Canada’s Most Widely Read Condominium Magazine
March 2009 • Vol.24 #1
Welcoming families Market update Tax credits Soaring to new heights PM#40063056
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Contents
departments
23
Marketing Online marketing opens floodgates
25
Legal The new home reno tax credit
29
Management Project managers are tooled for success
Focus: construction
8
What's ahead for the GTA condo market? By Robert Genier
12
Welcoming families By Amie Silverwood
34
Maintenance Parking garage deterioration
18
Soaring to new heights By Michael Collins-Williams
54
Smart Ideas
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editor's Letter
PUBLISHER Steve McLinden EDITOR Amie Silverwood
Neighbourly values Condominiums should be built to fit
flawlessly
into a neighbourhood. Though they may stand above and apart, at street level they can provide something interesting for passersby. Perhaps it's the architecture, a striking entrance or shopping at grade but many architects will try to make the building fit into its surroundings. For unit owners, condominium living is a worry-free lifestyle in a convenient location. Properties with a transit connection or in a pedestrian-friendly community appeal to the urbanites who are most interested in buying a condo. Though many own vehicles, walking around the neighbourhood is a pastime many residents enjoy. Cit y of ficials prefer condominiums to be built on transportation corridors. This is a good way to accommodate a growing population in a prime location. Condominiums increase density making it easier for cities to provide essential services and public transportation. But once these condominiums are built, it’s up to management to maintain a neighbourly relationship with the street. During a snowy winter like this last one, it is easy to identify those who take this relationship seriously and those who don’t. I pass by several condominiums on my daily commute. Their driveways are well ploughed and the walkways are always salted and cleared but the sidewalks in front of the buildings are often neglected. I regularly see homeowners in front of their houses shoveling their driveways and their stretch of sidewalk by hand, always meticulous about being a good neighbour. But several condominiums that have professional services come in to clear their walkways don’t bother to extend those services to the sidewalk. They let pedestrians trudge their own paths until the city does the job itself (if it ever does). With so much said about the impact condominiums have on communities, little things like maintaining the sidewalks go a long way in establishing a good reputation for the building and for condominiums in general. Once construction is over, it’s up to management to make or break that reputation. Now that winter is over (fingers crossed), it’s a good time to walk the perimeter and think about what your condominium says to pedestrians as they pass or enter the building. Amie Silverwood amies@mediaedge.ca
6 CONDOBUSINESS | www.condobusiness.ca
ADVERTISING SALES Bruce Jones, Paul Murphy, Sean Foley, Atif Malik Senior Designer Annette Carlucci Designer Ian Clarke Production coordinator Rachel Selbie CONTRIBUTING WRITERs Robert Genier, Michael Collins-Williams, Julie Andras, James Davidson, Gino Sisera, Philip Sarvinis SUBSCRIPTION RATES
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President Kevin Brown Accounting Manager Maggy Elharar 5255 Yonge Street, Suite 1000 Toronto, Ontario 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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What's ahead for the GTA condo market? By robert genier
The combination of factors such as more moderate consumer spending,
weak labour and tight credit market conditions in the Greater Toronto Area (GTA) will result in home ownership demand for all housing types, including condominium apartments, slowing in 2009. Sales of new condominium apartments will edge lower to ten thousand units, down by 35 per cent from 2008, yet will still account for about half of the total new home buying activity – a testament to the growing popularity of this housing type in recent years. Rising demand for condominium apartments during the past few years is driving the level of high-rise construction seen today. Pre- construction high-rise sales hit record levels in 2007. When home builders were not able to allocate enough resources such as materials, equipment and labour to the new projects, it created a considerable backlog of condominium apar tments in the development pipeline. In 20 0 8 , the condominium apartment backlog was trimmed with 22,634
8 CONDOBUSINESS | www.condobusiness.ca
condominium apartments starting construction – a new record for the GTA. In 2009, condominium apartment starts will trend lower to range between 17,000 and 18,000 units due to the lower pre-construction sales in 2008 and the re-emergence of capacity constraints. As the Ontario economy slowed in 2008, businesses in diverse sectors encountered lower demand for their services and products. As inventories have built up, companies have cut
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construction
their production levels. Corporate profits have trended down. Even though last year Toronto recorded a respectable job growth of two per cent, it was mainly driven by part-time positions. In anticipation of a more pronounced economic slow down, only a few companies were confident enough to expand their operations and their permanent labour force. While the export- related manufacturing sectors had already experienced difficulties, the
impact will now trickle down to servicebased sectors because of linkages that exist with manufacturing and more broadly with the U.S. economy. It is expected that in 2009 the production level will further decline and that for the first time in 15 years the GTA job market will contract. The result will be an increase in the unemployment rate and a corresponding decrease in labour income growth.
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For more than a decade, the GTA housing market has been benefiting from strong economic fundamentals. However, the current softening in the lab our m arket w ill le ad c onsumers to c u t ex p e n d i t u re s o n b i g t i c ke t items, particularly related to housing. C ondominium apar tments which on average are priced lower in comparison to a l l o t h e r h o u s i n g t y p e s , o f te n ser ve as an entr y p oint into home ownership. Declining first-time buyer intentions will be the key factor leading to declining condominium apar tment sales in 20 0 9. Prospective first-time buyers will be most impacted by the economic downturn since many firsttime buyers have not built up enough savings to deal with temporary periods of unemployment or underemployment. Portfolio losses tied to the stock market that would-be first-time and repeat buyers might have experienced, should also play a part in the slowing homeownership demand for condominium apartments in 2009. As value of investments to be used for down payments or as trade up funds have eroded, more potential home buyers will postpone their home buying decisions until the market recovers or until they regain the capability of making the purchase. Fur ther m ore, c h ang es to lend ing practices will also impact condominium apartment buyers and home builders. According to the Senior Loan Officer Survey conducted by the Bank of Canada in 20 0 8, business lending conditions have tightened. Lending institutions have tightened the terms and standards for lo ans and have also c harg e d a premium over the cost of funds. Home buyers who will no longer be able to take advantage of discounted mortgage rates might as a result put off their home purchasing decisions. Nevertheless, not only will economic conditions shape the condominium market in Toronto, but also the demographic forces should play a role. The population in the GTA has b een aging. B aby boomers have a strong impact on the age distribution of the population. According to the last census data, the number of households in their late 50s and early 60s recorded the largest growth. Statistics Canada repor ted that the number of
10 CONDOBUSINESS | www.condobusiness.ca TRI_CAN_AD_FINAL_OCT_07.indd 1
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one-person households and households comprised of couples without children grew more than twice as fast as the general population between 2001 and 2006. An aging population combined with generally smaller household sizes will keep demand for condos buoyant in the longer term. These demographic transformations h ave alre ad y imp ac te d the housing needs and preferences in the GTA. To cater to the needs of growing groups of s i n g l e p rofe s s i o n a l s , d i vo rc e e s , pre - retirees and single parents, the new home c onstruc tion market has refo cused on the condominium apartment segment. For young single or couple households who wish to be a part of a vibrant community and require a smaller living space, the relatively af fordable condominium apar tments have become a good entry point into home ownership. Empty nesters and retirees who have been downsizing or changing their lifest yle move into ap ar tments to b e closer to cultural and recreational amenities and benefit from lower maintenance. T he share of buyers choosing a high - rise st yle of li v in g w ill re m a in at the 5 0 p e r cent range. A s n ew c o n d o m i n i u m a p a r t m e nt completions will trend higher in 2009 and 2010, an increase in the number of investor- held units in the market place will also occur. It is not clear yet how many investors in the market are in for the shor t haul, intending to sell shor tly af ter completion and registration. If investment returns are below expectations, investors may opt to rent out their units instead. They may be persuaded to do so especially i n li g ht of t h e t i g ht re nt a l m a r ket , particularly downtown. The resale market for condominium apartments will also be better supplied this year because of a rising number of households listing their units to take advantage of the market value increases over the past years in order to trade up in the market. A better choice of resale and new condominium units will dictate price growth. In 20 07, when home buyers had less selection (i.e. fewer existing home listings or lower developer-held
inventory relative to sales), competition for homes was strong and prices were bid up strongly. Price growth for resale and new condos was four times the rate of inflation. In 2008, the situation moderated somewhat. In 2009, in response to a better supplied market, there will likely be no price growth. The possibility of a stronger price decline however exists, if many investor-held units reach the market all at once.
Condominium apartments will follow a similar path to other housing types in terms of a slowdown in home buying activity over the next two years, but should hold up bet ter given relative affordability. As economic conditions improve in tandem with demographic c h a n g e , t h e G re a te r To ro nto A re a condominium apartment market should rebound and will continue to account for at least half of the market’s activity. CB
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12 CONDOBUSINESS | www.condobusiness.ca
feature
Welcoming families In Ontario’s attempt to shift
the population into
urban centres, an important component has been left out. Condominiums are being built on lands previously taken up by parking lots or other minimal uses and young professionals and empty-nesters are flocking to fill them but families are staying away. The province’s urban neighbourhoods are unsustainable without three bedroom units designed to house families with more than one child. As the urban housing stock now stands, the family-sized units available are too expensive to compete with suburban houses so families with toddlers or more than one child are picking up an moving out. By amie silverwood
feature
Cities are doing their best to encourage developers to build larger units. The City of Toronto has set a goal of 10 per cent of new units being family-sized. But at the current price levels, three bedroom units are luxury apartments out of reach for many who need them most. Those who can afford to live in the city to raise their children usually choose not to. The advantages of urban living is well known to teenagers and young adults. The trend is popular for couples who have recently sent their children packing to pack themselves up and move out of their suburban dreams into an urban one filled with nights at the symphony and strolls down shop-lined streets. But the richness of urban life seems to be lost on parents of young children. Instead, Canadian parents are programmed to retreat to their childhood memories of suburban backyards. Raising children in the city is considered inconvenient and maybe even dangerous. The appeal of a shiny new neighbourhood with detached houses but built just a little further out of town lures parents away from their urban lives and into one that is completely different. They appeal to a homogenous group of parents with similar incomes and young children. But the cookie cutter dream is, perhaps, too good to be true. A more successful neighbourhood is one that includes various housing types and families of different sizes and stages. Diverse communities are rarely found in new developments in suburbia.
14 CONDOBUSINESS | www.condobusiness.ca
They’re common in urban neighbourhoods that have been aged and have evolved over time. But to date, most North American cities have failed to convince families to live in the urban core with the exceptions of New York and Vancouver. Vancouver welcomes families Vancouver city officials were once concerned that the city was becoming an executive city for the childless rich and decided to provide opportunities for a more diverse population to move in. In the 1970s, consultants working on a city-ordered False Creek study recommended that the neighbourhood be planned as an urban mix of housing and public space and that nearby Granville Island become an urban park. City hall adopted their plan and with strict density and car limits, False Creek South welcomed a dynamic mix of people and housing with a large park and a school in the middle. When the provincial government sold the northern part of False Creek, that housed Expo ‘86, to one of Hong Kong’s most powerful business men, they asked him to include a few familyfriendly amenities on the lands. The $3 billion redesign included child care and community centres, parks, playgrounds and land for schools. It was modeled after False Creek South but also set aside 20 per cent of the housing for low-income residents and 25 per cent for family-sized units.
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Convincing families to move to False Creek was and continues to be quite simple. Locals are proud of their community and recognize that living in a large cross section of society is beneficial to children. The neighbourhood offers all the amenities families need including parks and walking trails where kids can play. Ontario’s efforts to control density Despite the success of this project and others in Vancouver, other cities in Canada have failed to emulate them. Even in Ontario where efforts to curb urban sprawl has made land more expensive and the rising prices for builders is pushing the cost of even a modest townhouse in the suburbs out of the reach of first-time buyers, most urban families have not been convinced to save their pennies by raising their children in condominiums. The trend is especially slow among residents born and raised in Canada. “They’ve always lived in condominiums in the 905,” says condo realtor Brad Lamb. “New immigrants can’t afford, in many cases, large detached homes. Those folks are often forced to move into an apartment or condo. In the city, or downtown, we still haven’t seen the manhattanization where you have an upper middle class family living in a large condominium.” Part of the problem is that family-sized units just aren’t affordable for those who need them most. Most of them are treated as luxury units and are sold to empty-nesters who have the extra money from selling their house to move into a condo. Lamb’s convinced the reason developers build such small condo units is because of the way the market works in Ontario, which is very different from how it works in large American cities like New York. The system requires buyers to choose the size of their units years before they’re able to move in. Daunted by the price of the purchase, they’re buying small units. “We have to sell units from floorplans,” he says. “In cities in the United States like Boston, they’ll build the building first and then
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they’ll sell it. So they’ll build exactly what they think they should build. So they build larger apartments because the bottom line is that people will buy larger apartments if they can touch them and feel them but they don’t want to buy them from floorplans.” It’s only when the buyer moves into the space that the size of their unit is truly understood. But by this time the buyer is two years older and their circumstances may have changed to the point that the
condo may not fit their new reality. If the first time buyer suddenly finds him or herself with a family, the situation is exacerbated. The condo may suit them for a couple of years but once a baby is born, and that baby starts walking, the space is sold for a unit with a backyard. Urban parents willing to buy a high-rise apartment are hard to find. “We’ve made attempts to try and find those people and lure them into condominium
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buildings through advertising and marketing but there’s still a built-in Canadian idea that if you have a kid and you’re going to have a family, you need to live in a house. And its very hard to shake the current generation of people who are buying because their parents told them that.” Barry Lyon, condominium consultant, isn’t so fast to give up on the trend. He expects the tides to turn in benefit of family condominiums. “The condo is growing to provide more of an evolution for individual and family needs within the condominium community,” says Lyon. “We’re falling short right now because the core market is young, first-time buyers so we’re catering to them with small units but when they get married and have their first child they’re going to be looking for something else and one of the challenges we’re going to be facing is providing for them.” Families are looking for more than just space. They need a community in which to raise children similar to the one built in False Creek. A family-friendly community has good schools, a community centre, day care opportunities and parks and recreation facilities as well as other families with which to network. But perhaps most importantly, the roads must be safe for children to cross. Roads with many lanes or a great deal of traffic are unsafe for parents with young children to cross. But as the cities start to think more carefully about how the urban centres are managed, these considerations are brought to the table. “There’s more of that coming,” says Lyon, “we’re working on that now.” Lyon cites the Toronto’s public housing projects such as Regent Park as a leader in this new trend. In Regent Park, they’ve made efforts to design apartments for the special needs of families by building with materials that will withstand more wear and tear, better soundproofing and access to parkland. Previous errors were corrected such as making the neighbourhood accessible to cars so that they can be patrolled by police but also slowing traffic down so children can cross streets safely. Perhaps the most affordable familysized units can be found in older buildings or rental units that were converted to condominiums. Resale units often offer
16 CONDOBUSINESS | www.condobusiness.ca Premier CONDO ad 2007 March FINA1 1
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more space per dollar spent than newly developed condominiums and since they were built before developers started marketing to young singles, they’re a more manageable size for those with children. Bruno Wojnowski is a property manager at a 30 -year-old condo at Harbourfront in Toronto. In the past five years, he’s had 25 families move into the building he manages. According to Wojonowski, families aren’t moving into his building because it’s affordable (a two bedroom suite in his building costs around 650 thousand) but because parents are fed up with commute times. People are willing to pay more and give up additional space in order to live closer to work. According to Wojonowski, with the children moving in comes a period of adjustment for all the residents. “They’re going to run around. They’re going to jump. They’re going to scream a little. So all of a sudden you’ve got neighbours saying, these kids are creating a noise issue. Kids sometimes are running up and down the halls.” In a building originally marketed as adult only, these growing pains can be time consuming. Families with children need some concessions made in recreational facilities. “We have people swimming lengths in the pool and all of a sudden kids come in and start jumping and splashing and everything and we’ve had requests from people saying, can you set up a kids' only swim time? And can we set up kids’ functions? In our building, we have aerobics classes and various classes for fitness and they’re saying that we have nothing geared towards children. So we’ve had some of these families approach us and say, hey, let’s do something for the kids.” Wojonowski put the question back to parents asking them to organize activities that are of interest to them. Adults who swim laps in the pool will then know not to swim at the designated kids' hour and parents are able to arrange play function with their children making friends and contacts within the condominium. As more and more families are looking to shor ten their c ommutes, condo apartments will become increasingly appealing. But families will need the support of the communities, property managers and city officials in order to make a good go of it. CB
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March 2009 17
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Soaring to New Heights and Styles In a global rush to urbanize cities
across the planet, buildings are pushing the upper boundaries of height and expanding our horizons in terms of unique architectural designs. Cities such as Shanghai, Dubai and Hong Kong are reimagining themselves through intensification and re-urbanization. Here at home in Toronto we aren’t quite in the big leagues yet, but we are definitely soaring to new heights. With rapid residential intensification having an unprecedented impact revitalizing old neighbourhoods and creating new neighbourhoods, the only question is, what does the future hold?
The recent explosion of new growth in Toronto has increased the pressure to maximize the potential of a limited supply of land. This means that on prime downtown locations close to public transit and urban amenities new condo projects are getting much taller. A few years ago, 40-storey condos were raising eyebrows. Today, however, a whole new generation of residential projects is set to push the limits of height even higher. In 2009, the skyline of the city will continue to evolve with a number of significant projects
By Michael collinS-williams
18 CONDOBUSINESS | www.condobusiness.ca
entering a more advanced stage of construction. The Ritz Carlton is scheduled to top out midway through the year and the Trump Tower, Living Shangri La and Four Seasons towers will start to carve their own profiles into the city skyline. A number of other high profile residential projects including the 80-storey One Bloor East by Bazis, the modernist 50-floor 300 Front Street West by Tridel and the 75-floor Aura by Canderel Stoneridge could each break ground this year as well despite the economic downturn. While sales volumes are anticipated to slow over the next couple of years, the long-term trend of taller buildings and infill projects on major avenues is set to grow. Increased
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“
There is a growing consumer
awareness of the merits of quality design.
competition bet ween developers, a growing culture of design excellence and knowledgeable consumers will ensure that high - quality architectural design will be a key consideration in most new projects, especially those proposed in the urban centres. There is a growing consumer awareness of the merits of quality design due in part to escalating competition, greater media attention and the redevelopment of a number of major cultural institutions across the city. Toronto is truly experiencing an architectural
renaissance across the city as developers are making significant investments in top quality designs. Both the public and philanthropic sectors are investing in new and expanded cultural, academic, research and medical facilities that each place design as a top priority. There are two important contributing factors to the significant changes in approaches to residential development across Toronto and the GTA in the past few years. Firstly, due to improvements to design quality and changing consumer
20 CONDOBUSINESS | www.condobusiness.ca
”
lifestyle preferences that favour an urban approach, there is greater public demand for medium and high density projects in an urban setting. Many young people are not looking to live in the same suburban setting in which they were raised and crave the excitement of ‘big-city’ living. Fur thermore an aging population is slowly shifting demand towards smaller homes with no stairs or in many cases a condominium or townhouse. The greying of the baby boomer generation will result in significant changes to the urban fabric as there will be a need for amenities to be accessible and located within the local community. A second driver towards greater levels of intensification and mixed - use, or ‘complete communities,’ is the number of fairly substantial provincially-led initiatives that will provide clear direction as to how new communities, both urban and suburban, will be constructed in the future. The province has developed a growth plan for the Greater Golden Horseshoe called Places to Grow that sets out a vision for one of the fastest growing metropolitan areas in North America over the next 25 years. This region will be home to a forecasted additional 3.7 million people by 2031. Accommodating these additional people requires careful planning to ensure that the Greater Golden Horseshoe continues to offer an exceptional quality of life with a wide variety of choices for housing, employment and entertainment. To accomplish the goal of healthy sustainable communities, the province has implemented a greenbelt to restrict growth in a 1.8 million acre zone north of the GTA and is in the process of implementing the growth plan. The growth plan is a legally binding plan that will be incorporated into
March 2009 21
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municipal zoning bylaws and official plans the way that future growth occurs and with requirements to achieve specific ultimately what the communities that we density and population targets. Furthermore live in will look like in the future. the province has made amendments to Furthermore recent changes to the the Provincial Policy Statement, which City of Toronto Act allow for the city guides all planning decisions made by to implement a design review panel to municipalities and the Ontario Municipal comment and make recommendations Board as well as development planning on the exterior design of significant new process changes to the Planning Act. The development projects (both residential and cumulative impact of these legislative and other sectors). To date, a few projects DBS_Aug07_SOLISCO.pdf 7/31/07 12:41:42 PM regulatory reforms is intended to shape have undergone design review in the
initial pilot areas that the city has set up. The developers of Aura, located at Yonge and Gerrard, even chose to participate in a voluntary design review exercise which resulted in a number a major improvements to the overall appearance of the project, especially at street level. Other recent legislative changes to the Planning Act allow for municipalities to imp lement ad ditional re gulator y restrictions regarding exterior materials utilized in new developments. Urban planners and architects are spending more time ensuring that new buildings are bet ter integrated into surrounding communities. No building is an island onto itself and it is critical that new structures take cues from their immediate surroundings. This essentially means that architectural context is an important consideration. Buildings in urban settings should meet the street in an urban manner and contribute positively to the pedestrian ex p erienc e by hav ing an anim ate d façade, often with retail uses at the base and higher quality materials where the structure meets the street. The general experience that the average person has with a building as they pass by or enter is in the first few floors, which is why planners and architects are putting more energy to ensure that the base of new condos, often referred to as a podium, successfully engages the public. Through a maturing urban housing market and provincial policies that direct new growth into existing downtowns and along transit lines, the future of the new condo development industry will have its challenges, but should be very bright. The development industry is evolving in terms of its approach to new condos and the new high-density communities that will be constructed in the future. Shifting consumer preferences and awareness to quality architecture as well as some regulatory changes are creating more dynamic and unique projects. Toronto is still a young city, but it is clear that it has now entered a stage of maturation as it continues to intensify and become a city where design matters. CB Michael Collins-Williams, RPP, MCIP, is the Director of Policy for the Ontario Home Builders’ Association.
22 CONDOBUSINESS | www.condobusiness.ca
marketing
Online marketing opens floodgates
By julie andras
The internet has changed how real estate market
the
operates and it continues to evolve on a daily basis. There has never been the reach there is now to attract prospective tenants and purchasers, with listing sites like craigslist and viewit.ca. Add in the other methods of attracting prospects, like newspaper advertising and dedicated real estate magazines: the floodgates have opened.
To keep traffic down and avoid the inconvenience multiple showings impose on other residents, it is important to provide plenty of information at every stage of the process so that time is spent showing the unit to those who are seriously considering making the purchase and the inconvenience to residents is kept at a minimum. Online listings can list a number of criteria – from price to amenities. Listing features like pools, balconies, rooftop gardens or party rooms ensure the traffic going through the unit knows what the building can provide. But it is just as important to list items that make the condominium less attractive to potential buyers and will be immediately apparent at the showing. Once the showings begin, it is important to ensure that the unit is leased or sold as quickly as possible and that March 2009 23
marketing
other residents are not inconvenienced. Other residents will not want the ongoing stress of strangers wandering the halls, so taking the opportunity to condense it into an open house is a considerate means of maximizing the traffic, while minimizing disruption. Ahead of the open house, advise tenants, particularly those in closest proximity, when it will be held and how many viewers are anticipated. For all
concerned, the ultimate goal of the open house is to get the property leased or sold as quickly as possible to minimize the time, disruption and expense associated with the process. T here are several to ols that c an facilitate and enhance an open house and move the viewers from consideration to decision more quickly. Information is key and the more that is provided the more quickly the unit can be taken off the
24 CONDOBUSINESS | www.condobusiness.ca
market. Property managers who prepare a realtor’s package will find the results well worth their efforts. For the unit itself, a feature sheet is d esirab le, w ith not onl y the ro om dimensions, but also a list of appliances, as well as a clear outline of which utilities are included and which are the responsibility of the tenant. A schedule of fees should be clearly laid out so prospective buyers are prepared for future expenses. I t g o e s w i th o u t s ay in g th at the condominium should be sparkling for the open house. Even the most qualified buyer can be deterred by a showing that is degraded by a floor that is unclean. Again, the goal is to move the unit as quickly as possible and this is one of the most basic means to do so. To a s s i s t p ro s p e c t i ve b u ye r s i n determining the legitimacy of a property, information should always be available on the property manager and how the condominium is run. Serious shoppers want information on the building as well as the unit. A list of recent maintenance and upgrades is important since it shows how the building operates on an ongoing basis. Anyone who understands condominium living will be assessing the reputation and track record closely. F in all y, a ni c e to u c h is to h ave info r m ati o n o n t he nei g h b o u r h o o d available. Local tourist offices will often be able to provide pamphlets or brochures and it can make the difference between one unit or another when the prospect feels time has been taken to assist them in the process. One of the greatest advantages of open houses is that they create an atmosphere of a nt i c i p a t i o n fo r t h o s e w h o a re genuinely interested in a property. Other visitors’ comments on how the bedroom size is perfect or how well the kitchen is laid out, create a sense of urgency so that the buyers may move more quickly to place a bid. The online phenomenon has completely changed they way people look for homes. By running effective open houses for informed shoppers, the new reality of multi- channel property marketing can ease the process for everyone involved. CB
legal
The new home reno tax credit
By james davidson
The Federal Government’s 2009 Budget contained
various items intended to stimulate the sunken economy. One of those items was the new Home Renovation Tax Credit (HRTC).
LEGAL
The Tax Credit The HRTC is a non-refundable income tax credit available to families for certain types of renovations to the principal residence of one of the members of the family. The tax credit is essentially available to homeowners (and their families) for renovations to their homes. The credit does not apply to business renovations or to renovations in respect of residential tenancies. What about Condominiums? The credit can, of course, apply to unit renovations (if the unit is a principal residence and all other requirements are m et ). Bu t w h at a b o u t c o mm o n element renovations? According to the Canada Revenue Agency (CR A ), “In the case of condominiums and co-operative housing corporations, the individual’s share of the Corpland_Condo_Nov08.pdf 11/25/08 4:59:36 cost of eligible expenditures for common areas will qualify.” S o, if a condominium corporation c ar r ies o u t a q u ali f y in g ren ovati o n
during the applicable period, and if any of the units in the condominium are principal residences, then the credit c an apply to the owner ’s share of the cost (in the case of those qualifying residences). T h e i n d i v i d u a l ’s s h a r e i s determined by taking the condominium corporation’s cost and then applying the percentage contribution for the particular unit (found in the condominium d e c l a r a t i o n ). T h e r e i s n o requirement that there be a special assessment. If only part of a unit is used as a principal residence, CRA says that the expense must be divided between the “personal use and income-earning use.” For condominiums containing any residential PM units, there may be an added reason to per form qualif ying renovations between
26 CONDOBUSINESS | www.condobusiness.ca
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n o w a n d F e b r u a r y 1, 2 0 10 . S o m e ow ners m ay b e entitle d to re c ei ve income tax credits for 2009. Most reserve fund expenditures will qualify. Most improvements will also qualify. Maintenance that repeats annually generally will not qualify. For each qualif ying renovation performed, the condominium corporation should prepare a separate
statement of all costs incurred by the condominium corporation in relation to that renovation (including all of the sup p or ting d o cument ation re quire d by CR A – see the CR A website for more detail); and provide that package (along with a copy of the schedule of percentage contributions contained in the Declaration) to all owners, as early as possible in 2010. (Preferably, these
S ta n d Ta l l e r t h a n T H E R E S T Become an RCM Registered Condominium Managers have the recognition, skills and training to earn more and move their careers to greater heights. RCMs are trusted because they uphold the strict guidelines of the ACMO Code of Professional Ethics and are answerable to their peers through a formal review process. RCMs know more. The comprehensive curriculum of the Condominium Management and Administration Certificate Program, offered in class and online through the Ontario Community College system, prepares them well for the rigorous RCM exam. RCMs have a minimum of two years’ experience as condominium property managers before they can receive their RCM designation. RCMs are in demand more than ever. Management companies and condominium boards are looking for qualified, experienced and accountable managers. The RCM by your name moves you to the top of their list. Learn more about becoming an RCM. You may qualify for an education equivalency exemption.
The Association of Condominium Managers of Ontario 6835 Century Avenue, 2nd Floor Mississauga, Ontario L5N 2L2 t. (905) 826-6890
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p a c k a g e s s h o u l d b e d i s t r i b u te d i n February or March 2010, so that owners can meet the A pril 3 0 tax repor ting deadline for the previous year.) Each owner will then do what he or she needs to do to claim the credit with the 2009 tax return. The credit will only be available for the 2009 tax year and applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1, 3 5 0 ( $ 9,0 0 0 x 15%). Remember, in the case of a condominium, these numbers apply to the owner’s share. The credit will be based on eligible expenditures for work per formed or goods acquired af ter Januar y 27, 20 0 9 and before Februar y 1, 2010. Expenditures incurred pursuant to an agreement that was entered into before January 28, 2009 will not be eligible for the credit. To be eligible, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling and includes the cost of labour and professional ser vices, building materials, fix tures, rentals, and permits. Again, eligible expenditures must be supported by acceptable documentation. T h e c o s t of ro u tin e re p air s a n d maintenance normally performed on an annual or more frequent basis will not be eligible for the HRTC. Other ineligible expenditures include expenditures that are not integral to the dwelling and other indirect expenditures that retain a value independent of the renovation, expenditures for appliances and audiovisual electronics and financing costs. CB
toll free: 1-800-265-3263 email: rcm@acmo.org www.acmo.org
Do you have what it takes to reach for the top?
For more information respecting their particular situations, condominium owners or corporations can consult the CRA website at www.cra-arc.gc.ca and search under “Home Renovation Tax Credit.”
NEW! Physical Building Management course is now offered outside Ontario
James Davidson, LLB, FCCI, is a lawyer with the Nelligan O’Brien Payne LLP Condominium Law Group.
28 CONDOBUSINESS | www.condobusiness.ca
MANAGEMENT
Project managers are tooled for success By Gino sisera
One of the best ways to save money during a
construction project is to hire an
experienced project manager to oversee construction. The project manager will direct the project from preconstruction to the completion of the post-construction phase and will ensure a successful undertaking performed on time and within budget.
Management management
The success or failure of any project depends on the manager’s experience with similar projects. Skilled property managers oversee the success of small, medium and large capital projects from building construction to restoration projects in occupied properties. From a property manager’s point of view, a project manager is invaluable in offering services that are performed as part of his or her services in the pre-construction phase, the construction phase and the post-construction phase. Finding the right fit The first step is for the Board of Directors to select a representative from their midst and to define the parameters in which he or she will make decisions. Some decisions will be made solely by the representative and some must be taken back to the Board for a discussion and vote. This representative will take on the responsibility of overseeing the project alongside the project manager. The Board of Directors then hire a qualified project manager to steer the project under the direction of the Board and their representative. During the preconstruction phase, the project manager acts as the corporation’s agent to find the right consultants to advise the project manager and the Board’s representative throughout the different stages of the project. During the selection process, consultants are inter viewed and scrutinized based on their abilit y to
perform the required work. An analysis is performed on the consultant’s fees to ensure that they are within industry standards. The project manager can arrange for bid calls to consultants and prepare the necessary prequalification criteria. Once the project manager receives and analyzes the bids, he or she would make a recommendation to the representative who would relay this rec ommend ation to the Bo ard of Directors. Once the choice of consultants has been made, the project manager prepares the trade contracts for execution and ensures that all required bonds, insurance policies and workers compensation certificates are provided. The project manager assists the construction management team (consisting of the Board’s representative, the property manager, consultants and someone representing the tradeworkers) in obtaining all approvals, permits and licenses required for the project. He or she assists the representative to arrange for legal surveys of the project. Accountability to one’s role The project manager is responsible for the maintenance of base lines and levels but trade contractors are responsible for detailed job specification. There is a great deal of work to be undertaken before the project is started and having the right consultants available is key. Project meetings should take place to ensure
Temporary services may be required Arrangements for the supply of temporary services and site facilities should be made during the construction planning phase and may include the following: office accommodation and supplies site hoarding access storage areas temporary power and lighting temporary enclosures heating drainage and water facilities
30 CONDOBUSINESS | www.condobusiness.ca
job offices job security materials personnel hoisting facilities and equipment safety measures access stairs and ladders protection of finishes continuous cleanup
management
that everyone understands the full scope of on their own responsibilities. It is incumb ent up on the projec t manager throughout the construction to at tend regular meetings with the construction management team, during the development of conceptual and preliminary design and preparation of working drawings. The project m an a g er a d v ises o n site uses an d improvements, materials, building systems and equipment and provides recommendations on construction feasibility, availability of materials and labour, time requirements for installation and construction and factors related to cost. The project manager provides liaison and co - ordination among government authorities, utility companies and other authorities having jurisdiction over the property. A budget should be prepared and updated periodically for the representative and estimated based on a quantity survey of drawings and specifications at the end of the schematic design phase. The project manager should notify the representative whether the budget will be met or make recommendations for corrective action and provide all possible alternatives that will satisfy the design concept and the schedule. It is necessary th at info r m ati o n o n the p roje c t is communicated effectively to the property manager and the Board of Directors.
payments. A refined process will expedite services does not relieve the contractors the processing of invoices. of their responsibilities for the safety of Project managers periodically inspect persons and property or for compliance the contractors’ work for defects and with the federal, provincial and local deficiencies and review each of the statutes, rules, regulations and orders contractors’ safety programs to make applicable to the conduct of the work. appropriate recommendations. He or The project manager should be she is not required to make exhaustive knowledgeable enough to ensure that or continuous inspections of safet y any of the representative’s concerns are precautions CARMA_CondoBusiness_01-19-2009_CS2--F.pdf in connection with the project clarified 2/3/09 or he or5:41:35 she should speak to one PM and his or her performance of these of the project’s consultants in order to
Organization is key T h e p ro j e c t c a n b e c o m p l e te d o n schedule if it is well organized. The project manager will provide advice on labour problems that may arise in order to minimize work stoppages and in the set tlement of jurisdictional or other labour disputes. The project manager should provide for and administer the necessary procedures to permit recovery of all tax rebates where applicable. He or she also implements a system for the preparation, review and processing of change orders. Tr a d e c o ntr a c to r s’ p ay m ent s are developed and implemented with the ap proval of the represent ative and p ro p e r t y m a n a g e r. T hi s p ro c e d u re i n c l u d e s t h e rev i ew, c e r t i f i c a t i o n , processing and payment of applications by trade contractors for progress and final March 2009 31
management
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gain clear answers for the representative and the Board. The consultant will also establish and implement procedures for expediting the receipt, processing and review of shop drawings, reports and project site documents. The project manager shall submit written progress reports to the representative and the consultants including budget and scheduling information. A log about the project as a whole should be made available and kept up to date with records of all contracts, drawings, samples, purchases, materials, equipment, maintenance and operating manuals and instructions and other construction-related documents, including all revisions. Post-construction paperwork Through the post- construction phase, the project manager and consultants will maintain a close relationship with the Board’s representative and property manager to ensure a smooth and proper takeover of the project. The project manager and the consultants arrange for the trades to certify their jobs on the project and they will provide written notice to the Board that the work is ready 2:08:26 PM for the final inspection. At the completion of the project, subject to applicable legislation, they also prepare a list of incomplete or unsatisfactory items and a schedule for their completion. The project manger will distribute s u b s t a nt i a l p e r fo r m a n c e a n d to t a l p er for mance cer tific ates, seek and transmit warranties, affidavits, releases, bonds, waivers, manuals and record drawings to the consultant and turn over all keys and maintenance stocks. A bind er of all of the c ontra c tor s’ administering warranties, operating manuals and back up documentation is left with the representative. The project manager can oversee a successful project that has been completed on time and under budget if he or she is supported by the Board, property manager, consultants and trades through conscious effor ts and good communication habits. CB
Gino is the President/CEO of Samuel Property management Ltd.
32 CONDOBUSINESS | www.condobusiness.ca
advertising feature CASE STUDY DIRECT ENERGY BUSINESS SERVICES
GOING GREEN IN THE CONDOMINIUM MARKET More than 17 percent of the energy consumed in Canada is used to run our homes. Prudent condominium owners and developers are focusing on energy efficiency in buildings in efforts to lower operating costs and build a better bottom line. Energy efficient condominiums can result in reduced utility bills, reduced greenhouse gas emissions, increased resale values, improved resident living space and comfort, and reduced strains on our energy supply. In today’s economic times, going “green” can lead to more green in the wallets of building owners and residents. The challenge Condominium owners are committed to maximizing the comfort of their residents while recognizing the need to be energy efficient, reduce operating costs and improve systems. The building operates 24 hours a day and, as such, the electrical and mechanical systems operate to keep pace with the occupancy of the building. Although systems may appear to be functioning well in a facility, there are opportunities to reevaluate the aging systems to identify savings. Energy retrofits designed to save money over the long term and improve the life of the systems in a condominium is an integral part of the overall energy management program. The savings potential There is a substantial energy savings potential in the condominium market, particularly in light of the aging condition of the building stock. Energy efficiency retrofits can be combined with upcoming infrastructure renewal (through the reserve fund that is maintained for the purpose of repairs and replacements of common elements) and renovation work to maximize cost-effectiveness. The solutions A number of energy efficiency solutions utilizing the latest cutting edge technology and innovations are suitable for the condominium market. ÝÛCa_`laf_Ûmh_jY\]k ÛÛ>j]Yl]jÛkqkl]eÛ]^^a[a]f[a]kÛ[YfÛZ]ÛY[`a]n]\Û by upgrading inefficient lighting systems with current T8 technology dYehk Û[gehY[lÛ^dmgj]k[]flÛdYehk Û]d][ljgfa[ÛZYddYklk ÛYf\ÛC<;Û exit signs.
ÝÛCa_`laf_Û[gfljgdk ÛÛJgdmlagfkÛkm[`ÛYkÛg[[mhYf[qÛk]fkgjk Ûh`glg[]ddk Û stand-alone control and dimming solutions, and daylight harvesting controls can optimize lighting usage. ÝÛGgo]jÛ^Y[lgjÛaehjgn]e]flk ÛÛGgo]jÛimYdalqÛ[YfÛZ]Ûaehjgn]\Û through the installation of capacitor banks. ÝÛ9mad\af_Û8mlgeYlagfÛJqkl]ek ÛÛ@ehd]e]flYlagfÛg^Ûgh]f¤hjglg[gdÛ building automation system with energy management strategies allow for greater control of electrical and mechanical systems. ÝÛM]fladYlagfÛghlaearYlagf ÛÛ@ehjgn]\Ûj]khgfk]ÛlgÛnYjaYZd]Ûkqkl]eÛ \]eYf\kÛ[YfÛZ]ÛY[`a]n]\Ûoal`Ûl`]ÛafklYddYlagfÛg^ÛMYjaYZd]Û =j]im]f[qÛ;jan]k ÝÛGmehaf_ÛghlaearYlagf ÛI]\m[]\Û]f]j_qÛ[gfkmehlagfÛ^gjÛ\ge]kla[ Û heating and cooling water pumping by controlling pump speeds mkaf_ÛMYjaYZd]Û=j]im]f[qÛ;jan]kÛlgÛhj]kkmjar]Ûl`]ÛoYl]jÛkqkl]ekÛ gfdqÛlgÛl`]ÛeafaemeÛd]n]dÛj]imaj]\ÛlgÛhjgh]jdqÛ\akljaZml]Ûl`]ÛoYl]jÛ flow where it is needed. ÝÛ?]Ylaf_ÛYf\Û[ggdaf_ÛhdYflÛmh_jY\]k ÛÛÛ;]ka_fÛ]^^a[a]f[a]kÛafÛ installation of high-efficiency boilers and chillers to better manage heating and cooling loads of the building. ÝÛ >j]]f Ûj]ljg^alk ÛÛFhlagfkÛkm[`ÛYkÛ_]gl`]jeYdÛkqkl]ek Û_j]]fÛ roofs, wind power, co-generation systems that emphasize use of renewable energy resources. ÝÛFl`]jÛkqkl]ekÛkm[`ÛYkÛgrgf]Ûlqh]ÛoYl]jÛhmja^a[YlagfÛkqkl]ekÛ^gjÛ swimming pools The right partner ;aj][lÛ<f]j_qÛ9mkaf]kkÛJ]jna[]kÛakÛYfÛ]ph]jlÛYlÛ]pljY[laf_Û[gkl¤]^^][lan]Û energy savings from existing buildings. We bring industry knowledge and innovative thinking to energy retrofits and energy management hjg_jYek ÛÛFmjÛYhhjgY[`ÛakÛYdd¤]f[gehYkkaf_ ÛÛN]ÛYhhdqÛgmjÛaf¤\]hl`Û technical knowledge of heating, ventilation and air conditioning, lighting, energy recovery, motor loads, and electrical and mechanical systems to every aspect of the task. We do it all – from energy audits to developing energy specifications. For further information, please contact Jeff Jarvis, National Sales Manager - Energy Services & Technology, Direct Energy Business Services Limited at jeff.jarvis@directenergy.com or 613-247-9855.
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maintenance
Parking garage deterioration Parking garages are exposed
to the most severe
environmental and user-related conditions of almost any building type. They are
subjected to constant soaking, road salt contamination, severe temperature fluctuations, snowploughing, tire wear and vandalism but are expected to offer trouble-free operations over the course of their service lives. Deterioration of parking garages leads to millions of dollars in repair costs annually in Canada alone.
The main cause of parking garage By phillip sarvinis They must not only understand how parking garages are designed, but also how they deterioration is road salt, which contaminates behave when subjected to environmental the structural parking slabs of the garage. As and user-related conditions. the snow melts off the vehicles and drips onto the structural Once a decision is made on how to proceed, the physical slab, it migrates to the embedded reinforcing steel. Once the repair work is relatively straight for ward for a qualified salt and water reach the embedded reinforcing steel, a chemical contractor. However, what tends to be overlooked is the reaction breaks down the steelâ&#x20AC;&#x2122;s passive protective layer. As effect of site restrictions on building operations (i.e. noise, this passive layer breaks down, steel corrodes and the concrete dust tolerance, phasing, etcâ&#x20AC;Ś). This is the portion of the structure deteriorates. project that creates the greatest headaches to the owners, Restoring a parking garage is not a cut and dry process. the Board and the management team. One must understand There are many options available ranging from localized how a repair program will affect building operations in order repair and protection programs to complete slab replacement to select the most cost effective repair strategy that meets programs. The key is knowing which one is most suited for the both the financial restrictions and site constraints associated situation at hand. An engineering consultant must have vast with the project. experience in the rehabilitation of parking garages in order to Once the deterioration has been identified in a parking provide the Board of Directors with all the information they garage, the Board may choose localized repair and protection, need to make a prudent decision on how to move forward.
34 CONDOBUSINESS | www.condobusiness.ca
Corp ad 308:CondoBus3/01
complete top of slab replacement, complete slab replacement or to do nothing. Localized repair and protection This option is typically the most cost effective in the long term when the level of concrete deterioration is minimal and the distress is randomly located throughout the garage. The repairs typically involve the localized removal of the deteriorated concrete, preparation of the exposed reinforcing steel and the installation of new concrete repair material. W ith respect to waterproofing, if the waterproofing system is still effective, it can also be replaced locally at each repair location. If it is no longer effective, it would be prudent to replace the system in its entirety. If there is no waterproofing system, one should be installed to protect the parking slab and the repairs from the further ingress of salt and moisture and to significantly reduce the rate of
3/4/08
9:07 AM
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We Manage the Quality of Your Lifestyle. Not Just a Building. For condominium management services that go well beyond your expectations, please call Gino Sisera or John Wannamaker at (416) 398-5757 for information. Discover a level of personal attention, commitment and care far superior to anything you have yet experienced. After all, your home does deserve the best.
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maintenance
ongoing deterioration. This option can be implemented to allow the operation of the garage to continue with only some lost parking. Complete top of slab replacement This option is cost-effective when there is a significant amount of parking slab surface deterioration, but only localized deterioration on the underside of the suspended parking slab. This option
M&E
involves the complete removal of the top four inches of the suspended parking slab and disposal of the slabâ&#x20AC;&#x2122;s exposed reinforcing steel. New reinforcing steel is installed and the top half of the parking slab is replaced with new concrete repair material. At locations where the underside of the slab is deteriorated, it would be repaired as a full depth repair. Upon completion of the concrete repairs, a new waterproofing system would be installed.
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This option can be implemented with only partial garage closure. Complete slab replacement When the extent of deterioration on the surface and underside of the suspended parking slab is significant, the most costeffective repair option is the complete slab replacement option. This option involves the complete removal of the existing parking slab (concrete and reinforcing steel) and the construction of a brand new slab utilizing current standards and products. This option is the most aggressive option and will require full closure of the garage. Do nothing When the garage is performing well and is experiencing little to no signs of structural deterioration, the choice may be to do nothing. It will continue to deteriorate until one of the above three options is required. Regular maintenance of the waterproofing system in a garage of this type will reduce the rate of ongoing deterioration and prolong the need for any of the other options. However, if owners choose to do nothing to a garage which has experienced corrosion-related deterioration already, it will result in ongoing deterioration at an accelerated rate and eventually complete failure of the facility. Deferred structural and waterproofing repairs can lead to deficiencies, premature deterioration and may result in partial collapse of the structure. Structural deterioration is unsafe, costly to repair and results in lost parking while the repairs are underway. The key to choosing the appropriate repair and having a successful re h a b i l i t a t i o n p ro g r a m i s h av i n g a qualified engineering consultant who specializes in parking garage rehabilitation and understands how they behave as d e te r i o r a t i o n o c c u r s . A n a c c u r a te assessment of the garageâ&#x20AC;&#x2122;s condition is required and must be presented to the Board and management team such that a prudent decision on how to move forward on the issue can be made. CB Philip Sarvinis, P.Eng. is the Managing Principal of Building S cienc e a n d R e s to ra ti o n fo r R e a d J o n e s Christoffersen Ltd.
36 CONDOBUSINESS | www.condobusiness.ca
Leaders in Condominium law
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smart ideas legal
Roll out the red carpet to families Families with children are finding more and more reasons to live in urban areas and condominiums are becoming a more popular choice for this demographic. But once families move into the building, what can property managers and condo boards do to make them feel welcome? Busy parents always appreciate a helping hand.
Make sure real estate agents are aware of all the kid-friendly measures the condominium and nearby community have in place.
Organize events to keep the kids busy and allow parents a little free time. Condominiums that have a weekly play group will stand out among the rest. Have parents take turns organizing and supervising games nights in a common area and post the schedule somewhere noticeable for real estate agents to point out to potential buyers.
Set up family-friendly services with a group discount for residents. These can include grocery deliveries that everyone will appreciate or nearby businesses that cater to children. Donâ&#x20AC;&#x2122;t forget the kids when planning movie nights or swim schedules. Residents without children will also appreciate it if children have designated play times in common areas.
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