over before the warranties run out. Even if no retrofit incentive was received for this project, the payback would be only 11 months, again ensuring that equipment pays back itself many times over within the life of the bulbs, which is usually 10 0,0 0 0 hours (or 11.4 years with continuous 24 hours usage).

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Figure 3: Comparison of kWh per annum consumption

Table 3: Payback calculations as a result of the retrofit

250,000

Total savings in kWh per year........................... 154,237

200,000

Cost of electricity per kWh.................................... $0.14

150,000

Total cost of retrofit...........................................$22,534

100,000

Current maintenance cost per year......................$2,253

50,000

New maintenance cost per year.................................$0

-­‐

120000

Existing

After Retro5it

Maintenance savings per year.............................$2,253 Retrofit incentives received.................................$5,634

Figure 4: Cummulative cash ;low from project in dollars

Payback with incentive (months)..................................9 Payback without incentive (months)........................... 11

100000 80000

Reduction in annual bill...................................... $21,593

60000 40000 20000 0

-­‐20000 -­‐40000

0

1

2

3

4

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Why switch to LEDs LEDs carry a number of advantages compared to traditional lamps: En e rg y e f f i c i e n c y: L EDs provide electricit y savings of up to 9 0 per cent Long life: LED lamps typically last 50,000 hours or more (roughly more than 20 times the life of traditional l a m p s ), a v o i d i n g t h e l a b o u r a n d ex pense of replacing bulbs ever y fe w m o n t h s . M o s t g o o d q u a l i t y LED lamps come with a minimum warranty of three years.

Low heat: LED lamps don’t waste electricit y producing heat and also ensure a better environment around the lamps.

Environmentally friendly: LED lamps are mercury free.

Instant on: LED lamps turn on without any flicker or delay.

High colour rendering index (CRI): LEDs provide the highest possible CRI, which measures a light source’s abilit y to reproduce the natural colours of various objects faithfully in comparison with an ideal or natural light source. L EDs t y pic all y have a CRI of 8 0 - plus compared to the negative CRI of sodium lights and a max of 50 CRI for fluorescent lamps.

High lumens per watt: Luminosity of a l a m p d ef i n e s h o w b r i g ht i t will be. The higher the lumens the brighter the lamp light is. So when there are high lumens per watt that means the lamp produces very bright light consuming very little energy.

Fix ture c om pati bilit y: Most LED lamps fit into the existing fixtures, avoiding the ex tra expense to replace the fixtures and also keeping the existing lo ok and feel of the environment. Most LED lamps also come with a built-in driver and do not need external ballasts.

“All told, management reduced lighting electricity use in the case study apartment building by 77 per cent.”

Conclusion Lighting retrofits are low-hanging fruit in the quest to go green and cut operational costs. LEDs in particular carry a number of advantages compared to traditional lamps.

Though results will vary from building to building, the case study above shows the potential for other buildings to save by undertaking similar lighting retrofit projects.

All told, management reduced lighting electricity use in the case study apartment building by 77 per cent, resulting in annual electricity bill savings of $21,593. Based on the incentive received and annual maintenance cost savings, this project paid

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itself off within nine months of completion.

Besides giving the building a greener image, management will continue to enjoy annual savings of $21,593 in electricity bills for the remaining life of the LED lamps. 1 Dr. Ijaz Rauf is a solar energy expert. He obtained a Ph.D. in physics from Cambridge University in England. He is currently the president and CEO at SolarGrid Energy Inc. and an adjunct professor in the Department of Physics and Astronomy, York University. He can be reached via e - mail at irauf@solargridenergy.ca or phone at (888)743-4621.

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SMART IDEAS

Tee time April is the month that Ontario normally trades the weakening clutches of winter’s deep freeze for spring thaw. An increasingly popular condo amenity on the Toronto market is sure to grab the attention of all the golfers who are itching to get out on the green The High Definition Golf™ simulator is on the upswing in Toronto. Vaughan’s Interactive Sports Technologies, the maker of the simulator, has observed growing interest in the amenity as developers compete in the local condo market.

“Condo developers are differentiating their property with HD Golf™ Simulators from those with only standard amenities,” says Todd Richardson, president of Interactive Sport Technologies.

The HD Golf™ simulator gives amateurs and pros alike the ability to practice and compete on photo-realistic 3D models of championship courses such as Banff Springs®, Pebble Beach® and St. Andrews®. That’s rain or shine, from their condo recreation centre.

Features include shot analysis, video swing analysis, weight transfer/balance and motion analysis as well as integrated teaching and training tools.

Interactive Sports Technologies custom builds each simulator in-house. Existing installations can be found in buildings from Toronto to Markham to Barrie, including King West Condos, Maple Leaf Quay and World on Yonge.

For more information, visit www.HDgolf.com.

42 CONDOBUSINESS | www.condobusiness.ca

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