Condo Business

Canada’s Most Widely Read Condominium Magazine

A SEASON

OF CHANGE

+

September 2017 • Vol. 32 #4

Education requirements for directors and managers due to roll out this fall

DESIGN AND RENOVATION Colour selection, project success and Tarion coverage for condo conversions

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Contents FEATURE

20

DEPARTMENTS

Phase one

By Michelle Ervin

FOCUS ON: DESIGN & RENOVATION

10

Simple design choices support accessibility

By Jeff Wilson

12

Shining a light on condominium security

By Latif Jamani and Bryant Tse

16

Expanded warranties for condo conversions coming

By Kim Coulter

24

A director’s toolkit for renovation success

By Pat Crosscombe

26

Legal A condo rule against complaining?

By David Thiel

30

Governance Codes of ethics set ground rules for directors

By Shlomo Sharon

34

Technology Five ways tech-savvy communities are using software

By Dale Shackell

IN EVERY ISSUE

8

Ask the expert

38

New and notable

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EDITOR'S LETTER

A season of change

Publisher Mitchell Saltzman

As the kids head back to school this fall,

Advertising Sales Sean Foley, Stephanie Philbin, Melissa Valentini

newly elected condo board directors and junior condo managers will face some education requirements of their own as long-awaited to changes to Ontario’s condo laws start to roll out.

Directors elected from Nov. 1 onward will have to complete a free, online course made up of seven to 10-minute modules totaling three hours. Managers who have less than five years of experience under their belts on Nov. 1 will be required to complete courses developed by the Association of Condominium Managers of Ontario (ACMO) in order to obtain a general license.

The move to introduce mandatory education for directors and managers came out of an 18-month review of the Condominium Act, which ultimately led to updates to the legislation as well as new legislation to regulate the condo management industry.

Counting from the kickoff of the review in 2012, the changes to Ontario’s condo laws due to start taking effect this fall have been five years in the making.

This month’s cover story provides an overview of which changes are coming, and when, as well as insight from industry members about what to expect. As condo lawyer Chris Jaglowitz told me, confusion is likely to linger until all of the changes have rolled out, and the phasing is slated to carry into early 2018 at least.

Also in this, our design and renovation issue, you will find articles on selecting paint colours, setting projects up for success and coming Tarion coverage for condo conversions.

It may not mark the beginning of the calendar year, but fall is a season of change, a chance for a fresh start for students returning to school. That will undoubtedly be the case for the condo industry in 2017 as it navigates new requirements.

Editor Michelle Ervin

Senior Designer Annette Carlucci Production Manager Maria Siassina Production Coordinator Elizabeth Nguyen Contributing Writers Kim Coulter, Pat Crosscombe, Latif Jamani, Dale Shackell, Shlomo Sharon, David Thiel, Bryant Tse, Jeff Wilson Digital Media Director Steven Chester Subscription Rates Canada: 1 year, $60*; 2 years, $110* Single Copy Sales: Canada: $10*.

Elsewhere: $12 USA: $85 International: $110 *Plus applicable taxes Reprints: Requests for permission to reprint any portion of this magazine should be sent to info@mediaedge.ca.

Circulation Department Yeshdev Singh circulation@mediaedge.ca (416) 512-8186 ext. 234 CONDOBUSINESS is published six times a year by

President Kevin Brown

Michelle Ervin Editor, CondoBusiness michellee@mediaedge.ca

Director, Sales & Strategy Eric Harbottle Accounting Manager Nadia Piculik, CPA, CMA 5255 Yonge Street, Suite 1000, Toronto, ON M2N 6P4 (416) 512-8186 Fax: (416) 512-8344 e-mail: info@mediaedge.ca CONDOBUSINESS welcomes letters but accepts no responsibility for unsolicited manuscripts or photographs.

Canadian Publications Mail Product Sales Agreement No. 40063056 ISSN 0849-6714 All contents copyright MediaEdge Communications Inc. Printed in Canada on recycled paper.

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Colour my condo Could a paint colour change on a property land a condominium corporation in court? What about result in physical threats? The answer to both is yes. Experience painting condominiums confirms that colour can be a contentious issue. Phil von Massow, owner of ArmourCo Solutions, answers: What are some effective strategies for selecting a new hue?

Once a board decides to move ahead with painting maintenance, it must decide whether to match the existing colour or change it. Since paint colours fade over time, even matching the existing colour presents problems. What colour should be matched: the faded one or the one closest to the original?

Whether the project involves doors, siding or trim and fascia on a townhome site or suite doors, trim, balconies or interior or exterior walls in a high-rise building, colour is personal and change often generates volatile discussions. When a long-standing colour is changed, those charged with the responsibility of maintaining a building can find themselves maligned and accused of lack of taste by residents.

Many boards avoid the pitfalls of changing colours by repeating the existing paint colour. But making the decision to stay the status quo can

8 CONDOBUSINESS | Part of the REMI Network

leave a condominium looking dated, with reduced curb appeal — affecting every owner’s return on investment.

There are effective ways and not-so-effective ways to initiate a colour change in a condominium community.

Painters have had to be removed from a site after they were physically threatened by owners who disagreed with the new colour choice being applied to front doors. A large exterior painting project had to be put on hold as owners and management negotiated through court proceedings to stall a site-wide colour-change decision.

Conversely, when owners are engaged early and consensus is reached, residents have been excited to see the positive facelift of a condominium site with a simple, professionally executed colour change.

What can a board do to make the transition easier when considering a colour change?

ASK THE EXPERT Ask for volunteers Canvass owners and residents, form a committee, and communicate plans to make colour changes well in advance to the condominium community. Engaging owners like this helps to diffuse or prevent accusations that a board operates in a vacuum.

Present a digital rendering How colour will change a room or the exterior of a home can be hard to imagine. Colour rendering can often bridge this gap by helping owners and residents visualize what the space will look like.

Examine a full-size paint sample The sample strips supplied by paint stores are just too small to use to make a large-scale decision.

Also, the other colour shades on the sample strip have a tendency to influence a person’s eye, making the process even more difficult. A large sample board painted with the new colour can be moved to multiple locations with varying light exposures to get a better sense of what sort of result to expect.

Remember: While colour samples are typically examined under 100 per cent light, rarely do all of the surfaces on which the paint is applied receive 100 per cent light all of the time. Experience also suggests that colours chosen under artificial light can look very different — for example, washed out — when applied outside under natural light.

Have a mock-up done For individuals who have difficulty visualizing the new colour or design, painting a complete wall, door, or unit will give the board and owners confidence that their decision best reflects their expectations.

A board can save a lot of time, energy, and money by trying to engage ownership early in the process of maintenance projects like this. Even for just a simple paint colour change, communication is key. 1

Phil vo n M assow is the owner of ArmourCo Solutions, which has more than 25 years of experience in the condominium industry. The company p ro v i d e s fu l l - s e r v i c e m a i nte n a n c e including interior and exterior painting and caulking, flooring/membrane, repairs, and underground garage projects for townhome and high-rise condominiums.

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Use website galleries Photos of buildings with similar architectural features and substrates painted in colours close to the newly proposed colours can be helpful in presenting a future vision to owners. Often these websites offer ‘before’ and ‘after’ photos, which can inspire design committees.

Several websites offer the ability to test options online — just upload a photo and apply a variety of possible colour schemes.

Hire a professional Many of these options require a working knowledge of architectural features and the overall impact of the colours being considered. What happens when a board just wants to update the colours but has no idea where to start?

A professional designer will bring experience picking colours. Colours are very much an individual preference but a designer will be able to gauge the vision and expectations of the condominium community. More importantly, by hiring a professional the colour decision is in the hands of a third-party expert, relieving the self-identified ‘resident designer’ from being subjected to criticism from their neighbours about their choices.

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www.REMInetwork.com | September 2017 9

DESIGN & RENOVATION

Simple design choices support improved accessibility Older condo buildings constructed in the 1980s and earlier are now facing challenges

BY JEFF WILSON

of providing amenities to owners who are 65 years or older. These buildings often lack accessibility and safety features now common in new buildings.

In recent months, condominium boards and managers have been increasingly seeking advice on how to make accessibility improvements. These boards and managers are interested in limiting their legal liability, but are primarily motivated to enhance the overall living experience of owners.

With planning most of the upgrades can be done economically. Many accessibility

deficiencies can be addressed alongside existing maintenance activities or current improvement projects with informed product choices.

There are some simple choices that can make a big difference for liability and service through the course of common projects undertaken in condo buildings to improve flooring, doorways, lights, and wall/door finishes.

10 CONDOBUSINESS | Part of the REMI Network

Flooring Flooring must be durable and not show dirt easily. Two things to consider for seniors and people with disabilities when it comes to carpeting are design and contrast.

Look for simple rather than complex design patterns that follow the natural flow of the hallway and lead to elevators and exits. Also use a proper light/dark contrast

DESIGN & RENOVATION

so people with low vision can easily navigate hallways. Make sure the contrast is near enough to the wall so someone with low vision or blindness can easily walk with their hand on the wall for support and identify any signage, door handles, etc.

Doorways It’s common for condo buildings to have raised transitions in doorways of all condominium units. This is an unfortunate case where the fire code and accessibility/ safety are in conflict. The transition itself is part of important doorway designs that control the spread of fire and airflow between hallways and units. At the same time, these transitions can pose a significant tripping hazard to seniors, particularly those with vision loss and/or progressive agerelated mobility disabilities.

If the transition is removed, the door must be replaced — a major expense. But there are products such as fire-rated door sweeps that allow the transition to be removed without compromising the fire safety elements of the doorway. Before embarking

on a replacement project consider which products work for a particular building and whether they are approved by the local fire inspector.

Lighting When considering lighting upgrades, look at ways to improve light diffusion while also eliminating shadowed areas. Poor lighting in common halls has resulted in alternating light/dark patterns on the walls, which can be disorienting and confusing for seniors suffering from low vision or early cognitive disability symptoms.

The selection of wall sconce and light intensity makes a big difference for diffusion and light levels, so ensure proper testing is done to measure adequate lumens and minimize shadows. Lighting upgrades can also pay dividends in energy savings.

Wall and door finishes Common areas should look great. However, the importance of wall finishes in improving accessibility and safety for seniors often gets underestimated.

T here are a couple of simple and ef fective rules of thumb to keep in mind. Ensure the wall sur face helps to properly dif fuse light to minimize shadow. Also ensure the wall colour contrasts with the floor as well as door frames, c ond o units and elevators.

And make fire exit doors a different contrasting colour.

T he key to success is making sure li g htin g , fl o o r in g a n d w all f inish e s work together to deliver an enjoyable d esign experience while making the halls safe and easy to use. Improvements that benefit both seniors and residents with disabilities can be quite simple and inexpensive with simple choices that can be made during regular upgrades. 1 Jeff Wilson is founder and CEO of Adaptability Canada, a national provider of accessibility solutions for the residential, commercial, non - profit and public sectors. For more information, visit adaptabilitycanada.com

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2017-10-04 2017 2:29 PM www.REMInetwork.com | September 11

DESIGN & RENOVATION

Shining a light on condominium security

Lighting can make a big difference in the safety and security of a condominium.

BY LATIF JAMANI AND BRYANT TSE

Traditionally, designing lighting specifically for security was more of an afterthought, as it was perceived as an added cost. The minimum Illuminating Engineering Society (IES) standards have always been the benchmark for many condominium developers, and properties located in urban areas tend to rely on city lighting to provide a good amount of the area lighting around buildings.

City lighting tends to focus on illuminating sidewalks and roadways, not on adding safety or security to the properties around it. City lighting requirements are also very low in areas such as alleys behind condo buildings (which may be accessed by residents if they need to get into the parking structure in their building).

Because of this, much of the onus on adding lighting for security has been on condominium developers and managers.

More thought needs to be put into designing lighting for the security of condo buildings, and there are a number of factors that should influence decisions made in the design phase.

First, consider the location of the building.

For example, people sometimes live, work, and play in the same downtown areas, so they may be coming and going from urban condominiums at all times. Extra foot traffic is to be expected in these areas, which can

12 CONDOBUSINESS | Part of the REMI Network

present security risks. It may be hard to tell who “belongs” in the building and who does not belong there. There may be more of a temptation for people to try to get into the building, especially in areas like side doors or parking garages.

Lighting is the most immediate deterrent for sinister activity around condo buildings — more than security cameras. However, simply adding floodlights can cause light pollution and might even make the building

DESIGN & RENOVATION

look less appealing. If too much light shines into residents’ units, it may disrupt their sleep and home life. The idea in designing security lighting is to provide a halo for the condo building.

Security lighting should be elegant, highlighting architectural features of the building or giving it an interesting visual aesthetic at night. It should also illuminate the area enough for security cameras to clearly view and record activity in higher detail.

Low light levels can lead to less security: if there is not enough light by a doorway, for example, security personnel may not realize that there is someone there trying to get in. From a distance, they might not be visible at all.

If light levels are stronger and fixtures are organized and intentionally spaced out, that person might not want to try to get into the building by that door because there is too much light for them. Another person from a distance may see them hanging around the doorway too long and realize that they are not supposed to be there, and that they may be trying to break into the building. A person who belongs in that building most likely has a key and can get into the building quickly.

The longer it takes someone to get into the building, the more likely it is that they are not supposed to be there, especially in the middle of the night. This gives security, and even residents or witnesses, time to make the distinction. Having good lighting at a doorway in particular could make would-be thieves conscious of how exposed and visible they are to the environment and deter them from trying to gain access into the building.

LEDs are great options for updating the security lighting of a condominium. They come with five or 10-year warranties at a one-time upfront cost, which cuts back on maintenance costs; more fixtures can be installed without increasing the overall power consumption of the building; and adding automated light fixtures with timers, or fixtures that come with sensors, makes for efficient lighting. Plus, the white colour light offers an aesthetically pleasing finish and there are easy-to-install LED fixtures that can add to the exterior design of the building.

Indeed, security lighting does not have to solely be for security purposes — it can be used to enhance the architectural features and design elements of the space. It can improve curb appeal and the finish of the building, making it look cleaner, fresher, and newer, which may give residents increased pride of ownership. Ancillary benefits can be gained from adding affordable but well-positioned lighting.

Whether developing a new building or updating an older building, it’s important to spend time with architects and building engineers discussing security lighting during the design stage.

Consider, too, how residents will feel about certain lighting designs. It’s possible to achieve multiple goals by installing wellthought-out and designed lighting in a condominium. 1 Latif Jamani is the president of Calgary Lighting Products located in Calgary. He can be reached at 403-258-2988 or latif@ calgarylightingproducts.com.

Bryant Tse is the president of Lumenix, based in Toronto, with offices in Vancouver, Calgary, and Ottawa. He can be reached at 1-855-586-3649 or bryant.tse@lumenix.com.

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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.

14 CONDOBUSINESS | 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 15

Expanded warranties for condo conversions coming Starting next year, builders and

BY KIM COULTER vendors of residential conversion projects will have to register with Tarion and obtain approval to

proceed with their plans. These changes under the Ontario New Home Warranties Plan Act will help close current gaps in consumer protection.

A residential conversion condominium is where an existing building (office, factory, rental apartment building, as examples) is refitted or expanded to create a multi-unit condominium corporation registered like any newly built condominium.

With conversions, there are often two major hurdles that the corporation’s board and owners may encounter during the first few years after registration: no Tarion warranty protection and insufficient funds for imminent expenses.

Current shortfalls in consumer protection The common elements of conversion corporations have no Tarion warranty protection, as is currently afforded to newly

16 CONDOBUSINESS | Part of the REMI Network

constructed condominiums. Even if the conversion included newly constructed components (roofing, heating/cooling equipment, windows) or if there were new building structures constructed (new row townhouses as part of an existing loft conversion), there would still be no common element warranties.

As such the board is left to deal with the vendor/builder on building deficiencies.

The common elements in newly constructed residential condominiums have a range of Tarion warranties, which kick in on the date of registration. In the first year, warranties ensure condominiums are fit to live in, up to Ontario Building Code, and the work and materials are free from defects. Through the second

DESIGN & RENOVATION

year, warranties continue to cover certain types of defects, violations of the Ontario Building Code’s health and safety provisions as well as water seepage through the basement or foundation walls. Major structural defects have warranty protection for seven years.

There can be a host of major common elements in a newly registered conversion that may meet code, but are nearing the end of or have exceeded their expected service life. This can include building envelope components, parking garage structures, balconies, elevators, and heating and cooling equipment.

The reserve contribution in the vendor/builder’s first-year budget does not typically account for these significant costs. The standard calculation of 10 per cent of the operating budget as the first-year reserve transfer has no relation to what it should be to address these imminent expenditures.

As such, the corporation can be faced with insufficient funds to address major repair costs in the early years after registration. And the major repairs may only be identified through the Class I Comprehensive Reserve Fund Study, which is done in the first year after condominium registration.

Legislative changes bring new requirements To address these shortfalls in consumer protection, effective January 1, 2018, the Ontario New Home Warranties Plan Act will require builders and vendors who sell units in an applicable residential conversion project to be registered with Tarion and undergo an approval process before the proposed project can commence. The full process is outlined in Tarion Builder Bulletin 51 and includes:

Property Assessment Report Either a licensed engineer or architect provides a general description of the building, its condition and the planned conversion. This high-level report is provided solely to Tarion.

Capital Replacement Plan An architect or engineer creates an expected work schedule, including budgets, for modifying, repairing and replacing pre-existing common elements for the 45 years following registration. This involves assessing the condition of the common elements and identifying related key risks. It also involves assessing structural adequacy and destructive testing.

This report is provided solely to Tarion.

Pre-existing Elements Fund Study Provided to all purchasers, this report generally describes the new building and planned conversion and includes a schedule for anticipated work in the five years after registration. The report also shows expected work for all pre-existing elements for the following 40 years and includes a list of pre-existing elements that will be repaired, replaced or restored before the condominium is registered. The study will also calculate the amount of funds the vendor/builder will need to contribute to the pre-existing elements fund to cover the cost of expected work in the first five years after registration.

The funds for the work expected in the first five years will be placed in a separate escrow account for the condominium

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DESIGN & RENOVATION

corporation. Further, the funds must be in place at the time the project is e nro ll e d w i t h Ta r i o n . A f te r t h e condominium has been registered, the fund will be transferred to the corporation in a segregated account to be used in accordance with the expected work schedule included in the pre-existing elements fund study.

Lionheart_Condo_March_2017_FINAL.pdf

Warranty claims under expanded coverage How do the Tarion warranties come into play? In two ways.

A performance audit will still be required under the Condominium Act to identify common element deficiencies. Pre-existing elements cannot be expected to perform as new elements, so they will not have the first-year warranties that newly 1 normal 2017-02-16 10:40 AM constructed common elements (of the

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conversion) have with respect to workmanship and materials. Ontario Building Code and fit-forhabitation warranties will, however, apply. The second and seven-year warranties will apply both to pre-existing and newly constructed common elements in conversion projects.

Tarion warranties will also apply if the c o n d o minium c o r p o r atio n feels th at the fund s allo c ate d for re p air s and replacements in the first five years may not be sufficient. A warranty claim to Tarion and the vendor/builder can be initiated.

It will be interesting to see how warranty claims will be handled. Two of the key tenets of all Tarion warranties are that normal wear and tear (which is to be expected with preexisting elements) and improper maintenance will void coverage. It’s anticipated there may be considerable debate over the scope of work and costs allocated in the pre-existing elements fund and what’s deemed necessary by the condominium corporation and its performance audit consultant.

Another caveat is that the above-described reporting and funding requirements and Tarion warranty provisions will not apply to conversions of rental apartment buildings. This appears to be a tactic to preserve Ontario’s rental stock.

In the writer’s experience, apartment buildings converted to condominiums often retain many of their original building components. Hence, they would also benefit (perhaps more so as compared to other forms of conversion) from a comprehensive pre-existing elements fund.

The changes to the Ontario New Home Warranties Plan Act represent a major step forward in consumer protection for conversion condominium unit owners. They include: • More disclosure on the status of pre-existing common elements; • five-year funding by the vendor/builder for pre-existing elements, setup prior to project approval/enrollment; and • warranty protection for both pre-existing and newly constructed common elements. 1 Kim Coulter, B.Tech.(Arch.Sc.), ACCI, FCCI, is president of Cion|Coulter Engineers and Building Scientists, which has offices in Toronto and Burlington, Ontario. Since 1985 he has been providing engineering services to condominium corporations with respect to technical/ performance audits, reserve fund studies and problem assessment/building rehabilitation. He can be reached at 1-877-313-9862 or at Kim. Coulter@cioncoulter.com.

18 CONDOBUSINESS | Part of the REMI Network

KITEC REPLACEMENT

COVER STORY

PHASE ONE

BY MICHELLE ERVIN

Legislative changes that have been five years in the making are due to start taking effect this fall. Among the first are education requirements for newly elected condo board directors, mandatory licensing for condo managers, and a tribunal which will hear disputes about records to start

COVER STORY

www.REMInetwork.com | September 2017 21

COVER STORY The countdown to the roll out of changes to Ontario’s condo laws began this summer.

As of Sept. 1, board directors and unit owners can call or email the newly established Condominium Authority of Ontario (CAO) to ask questions. That same day, the non - profit corporation received its designation as the entity established to provide dispute resolution, education and information services as part of legislative reforms that are due to be phased in starting this fall.

“It’s anticipated the public will seek information from the CAO about common condo issues, including smoking, noise and pets,” Minister of Government and Consumer Services Tracy MacCharles said at a press conference in July. “In addition, it will likely be handling inquiries from condo board directors regarding issues with owners.”

With the volume of inquiries it will receive difficult to predict, the CAO is planning to add people to its start-up team as it prepares to launch a customer service centre.

“One of the concerns that we’ve identified and are addressing is we want to get off to a good start, and in order to do that, you have to be able to respond in a reasonable amount of time,” said Tom Wright, chair of the CAO,

who was on hand at the press conference in July. “We’re not 100 per cent sure what the demand is as of yet, so we’re now looking at how can we staff without hiring permanent people necessarily in order to deal with that perhaps initial group of requests that we’re going to be receiving or information requests that we’re going to be receiving.”

The CAO will be looking for trained adjudicators with “experience in the condo community” for its tribunal, which will hear certain types of disputes if they remain unresolved after parties access online selfhelp tools and mediators. These dispute resolution services will become available through the CAO Nov. 1, as will director training, which will be mandatory for board members elected from that date onward.

Director training will take the form of a free, online course, which breaks down three hours of material into seven to 10-minute modules.

The press conference provided an update on the status of legislative changes contained in the Protecting Condominium Owners Act, which was passed into law in late 2015 but has yet to take effect. The bill overhauled the Condominium Act and introduced the Condominium Management Services Act, which will regulate the condo

management industry. Although the press conference provided some new details, it mostly reiterated information that has become available over the past several months as proposed regulations and fees have been released for public comment.

The CAO’s operations are expected to be funded partly through a monthly fee of roughly $1 per unit, which will be collected from unit owners and remitted by condo corporations annually. The prorated fees for the last four months of this year will come due Dec. 31.

The CAO has adopted proposed user fees for dispute resolution services that will max out at $200.

William Stratas, managing director of Eagle Audit Advantage Inc., said after the press conference that he thinks the proposed user fees are too low, citing the need to balance the deterrence of vexatious complaints with the recovery of the tribunal’s costs. But he added the true test of the tribunal will be the caliber of both the complaints that are filed and the tribunal’s decisions, which will be shaped by the members who sit on the tribunal.

“If the CAO tribunal is staffed with industry insiders, or persons who carry a prejudicial set of agendas, it’s going

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COVER STORY to be a disaster for condo owners,” said Stratas. “If they staff it fully eyes open, in a fair and objective way, with members willing to take the time to truly understand the underpinnings of this industry and the areas and sources of conflict, then there’s hope that good precedents will be established in the tribunal’s initial decisions that will serve as solid foundation for future decision-making.”

When its services become available Nov. 1, the tribunal will hear only disputes relating to records, but its scope could expand based on public input to include other types of disputes.

Also on Nov. 1, the Condominium Management Regulatory Authority of Ontario (CMRAO) will be designated as the entity established in new legislation governing the industry as licensing requirements roll out.

The non-profit corporation is expected to fund its operations through annual licensing fees of $607 for condo managers (less for limited licensees) and a base rate of $799 for condo management companies, as well as $350 for every manager it employs.

Whether management companies will offer to cover the $607 licensing fee for its managers, in addition to the $350 they will have to pay per head, remains to be seen,

Robert Weinberg, president of the Association of Condominium Managers of Ontario (ACMO), said after the press conference.

“For the largest companies, I believe it’s almost a quarter of a million dollars they would have to come up with a year for both the manager’s fee and their portion of the fee,” said Weinberg. “In this industry, which has about a 10 per cent profit margin, that’s $2.5 million worth of contracts just to profit to pay for that, so that might be difficult.”

Licensing fees are not the only new costs management companies will face as condo law reforms roll out. Condo corporations will be obligated to increase the frequency of their communication with owners through mandatory information certificates, which will add to administrative workloads.

With management companies likely to hire dedic ated administrators to perform this new duty, Weinberg said some providers are considering charging a “disbursement fee” for information cer tificates to offset the associated expense.

More changes are on tap in 2018, with a code of ethics and discipline and appeals committees slated to be established by Feb. 1, at which point complaints about

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licensees will be subject to review by the registrar. Still to come are new disclosure requirements for developers and new reserve fund rules for condo corporations.

C ondo law yer Chris J aglowit z, a partner at Gardiner Miller Arnold LLP, said after the press conference that right now his focus is on getting familiar with the changes as the regulations become available.

“There are new regulatory provisions for almost ever y new amendment to the Condo Act and we don’t yet know what they all mean and we don’t know how they will apply to every possible situation,” he said. “For simple situations, applying the new regulations should not be terribly difficult, but we often get situations that are unusual, or are partly from column A, and partly from column B, and so how will these new provisions apply in those unusual situations?”

This will take time for condo managers and boards to work through with their legal counsel, said Jaglowitz, adding that confusion over when dif ferent requirements take effect is likely to linger until the roll out of the legislative reforms is complete. 1

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DESIGN & RENOVATION

A director’s toolkit for renovation success

Given how much corporations are likely to invest in renovation projects, it’s important

BY PAT CROSSCOMBE

to set them up for success. Here’s advice to help directors do just that.

The reserve fund study Before even thinking about a renovation, take a look at the corporation’s reserve fund study (RFS). The CondoBusiness ar ticle “Demystif ying condominium reserve fund studies,” available online, provides an excellent introduction to reserve fund studies.

Directors need to know their RFS thoroughly and understand its limitations.

Specifically, it’s critical to understand that reserve fund studies don’t provide exact implementation schedules or precise budgets for anticipated projects and always

seem to calculate the annual interest rate for the reserve fund account using interest rates that no local banks offer.

There are no rules requiring directors to follow their RFS exactly. The RFS schedule shifts when any part of the physical infrastructure is damaged by an “act of God” or fails prematurely. Decisions about implementation can only be made after consulting with the appropriate experts.

C orporations with a good record keeping system will know their p r o p e r t y ’s h i s t o r y a n d w i l l h a v e valuable data on previous work,

24 CONDOBUSINESS | Part of the REMI Network

resident maintenance requests, and other pertinent information. A trend in minor leaks, for example, can indicate that the windows are failing faster than expected.

Delaying work to future years to keep condo fees from increasing is possible but only acceptable if delays do not cause adverse consequences. The key lesson is to understand that the RFS is not an absolute road map and to consider the pros and cons of delaying a project thoroughly.

DESIGN & RENOVATION Plan, plan, and plan Planning always takes longer than expected, so start early; a year in advance is not too soon. Large projects demand careful planning and budgeting to ensure that a contract is in place before the onset of the construction season. If directors allocate enough time for planning, they can relax (a bit) and avoid pressure to make snap decisions.

Ask owners for their opinions Another benefit of advance planning is that it leaves directors plenty of time to consider owners’ opinions. Any renovations that include an aspect of colour or design — for example, redecorating the party room — need special attention that replacing the roof does not.

The annual general meeting (AGM) is an opportunity to speak directly with at least some of the owners. After the AGM and with the input from this initial group of owners, the board can follow up with the rest using readily available and often free software.

Consulting the owners is not mandatory, so why would a board want to do this? The most obvious answer is to prevent complaints once the work is finished. A colour choice that the owners dislike can result in a never-ending stream of complaints and ill will. The best answer is because asking the owners gives them a say in the look and feel of their homes. Technology makes it much easier and cheaper to do this than ever before, so why not?

As general rules, keep surveys short and ask focused questions. Provide a short-list of possible choices, or it will be impossible to make a final decision. And don’t forget to leave enough time to collect feedback from a survey.

Be flexible (and creative) There are so many options and pricing possibilities for any project, but the following few tips will help directors navigate this complex process.

Alwa y s c h o o s e t h e b e s t q u a l i t y materials possible because they usually have a longer life expectancy, lower annual maintenance fees and will cost less over their expected lifespan. Higher qualit y materials might not pay for themselves until 20 or 25 years have passed. Lower cost materials might seem the best option for today but could cost more in the long run after including the cost of maintenance. It could be an excellent decision to levy a special assessment if a higher cost option

reduces future costs. Always evaluate total costs based on the lifespan of the project.

Redecorating projects present a unique challenge because style is subjective and it’s hard to predict how long today’s trends will look good.

Durability is hard to measure when considering style or cosmetic features. Certain features could look great but end up becoming costly if the feature is easily damaged, for example, by residents moving in and out.

Assign oversight Major projects require expert oversight.

Most contracts stipulate a payment schedule contingent upon meeting specified milestones, but who determines if the project meets the prescribed standard? It may be appropriate to engage an engineer to help monitor the project and conduct regular inspections.

It’s important to monitor large and complex projects closely and make any necessary corrections earlier rather than later. It’s possible to take legal action against a contractor if the project has issues, but consider this option a last resort. Preventing problems mid-project is always better than trying to fix problems at the end.

Consult experts Throughout the process of planning and implementing any renovation project, directors are expected to consult with the appropriate experts. Property managers have considerable expertise in renovation and should always be the first person directors consult. Engineers also play a key role before and during renovations.

Successful renovation projec ts rely o n c o n d o d i re c to r s u n d e r s t a n d i n g their R FS , planning , asking ow ners for input, being flexible and creative, a n d a s s i g n i n g p ro p e r ove r s i g ht . I f directors consider these factors and consult experts, there is a much higher probability of a positive outcome. 1

Pat Crosscombe is the founder and CEO of BoardSpace, a company that provides software for condo boards and property managers. She is the president of her condo board for the second time after a three-year break from a first term of five years. She can be reached at 613-7900225 or pat@boardspace.ca.

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A condo rule against complaining?

BY DAVID THIEL

Recently, a condominium corporation in Toronto was reported to have enacted a rule which, among other things, sought to limit the ability of residents to complain to the condominium. Various parties including residents of the building in question have expressed outrage at such a rule.

26 CONDOBUSINESS | Part of the REMI Network

LEGAL

In particular, the rule was reported to contain finances. Sometimes residents go too far, wording prohibiting “unreasonable and/or however, resulting in harassment of board repetitive expression of concerns with respect members and managers.

In fact, in recognition of the problem of to the administration of the affairs of the Condominium Corporation.” This appears to harassment in the workplace (which includes be a small portion of a rule generally relating to condominiums) the Ontario government has enacted legislation to guard against a harassment policy.

The subject rule drew a lot of attention. In harassment. The Occupational Health and addition to television news coverage, a Reddit Safety Act, commonly referred to as “Bill discussion board, for example, contained 168,” includes provisions that specifically extensive discussion of the rule, with a thread address workplace harassment.

While the rule against “repetitive” entitled “my condo is making it against the expressions of concerns might have used rules to complain.”

In the writer’s view, while the rule perhaps different language, the underlying approach is was worded in a way which invited such understandable. There is some concern raised reaction, the intent of this rule clearly seems that such a rule may not be valid. That would to be aimed at preventing harassment of the be an issue of perhaps at one point for the condominium’s representatives, which is an courts or an arbitrator to decide. Keep in mind in any event that boards of directors have to extremely important issue.

What has been lost in the coverage act prudently under the current Condominium to some degree are the extremely serious Act and such a rule would have to be enforced problems that many condominium boards and in a reasonable manner.

The subject rule should also be viewed managers face relating to resident interactions and complaints. Resident complaints are in the context of recent court decisions natural and it is natural for residents at times concerning harassment in condominiums.

Harassment of condominium management to become passionate about their home and DelProperty_Condo_March_2017_FINAL.pdf 1 2017-02-14 1:32 PM the issues affecting their living situation and was addressed in the recent case of York

Condominium Corp No 163 v Robinson, a decision of the Ontario Superior Court released in April 2017. In that court decision, various court orders were made against a condominium unit owner for having communicated in a harassing manner to condominium management.

The communications were frequent, and often included insulting and degrading language towards management and other condominium staff. The court even invoked section 117 of the current Condominium Act, which prohibits residents from conducting themselves in a dangerous manner. In this case it was noted that the psychological harm to employees was of concern. This case was a more extreme situation of communications to the corporation, but illustrates that there are limits on how residents may communicate.

The subject rule involves the inevitable conflict between allowing owners to freely communicate with the condominium on one hand, and harassment or unreasonable demands on the condominium representatives’ time on the other.

One option for boards and managers to consider may be to reply and set ground rules

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if a manager is feeling harassed or a resident is ‘monopolizing’ the manager’s time. This would offer an alternative to escalating a dispute with a resident by enforcing a rule or even commencing court proceedings.

For example, the condominium may clearly outline to the resident in question that given the number of his or her complaints the board and management may not be able to respond in a timely manner. In more serious cases an owner could be advised that the corporation may simply ignore or delete email messages, for example. If these steps are taken, the board or management should clearly advise the resident that he or she can use the usual contacts (emergency numbers) in the case of genuine emergency. At this stage, it’s advisable that condominiums seek some legal guidance.

As was of concern in the Robinson decision, condominiums are sometimes reluctant to completely ignore an abusive or harassing resident in case a valid issue is raised. That is, it’s not always possible or practical to simply ignore a resident by, for example, deleting or blocking email messages. Blocking communications can be a tool in some situations; however, this does not always work.

In this regard, the writer’s office was involved in a recent unreported court decision where a resident continued to harass board members and management. When communications were ignored and/or blocked after providing notice to the resident to that effect, the harassment ultimately expanded to other parties including many other lawyers in the writer’s firm. In the end, the resident was found to have harassed the condominium and the writer’s office and was ordered by the court to stop, with a significant costs order to be paid by the owner of the subject unit.

The bottom line is that any restriction on ‘repetitive’ complaints needs to be interpreted in light of the purpose of such a rule, being the protection of condominium representatives from harassment. It would seem that repeating a complaint in itself would not violate the rule and that the matter escalates to a violation of the rule when the communications rise to the level of harassment. 1 David Th i e l i s a p a r tn e r i n th e c o n d o m i n i u m l a w g ro u p a t F o g l e r, Rubinoff LLP. He can be contacted at dthiel@foglers.com or 416-864-9700.

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GOVERNANCE

Set ground rules for directors with code of ethics

When a director joins the condo board, it BY SHLOMO SHARON is not uncommon to sense tension between the newcomer and the current members at first. Experience suggests this tension is usually the result of the new board member taking the position of “there is a new sheriff in town,” without even knowing how the board functions and what are the issues.

This kind of situation should be resolved as soon as possible in order to avoid conflicts among the board members. Left unaddressed, it may negatively affect the corporation if conflict distracts the board from looking after the affairs of the

corporation in the best interest of all unit owners in a timely manner.

To avoid a conflict as much as possible, every board member needs to understand how the board functions. In this regard, it’s important that the new

30 CONDOBUSINESS | Part of the REMI Network

board members, as well as all the current members, acknowledge their role.

Having all board members read and sign a “Directors’ Code of Ethics” document can help. This document should cover the following major items:

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P A R T

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T H E

GOVERNANCE

1

Honesty and good faith Require the board members to act honestly and not to violate the trust of owners.

It is unacceptable for a board member to put down the other board members.

2

Care and due diligence Ask board members to try to attend all board and owners’ meetings and become familiar with the affairs of the corporation, as well as the declaration, bylaws, rules and regulations, policies and the Condominium Act. Conflict of interest State that no board member should ever be in a position of conflict with respect to any matter related to the affairs of the corporation. Further, require board members to immediately disclose potential conflicts to the entire board.

3

4

Confidentiality Require board members to keep confidential any information discussed and decided upon by the board. Clarify that this information is not to be disclosed to anyone, including partners or spouses. If questions about this arise, have the board member confer with the board.

Good conduct Require board members to act in a professional and business-like manner as well as other attributes of good conduct, such as an open mind, integrity and respect.

5

6

Support Require board members to abide by the decision of the majority of the board of directors, even if they disagree. Also

acknowledge that board members have the right to express an opinion to owners on non-confidential issues.

7

Defamation Require the directors to not make any statements that would damage the reputation of the corporation or any owner, resident, director, officer, manager, staff or contractor of the corporation.

8

Minimize conflict Ask board members to promote the good image of the corporation rather than defame it. It is unacceptable for a board member to put down the other board members. It is important for the sake of the corporation to display unity.

9

Education Ask board members to enhance their knowledge by doing things such as attending condo seminars and reading trustworthy materials/articles regarding condo matters.

All of these items are geared towards ensuring that board members respect their role in governing their condo corporation. Board members new and old should review Directors’ Codes of Ethics before signing them. The property manager or the corporation’s legal advisor can help walk board members through this document to ensure that they’re all on the same page.

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Is the signing of a Directors’ Code of Ethics sufficient? Does this mean that the board members do not have the right to express their opinion if they disagree with other directors? A recent court case showed that once a decision is passed by a majority of directors after debate, no directors should attempt to undermine the decision by disclosing their disagreement to the owners and thus advancing their own agenda.

However, at present, there are no consequences outlined in the Canadian C ondominium Institute’s Directors’ Code of Ethics in the event that a director breaches the document. Nor are there consequences outlined in section 37 of the Condominium Act, which requires that a director act honestly and in good faith and to exercise the care, diligence and skill that a reasonable prudent person would exercise in comparable circumstances.

One alternative is to take legal action, which is costly and creates additional bad feelings among the condominium community. It’s important to remember that under section 37 (3) of the act, a director shall not be found liable for a breach of duties if he or she relies on a professional report rather than information which was provided to him / her by someone other than the board or property management.

Boards also have the option of passing a bylaw to permit a majority of the board to remove a director who is found liable for not acting honestly and in good faith. In the absence of such a bylaw, the board could also call an owners’ meeting and try to get the majority of unit owners to approve the removal of the director.

Having all directors sign a Code of Ethics should help prevent this type of conflict. In addition, it’s recommended that new board members take a mini training course within 90 days of being elected to learn about their duties and obligations. 1 Shlomo Sharon is the CEO of Taft Management.

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9

TECHNOLOGY

Five ways tech-savvy condo communities are using software In recent years there has been significant growth in the adoption of cloud-

BY DALE SHACKELL

based software among tech-savvy condo

communities and property managers. These communities and property managers have used such software to streamline operations and help cultivate a more connected environment.

Here are five popular ways they are embracing technology to achieve this:

34 CONDOBUSINESS | Part of the REMI Network

TECHNOLOGY

1

Communication With residents In the past, communication bet ween proper t y management and the condo communit y they managed was very static and paper based — an outdated method many communities still use today. Many digital options are now available to better communicate and connect instantly with owners.

While many condo communities have transitioned to using email, not everyone in the community has email and so new alternatives have emerged.

The use of voice and text is proving to be ver y popular. Voice messages are a digital translation of text-based announcements, which are sent from a desktop to a recipient’s home phone (this method is exceptionally important in reaching those who may have poor eyesight). Push notifications and text messages can be sent instantaneously to a recipient’s cell phone. This technology

has made it easier for property managers to send out mass announcements to their communities via multiple modes s i m u l t a n e o u s l y, re a c h i n g a h i g h e r percentage of residents and regularly keeping them up to date with relevant information.

With suppliers Property managers spend a substantial amount of time obtaining quotes for goods and services to maintain their property.

Tech-savvy condo communities are now taking advantage of the ability to store and track all purchase orders online. They are able to create a comprehensive online database of preferred suppliers.

Communication with suppliers and all relevant stakeholders can be handled entirely online. Obtaining the appropriate approvals is also just a click away. Bringing this process, online streamlines the entire process making it much easier for property managers to get things done fast.

2

Amenity bookings Amenities within condo buildings are a huge draw when it comes to attracting buyers and tenants alike. It is up to the condo corporation to make sure amenities are easily accessible and to promote fair use for all residents.

Organizing all of this can often cause massive headaches as buildings generally have many different amenities, w h i c h a l l h a ve s p e c i f i c r u l e s a n d regulations when it comes to booking and usage. This is even more difficult for corporations managing shared amenities across multiple buildings.

As a solution, many tech-savvy condo communities have implemented online amenity booking that reflects current policies and procedures. Residents are empowered to request bookings themselves, freeing up time for property managers, and this also eliminates the potential to double book. Amenities that require payments — for example,

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TECHNOLOGY

a party room deposit — can be paid for online with a credit card, adding convenience for both the resident and the management team.

3

Online proxy voting Reaching quorum is a difficult task to achieve for many condo buildings that have a high proportion of off-site owners. In order to streamline the entire process and reach quorum on the first try, many tech-savvy condo communities are looking to online proxy voting. Those using this technology are able to send out proxy voting information electronically and recipients can choose whether to vote online via proxy or attend the AGM in person.

T he management team c an track the voting st atistic s v ia an online dashboard and review the exact dates and times votes came in to inform future planning and execution. How many reminder emails were required? Should administrators have given owners more time to vote? How many votes were made by online proxy versus in person?

4

Package tracking and deliveries With huge grow th in online shopping, many condo communities have seen a major increase in packages being delivered to the concierge. Tech-savvy condo communities are using online package tracking in order to streamline and organize their delivery and tracking process to better cope with the increase.

The software is being used to log packages and automatically send notifications and reminders to recipients by email, text message, or voice message. Electronic signatures are captured and stored securely online once a package is picked up, reducing any delivery disputes that may arise.

Digitizing this process frees up time and space for the concierge and the owners and/or residents receive and manage their packages with less hassle.

5

Mobile apps There is an app for almost everything these days, even for condos. There are various software

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options on the market, including solutions that offer native smartphone apps that complement the main system.

A mobile app allows property managers to complete tasks on the go; owners and residents can book visitor parking on the fly, open a service request or work order, and upload pictures straight from their smartphone. Having a mobile app to complement the desktop version saves time and helps keep condo owners connected wherever they may be. These are just a few examples of what can be achieved through a supporting mobile app.

Tech-savvy condo communities are leveraging a variety of features by adopting cloud-based software to help streamline many previously manual tasks. Technology will continue to grow and evolve creating n e w o p p o r t u n i t i e s fo r te c h - s a v v y condo communities to become even more connected and efficient in their operations, leaving only one question — what will be next? 1 Dale Shackell is Condo Control Central’s content strategist.

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NEW AND NOTABLE

Music industry to get voice in development applications Mayor John Tory calls for economic development and culture division to be consulted on proposals at sites close to live concert venues The music industry is poised to get a voice in the review process for Toronto-based development applications.

The motion highlights yet another potential source of noise complaints in condos, which are already commonplace thanks to culprits including construction deficiencies and inconsiderate neighbours.

Mayor John Tory successfully called for economic development and culture to be added to the list of city divisions that are invited to comment on applications to amend the official plan or zoning bylaws at sites close to live concert venues (within 120 metres). The motion, which was considered at the city’s planning and growth management committee this month, aims to prevent new developments from squeezing out live concert venues.

“Providing an opportunity for economic culture and development staff to comment and provide advice on how new development can be music-friendly will ensure harmonious relationships between residents and live concert venues,” states the motion. “Noise proofing, crowd mitigation strategies or simply informing new residents that a live concert venue is nearby could help create better relationships between new communities and Toronto’s valuable concert venues.”

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