Issuu

CANADA’S NATIONAL PUBLICATION FOR APARTMENT OWNERS AND MANAGERS

VOLUME 12 / NUMBER 5 / NOVEMBER 2015

www.REMInetwork.com

EMBRACING THE FUTURE GWL Realty Advisors’ Anne Morash talks tech and the purpose-built rental scene

Technology Issue Smart Apartments The Internet of Things Elevator Equipment & Maintenance PA R T O F T H E

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ADVERTORIAL

A MESSAGE TO ALL

BUILDING OWNERS AND PROPERTY MANAGERS.

Changes to Electricity Regulations in Ontario that take effect on January 1, 2016 will have a direct impact to electricity costs for Residential Apartment Buildings, Coop Housing and Residential Condo Corporations. Changes to Ontario Regulation 493/01 provides an exemption from paying the Debt Retirement Charge for any electricity consumed on or after January 1st, 2016 up to a maximum of 1500 kwh a month, multiplied by the number of eligible units. The catch is, a new exemption or declaration form needs to be submitted to the utility before December 31, 2015. If the form is not received by that date, the electricity customer will continue to be charged the Debt Retirement Charge until the form is received by the utility, and will not be eligible for a refund of those charges. You need to submit the new declaration form if the building (Residential Apartment Building, Residential Condo or Coop Housing) does not have a separate meter for each individual residential unit. If each unit has a separate electricity meter, the declaration form is not required. Process sounds simple enough, although it has come to our attention that some of our clients have not received the new declaration forms, and have also been misinformed by the utility’s telephone agents; informing our clients that they are only to fill out the declaration form associated to the specific account the letter was meant for; even if they have multiple sites and multiple accounts. If you have not received the new declaration form from your utility by now, I would strongly recommend that you give us a call or send us an email (you can also contact your utility directly if you wish) because time is running out.

BRIAN McCANN President and CEO Your Electric Bill Analyzed For You Inc.

Editor’s Note

It’s a Wireless World

/cammediaedge /cdnapartmentmag /mediaedgecam

Technology advances quickly, and over the next few decades one of the biggest changes will likely be the way we interact with our appliances, buildings, cars and roads. Called the “Internet of Things,” everything we own will soon be equipped with wireless sensors that collect and exchange information—potentially making numerous aspects of our lives better, safer and more efficient. With new “smart” products hitting the market every day, it’s only a matter of time before the apartment industry truly benefits. Canadian Apartment contributors Chaim Rivlin and Jessica Green both predict that soon enough, marketing your rental properties as “smart apartments” will be the norm rather than the rare exception. Find out what features will be leading the way on pages 32 and 41. Looking back at recent history, our Industry Influencer Anne Morash provides us with an entertaining glimpse at how things used to be compared to the current workplace and landlord-tenant dynamic. As a trusted real estate executive for 30-plus years, Morash is excited by the possibilities technology and the digital world have brought to the multi-family sector and paints a bright picture of things to come. Read our interview with the Senior Vice President, Multi-Residential, on page 23 and find out about some of GWL Realty Advisors’ new and exciting developments. From the latest transactions and market info, to our industry news bites and smart ideas, we hope you enjoy the issue and we encourage you to stay connected daily via www.reminetwork.com and our social media channels. We also wish you and yours a happy, safe and ‘disconnected’ holiday season.

Editor

Erin Ruddy

Associate Publisher

Mitchell Saltzman

Senior Designer

Annette Carlucci

Designer

Jennifer Carter

Production Manager

Rachel Selbie

Production Coordinator Karlee Roy Contributing Writers

aula Gasparro, Derek Lobo, P Jessica Green, Richard Vilner, Chaim Rivlin, Andy Schwartze

National Sales

Sean Foley, Stephanie Philbin

Digital Media Director

Steven Chester

Circulation

Maria Siassina For sales information call (416) 512-8186 ext. 248

Canadian Apartment Magazine is published six times a year by:

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President Kevin Brown Group Publisher Melissa Valentini Copyright 2015 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140X Circulation ext. 234 Subscription Rates: Canada: 1 year, $50*, 2 years, $90*, US $75 International $100, Single Copy Sales: Canada: $12* * Plus applicable taxes Requests for permission to reprint any portion of this magazine should be sent to Melissa Valentini Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions.

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Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor. The opinions expressed are those of the authors of articles and do not necessarily reflect the views of Canadian Apartment Magazine. This information is general and is not a substitute for legal advice.

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

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CONTENTS COVER STORY 22 Industry Influencer

GWL Realty Advisors’ Anne Morash explores the evolution of the industry and highlights key developments in technology and the purpose-built rental scene

FEATURE 18

Overcoming the Language Barrier By Huiping Iler

By Erin Ruddy

COLUMNS 10

Transactions GTA Market Report By Richard Vilner

CMHC Doing it Right with Data By Paula Gasparro

Legislation BOMA Calls for Fairness in Energy Reporting By Barb Carss

Newsworthy Down with the Old, Up with the New By Erin Ruddy

28 Portfolio The iPhone Landlord By Derek Lobo 32

Management Apartments and the Internet of Things By Jessica Green

36 Insurance Lender Insurance Requirements By Andy Schwartze 40 Marketing Technology and the Modern Tenant By Chaim Rivlin

DEPARTMENTS 4

Editor’s Note

Ask the Expert

Smart Ideas

COLUMNISTS Paula Gasparro, Jessica Green, Derek Lobo, Andy Schwartze, Richard Vilner

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Transactions

GTA Multi-Residential Market Summary

By Richard Vilner

RealNet Canada Inc. announced 2015 third quarter results for the Greater Toronto Area commercial real estate and land investment markets. A total of 535 transactions were recorded over $1 million, totaling $3.6 billion across the GTA. In terms of dollar volume, the third quarter finished level with Q2-2015, but registered gains of 15 percent over the same period a year ago, and 27 percent versus the ten-year quarterly average ($2.8 billion). The third quarter was driven mainly by a record performance in the residential land sector, which contributed 34 percent to the overall quarterly dollar volume, in addition to a noticeable influx of foreign capital into the improved property classes. The apartment sector contributed $400 million, or 11 percent to the overall quarterly total, with a total of 43 multi-residential properties trading in excess of $1 million during the July to September period. On a dollar volume basis, this represents a decrease of 15 percent compared to the second quarter, and an increase of 78 percent compared to the same period a year ago. On a year-to-date basis, the apartment sector has totaled

$1.2 billion, representing a 62 percent surge versus the first 9-month period in 2014, and now exceeding $1 billion for the third time in the past decade. During the third quarter, foreign investors influenced GTA property markets with large-sized acquisitions and this held true for multi-residential investments as well. A total of $82.2 million in foreign capital was invested in apartment properties throughout the GTA, representing 21 percent of the sector’s overall quarterly dollar volume, with the third largest transaction of the quarter (see chart) having been completed by a large European-based private investment firm.

Top Apartment Transactions Q3 2015 Municipality

Number of Units

Total Price

Price/Unit

% Transferred

Sales Type

2100 Bloor St. West, Toronto

257

$85,000,000

$330,739

100%

Market

240 Old Harwood Ave. Ajax

126

$55,714,400

$442,178

100%

Market

111 Lawton Boulevard, Toronto

152

$46,000,000

$302,632

100%

Market

1665 The Collegeway, Mississauga

Null

$39,896,794

Null

100%

Market

67 Parkwoods Village Dr., North York

144

$24,430,000

$169, 653

100%

Distree

Foreign investors in the sector also impacted property yields further to the downside, averaging fifty basis points lower than the sector’s overall average yield for the quarter. On average, foreign investments produced a yield of 3.9 percent, while

the overall sector averaged 4.4 percent, leading apartment investments to its lowest average capitalization rate on record according to the RealNet Yield Index.

New & Notable Transaction

Q3-2015 Quarterly Breakdown

172 Sherwood Avenue, Toronto Located north of Eglinton Avenue East and east of Mount Pleasant Road, this property is improved with a three-storey apartment building containing a total of eighteen units (9 x one-bedroom, 6 x two-bedroom, 3 x three-bedroom). The property was constructed in 1961 and contains 24 underground parking spaces. Date of Sale: September 29, 2015 Sale Price: $5,427,500 Capitalization Rate: 4.4% Total # of Units: 18 Price per Unit: $301,528 Brokers: B. Bardos, CBRE Limited At the time of sale, the building had no vacancy and rental rates were generally at market levels. The vendor had acquired the property in December, 2013 for a total consideration of $4,850,000, representing a price per unit of $269,444.

This chart summarizes, on a quarterly basis, the total dollar volume and the total number of apartment transactions greater than one million in the GTA region. Q3-2015 reached $400 million, with a total of 43 assets trading above $1 million.

Q3-2015 Transactions Bubble Chart

This chart summarizes second quarter apartment transactions greater than $1 million in the GTA Region geographically and by dollar volume (the larger the transaction in dollar volume, the larger the size of the circumference).

The third quarter average price per unit valuation has reached $243,131 per unit, a new record high for any third quarter, which also represents increases of eight percent compared to Q2-2015, and 25 percent from Q3-2014 ($194,986). On a year-to-date basis, the average price per unit also reached a new record high valuation that now averages $219,631 per unit, or 10 percent above the average price per unit of $199,110 over the same period a year ago. On a forward-looking basis, as we look at the fourth quarter, the apartment sector in the Greater Toronto Area so far totaled $165 million in transactions halfway through, averaging $207,261 per unit and having an average yield of 4.96 percent.

RealNet Canada Inc. (www.realnet.ca) is the leading real-estate information services company in Canada. Founded in 1995, The Company’s core information product provides coverage in both the commercial real estate investment and residential development markets, powering the decisions of firms involved in approximately 75% of the market activity. RealNet Canada Inc. is an Altus Group company (www.altusgroup.com) November 2015 11

CMHC

Doing it Right with Data Housing Market Information, Up-to-Date and At Your Finger Tips

CMHC unveiled its Housing Market Information Portal in 2014, a dynamic web-based tool that lets users meet their information needs by accessing CMHC’s wealth of housing market data in one, easy location. “As Canada’s housing authority, CMHC continues to be the most comprehensive and reliable source of information on housing in Canada. The Portal is another example of how CMHC makes accurate and up-to-date information available to Canadian governments, consumers and the housing industry,” said Michel Laurence, CMHC’s Vice President, Policy and Research. “Whether users are looking for high-level national and provincial housing statistics, or local data for specific cities or neighbourhoods, the Portal can readily provide the objective and impartial information Canadians have come to rely on from CMHC.” The Portal has four different views— At-a-Glance, Compare, Tables and Publications — for users to access information. Each 12 www.canadianapartmentmagazine.ca

view is supported by a map-based interface, making access to geography-specific information quick and easy. A state-of-the-art search function and a geography-related drop-down menu gives users the flexibility to refine their data search from the national to the neighbourhood level without using the map, if desired. Users can access historical, current and comparative reports in a range of outputs, including tables, charts, and maps available in PDF and spreadsheet formats, suitable for sharing with clients, colleagues and stakeholders. The Portal also enables users to search CMHC’s most recent and historical Housing Market Information publications. Visit the Portal at: www.cmhc.ca/hmiportal

CMHC HIGHLIGHTS FROM FALL’S RENTAL MARKET SURVEY Preliminary data from CMHC’s Fall Rental Market Survey shows that average monthly rents are still rising in Calgary and Edmonton despite fewer Canadians moving there. In October, the vacancy rate for Calgary’s condo rental market was 4.9 per cent while the apartment building market saw a vacancy rate of 5.3 per cent. But, as energy companies cut back on capital spending and eliminate jobs in the face of the oil slump, both cities continue to rank among the Top 5 most expensive rental markets in Canada. According to the report, here are the most expensive condo rental markets in Canada (based on an average 2-bedroom condo): 1. Toronto at $1,754 per month 2. Vancouver at $1,543 per month 3. Calgary at $1,522 per month (from $1,511 in October 2014) 4. Edmonton at $1,461 per month (from $1,179 in October 2014) 5. Ottawa at $1,330 per month At $1,065/month, Quebec City was the least expensive of the 16 condo markets surveyed. Meanwhile, the Top 5 most expensive apartment rental markets in Canada (based on an average 2-bedroom apartment) are as follows: 1. Vancouver at $1,360 per month 2. Calgary at $1,332 per month 3. Toronto at $1,274 per month 4. Edmonton at $1,259 per month 5. Ottawa at $1,172 per month

Overall, the average rent for twobedroom apartments in existing structures increased 2.4 per cent between October 2014 and October 2015. In October 2015, the average rent for a two bedroom apartment in new and existing structures was $960. The final 2015 Rental Market Survey report and data will be released on December 16, 2015.

Are you contemplating the sale of your apartment property? Consider the following: • Who will represent your best interests? • Who will give your property maximum exposure? • Who will deliver the highest value for your property? With over 20 years experience, tens of thousands of units sold, and hundreds of clients represented, we have consistently delivered superior results. Through our local and national coverage, we create maximum exposure, ensuring maximum value for your property. Please visit our website at www.cbre.ca/nag-toronto or contact us at 416.815.2332 to learn more about how we can help you.

Trois-Rivieres, Quebec, currently has the least expensive apartment rents in the country at $581. Canada’s purpose-built vacancy rate rises According to the survey, Canada’s 35 larger centres saw the average vacancy rate in privately initiated purpose-built rental apartments increase to 3.3 per cent in October 2015, from 2.8 per cent in October 2014. “The rise in the national vacancy rate was due to lower net migration in regions most affected by low oil prices as well as an increase in the supply of purpose-built rental apartment units,” said Bob Dugan, Chief Economist at CMHC.

To take advantage of CMHC’s Mortgage Loan Insurance or to learn more about CMHC resources, contact Paula Gasparro, Manager, Business Development, MultiUnit Mortgage Insurance at 416-250-2731, via e-mail at pgasparr@cmhc.ca or log on to www. cmhc.ca/mult-unit.

SOLD 784 Suites Toronto $192,602 Per Suite

SOLD 502 Suites - Toronto $286,864 Per Suite

SOLD 242 Suites - London $177,686 Per Suite

(*portfolio average)

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: : David Montressor*, Executive Vice President 416.815.2332 david.montressor@cbre.com * Sales Representative CBRE Limited Brokerage

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Calgary

Edmonton

Winnipeg

London

Kitchener

Toronto

Ottawa

Montreal

Saint John

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November 2015 13 CAM AD - Half Page Island June 2015.indd 1

6/8/2015 4:32:28 PM

Legislation

BOMA calls for Fairness in Energy Reporting New Legislation Targets the Multi-Residential Sector Real estate industry advocates warn that rental housing landlords could find themselves unduly embarrassed if energy and water consumption data is disclosed to the general public. This caution from the Building Owners and Managers Association (BOMA) of Greater Toronto comes in sync with proposed legislation to mandate reporting of energy and water consumption in privately owned buildings in Ontario.

BOMA Toronto stresses that gross consumption data must be assessed in the context of building uses, occupancy densities and differing climatic conditions across Ontario’s vast breadth. “Without an industry accepted method to normalize energy use for multi-unit residential buildings, it will be very disruptive to publicly disclose performance that creates apples-to-pears-to-oranges comparisons,” it submits. Bill 135, the Energy Statute Law Amendment Act, which was introduced in late October, sets out the Ontario government’s broad authority to ask for the information, ensure its veracity and make it publicly available. The actual details of the new requirements will be left for a regulation, which will first be posted on the provincial Environmental Registry for public review. BOMA Toronto’s recently released policy document makes recommendations in advance of the draft regulation, based on consultations with the provincial government, the City of Toronto and its own membership. As an early and active proponent of conservation and demand management, BOMA Toronto strongly supports the philosophy of energy reporting and benchmarking, but stresses that it must be premised on a fair comparison of properties that encourages continuous improvement rather than shaming weaker performers. Its policy document outlines several points of required clarification related to the rental housing sector. Notably, tenants’ role in subverting efforts to conserve is not something that landlords can easily control. Some buildings have 14 www.canadianapartmentmagazine.ca

recorded as much as 30 per cent reductions in energy consumption when units are sub-metered for electricity, but Ontario’s residential tenancy law requires that landlords obtain sitting tenants’ consent before sub-meters can be installed. Landlords must also seek approval from the provincial Landlord and Tenant Board to pass the capital costs of energy efficiency improvements through to tenants’ rents. “The Ontario Residential Tenancies Act makes implementing energy retrofits more challenging than in other asset classes,” the policy document states. “It is concerning to have mandatory provincial public energy performance disclosure when there is a provincial Act that makes implementing energy efficiency measures in this building type more challenging.” BOMA Toronto recommends that disclosure of energy and water consumption in the multi-residential sector be restricted to the parties of sales transactions. “While monitoring and tracking of energy use and benchmarking buildings are low-cost ways to identify buildings that are good candidates for energy audits and retrofits, and are shown to improve building performance over time, there has been no empirical evidence to suggest that publicly disclosing energy performance leads to the same outcome,” the policy document reasons.

Reprinted from www.REMInetwork.com

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Newsworthy

Down with the Old, Up with the New Proposed B.C. Bill will Make Dissolving Condo Corporations and Selling Buildings Easier

By Erin Ruddy

A proposed amendment to British Columbia’s Strata Property Act could make it easier for apartment developers to scoop up prime real estate in B.C.’s hottest neighbourhoods. While current legislation calls for condominium owners’ unanimous consent to dissolve a corporation, the new bill would lower that threshold to 80 per cent in a change that could take effect as early as the end of 2015. “This change to the Strata Property Act would make it easier for strata owners to sell off the entire building,” says Casey Weeks, Vice President, Investment, at Colliers in Vancouver. “We believe this will free up some prime redevelopment opportunities and allow for newer, better building construction.” 16 www.canadianapartmentmagazine.ca

Given that Vancouver’s first condominiums were constructed in the 1960s, unit owners are now facing tough decisions as their buildings age and depreciate. From the expense of unit repairs to the cost of upgrading common areas and amenities, often the financial investment isn’t worth the payoff as

owners likely won’t recover those costs from the expected increase in value. “Many of the existing developments are three- and four-storey wood frame walkups located in prime traffic areas and near light rapid transit stations,” says Pat Williams, Partner, Clark Wilson LLP. “These developments are strata corporations that can only be replaced if they are cancelled, or effectively destroyed. The change in legislation would allow developers to canvass existing complexes and enter into negotiations.” Williams says having the option to cancel the strata corporation by selling the building may be the best course of action for those facing costly repairs. “The option will likely result in a higher price being paid because the value is in the footprint that can accommodate a 20-storey building, rather than the existing three-storey building,” he says. Condo vs. purpose-built rental Even if changes to the Strata Property Act do result in more opportunities for redevelopment, history indicates that the competition may favour condominiums over apartments. “In the City of Vancouver, all things being equal, condos will generally outperform purpose-built rental,” says Weeks. “That said, given the success of their purpose-built rental incentives, we believe the City of Vancouver will continue to encourage the development of purpose-built rental through their rezoning policies.” Weeks notes that, historically, the profit margin for condominium development has typically superseded the capitalized value of income created by purpose-built rental properties. “This has changed in recent years as the City has created incentives for purposebuilt rental buildings through their rezoning policies,” he says. “For instance, in the west end and in East Vancouver, the City will relax its parking stall ratios and provide additional density, to encourage development of purpose-built rental. These incentives combined with rising rents, a low interest rate environment, and

an aging building stock are stimulating a boom in purpose-built rental properties in Vancouver.” Opposing the move Noting two recent high profile cases in North Vancouver in which buildings were developed before the current strata legislation (1966), Williams anticipates some opposition to the 80 per cent threshold. “Even if a unit-holder is getting a substantial increase due to the value being in the footprint,” he says, “once the complex is sold the unit-holder must move out.” In both cases cited, Williams says a percentage of unit-holders did not want to move from their existing buildings due to ties to friends, family and children attending district schools. Many believed that if their corporations were dissolved and sold, they would no longer be able to afford to live in North Vancouver despite a substantial return on existing value.

“Although the vote threshold will be reduced from 100 per cent to 80 per cent with the new legislation, the cancellation must be approved by the court,” he says. “Though a potential developer/buyer must persuade a court that their offer is the best one the owners will receive, we know that there will be individuals who will attempt to persuade the court that they are being unfairly prejudiced by having to move. Each situation will be decided based upon its own particular circumstances.” As per Williams comment, the proposed amendments will require the strata to obtain an order from the Supreme Court of British Columbia confirming the owners’ resolution. In deciding whether to make such an order, the court will be required to consider, among other things, the best interests of the owners and the probability and extent of significant unfairness to one or more owners or holders of registered charges.

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Feature

Overcoming the Language Barrier

Key Considerations for Successfully Entering into the Quebec Real Estate Market By Huiping Iler

For many English Canadian real estate firms, penetrating the Quebec market can be a daunting, if not problematic task given the obvious language and cultural barriers. As Canada’s second largest provincial economy, approximately 80 percent of the population of Quebec speaks French as a first language—and while it’s no secret that the ability to do business in French is a prerequisite for success, it’s also a requirement of the law. Quebec’s Charter of the French language The Quebec Charter of the French Language—also known as Bill 101—is designed to make French the everyday language of work, instruction, communication, commerce and all business conducted in Quebec. Any company operating in the province is required to have a French-language name and signage. In the real estate context, the use of French is legislated for contracts, property signs and advertising among other things. 18 www.canadianapartmentmagazine.ca

Deal Profile:

security-based facility for condo development Deal snapshot:

First National delivers security-based facility, enabling a longstanding client to build two condo towers simultaneously, despite only 40 per cent advance sales in phase two.

Client objective:

Looking to tackle his first condo development after a successful 50-year career in industrial real estate, the client knew that it would be more efficient for future tenants moving in if both towers were built simultaneously (the two sites shared a parking facility on a structural podium).

The solution approach:

The First National team saw an opportunity to both support a long-standing client’s evolution and to set a precedent in the industry. It was a matter of evaluating the client request properly and figuring out how to use First National’s strengths – service, expertise and speed – to deliver.

Structuring the solution:

The client wanted to secure up to $18 million in financing to build phase two. The First National team tapped its network of investors, ultimately proposing a facility that took security over six industrial buildings and five condo units within the client’s portfolio. In the end, the client received the requested financing amount and avoided the consultant fees ($40 - $60,000) typically associated with construction loans. The deal closed in two months, despite its technical complexity.

Formula for success:

The trust and honesty that have characterized this client relationship for more than 50 years gave the client faith in First National’s approach to this deal. It took ingenuity to create a facility that provided ample funds, and First National was also able to execute quickly and make it convenient and easy for the client.

The key idea:

With the stakes very high – the profitability of the entire project rested in being able to build both towers simultaneously – First National created a deal that worked for the client and the investor. The client got the financing that he needed to fulfill his vision in a way that positioned both him and First National as trailblazers. To get more profiles of successful deals and other financing insights right in your inbox register for First National’s Commercial Market Update. Type the following into your browser: www.firstnational. ca/Market-Update/

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Feature Azaëlle Elliott-Bouchard is a project manager for wintranslation, a Canadian translation company serving the real estate sector. With clients, including Skyline Group of Companies, Bridgeport Realty, Keller Williams Realty, and CREIT Management LP to name a few, she knows the importance of good and meaningful translation. “When our clients expand into Quebec, they usually translate employee manuals, leases, fire and safety documents from English into French,” she says. “While these need to be accurate and true to the content, they also need to reflect the new market in which they will be used. They shouldn’t come off sounding like direct translations.”

Speaking the real, local language The quality of all corporate communications— whether it is website content or a recruitment ad—reflects a company’s commitment to the market in which it is immersed. After all, customers are known to make emotional choices rather than purely logical ones. “Nothing ruins an emotional connection with your clients more than awkward, subpar translations,” notes Elliott-Bouchard. Martin Messier, president of the Quebec Landlords Association—and a Quebec resident himself— agrees. “Many companies do a good job being compliant with the French language requirements, but often they don’t do it very well,” he says. “For example, sometimes the translation is in French but not Québécois French. Quebecers pick up on the failure to recognize local nuances. Working with a qualified translator, and communicating using beautifully written French content on websites and collaterals will go a long way in creating stronger bonds with customers in our market.” What makes a good translator? According to Elliott-Bouchard, good translators are writers who produce texts that read well in French. “Their most important skill set is building effective bridges between languages,” she notes. “They render the message of the original English text, with appropriate style and terminology in French.” One tip Elliott-Bouchard suggests to ensure relevant language usage is to create terminology databases specific to a client’s industry and services, then have a second translator review the translation quality. Include translation in content planning One of the problems that Elliot-Bouchard often sees is that translation is an afterthought. Communication professionals with very little experience dealing with translations often forget to build in the time needed for translation into their planning process. Sometimes she gets calls to “convert” 10,000 English words into French, literally overnight. Last minute translation requests almost always increase costs and impair quality. Translators need time to research proper terminology and compose the French text. Translations intended for publications should also be proofread and revised by a second translator, which requires additional time. The industry rule of thumb is a translator can translate about 2,000 words per day and a reviser can revise between 800 and 1,000 words per hour. This article was written by Huiping Iler, President, wintranslation

20 www.canadianapartmentmagazine.ca

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Industry Influencer

MULTI-FAMILY FORTITUDE GWL Realty Advisors’ Anne Morash reflects on thirty years of growth, success, and adapting in an ever-changing industry fuelled by fast communication and high expectations By Erin Ruddy

Goodbye fax machines and rolodexes. Hello mobile communications and renters who want it all. Times have changed for real estate management professionals and no one knows this better Anne Morash, GWL Realty Advisors’ Senior Vice President, Multi-Residential. “30 years ago things were a lot different,” Morash says, recalling her foray into the retail development sector. “You’d come back from lunch and your secretary would hand you this stack of pink ‘While You Were Out’ messages. People used pagers and intercoms. Then along came the fax machine—I mean, who even uses fax machines anymore?”

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Industry Influencer

November 2015 23

Industry Influencer Bay and Gerrard Apartments, currently in development in downtown Toronto

24 www.canadianapartmentmagazine.ca

Certainly attitudes and orthodoxy have changed, but the real driver behind workplace reform has been the sweeping influx of new technology. Today’s professionals are always accessible thanks to mobile devices and laptops. Whether at work, at home, or in transit, information is only a click of a mouse or a swipe of a thumb away. The ease with which people are able to communicate and express their wants and desires, to post complaints and share slanderous stories, is both a curse and a blessing. “For me, the biggest change that technology has brought to the industry is the power shift from the deliverer to the consumer,” asserts Morash. “In the multifamily world, the renter holds the cards. They have access to so much information, whether they’re at home, at work, or on the go. Review sites are immensely powerful and it’s very difficult for managers of real estate and owners to oversee all that. You need a team of people just to refute incorrect information.”

Industry Influencer

With the digital space taking up more resources than ever before, Morash underscores the importance of having a fast, effective and engaging online presence accessible across a multitude of platforms. “There is nothing more frustrating than a slow-loading website or a drop-down bar that freezes, or a poorly laid-out website,” she says. “Now, we all expect an online experience that is free of those kinds of annoyances.” To ensure just such a nuisance-free experience, GWL Realty Advisors’ invested a great deal of time and attention to its Vertica Resident Services’ website, piloting and testing the various features with a wide variety of users before its big launch two years ago. And, it seems all that effort paid off. In 2014 the team was honoured at WEBCON’s Rental Marketing Awards for Best Corporate Website (owning over 2,500 units) and now enjoys better traffic and visibility in the marketplace as a result. Morash says it’s precisely these types of tech-oriented, industry-leading initiatives that have really impressed her since she joined the company in 2013. “Whether it’s our energy-benchmarking through use of big data, or our waste reduction and diversion program, GWL Realty Advisors is a forward-looking entity, always anticipating what’s next and what the future will hold,” she says.

After that, Morash went on to spend 27 years in retail development, working for companies like Cadillac Fairview and Ivanhoe Cambridge. She was instrumental in developing large scale retail projects like the Shops at Don Mills. When she eventually found her way back into the multi-residential world, it was a purposeful shift into a company she respected greatly. “GWL Realty Advisors is a place I always identified as somewhere I’d like to work,” she says. “I have a high regard for the senior management here, many of whom I’ve known since school, or known personally and through the industry.” Though the two sectors may seem miles apart in what they offer, Morash says her background in retail actually gave her terrific inset into the minds of residential tenants. “People like to shop in nice places and be treated with a high level of customer service, and people expect the same with where they live,” she says. “So beyond the basics of real estate—a good location, being accessible, well serviced, well built, and all those tangible things the asset classes share, I think there is a very strong synergy between retail and residential.”

Challenges and opportunities It’s both an exciting and a challenging time to be in the apartment sector, but Morash sees it all with a glass half full. “This asset class is continually challenged to find opportunities for growth,” she says, adding that, “it’s very competitive to buy existing Grade A apartment buildings while financially it’s challenging to find development sites to build from the ground up. But multi-family, as an asset class, delivers very stable results. In any economic cycle people need to live somewhere. People love investing in it because even though the returns might not be off the charts, it’s bond-like and they can always rely on it.” Aside from the competition for sites and acquisitions, another challenge for GWL Realty Advisors lies within the very nature of the tenant it seeks to attract. “With A-plus assets, you get a more discerning costumer. That costumer is generally better educated and better travelled,” Morash explains, “so, their expectations are higher. It can be a challenge to address their desires and requirements for hotel-like quality service levels. But that’s also an opportunity for us because it makes us be better at what we do.”

Retail roots Morash began her career in real estate about thirty years ago after getting her undergraduate degree from Queen’s University in geography, followed by a Master’s degree at York in urban planning and land development. “My very first job was with a planning and consulting firm that focused on municipal housing statements,” she reflects. “So, you see, I actually began my career on the housing side.” November 2015 25

Industry Influencer

As for those opportunities, Morash feels the list is endless. “For us, the opportunities include buying B-level assets and turning them into A-levels—or turning an A-level into an A-plus. Currently our strategy is to focus on mid- to high-rise buildings in the seven major markets across Canada. But one of the biggest opportunities we see right now is building mixed-use sites, rather than single use. In all our new builds, we are putting a mix of retail at grade reflecting the needs of the composition of the residents.” From pharmacies and financial services to coffee shops and grocery stores, Morash says residents are choosy about the kinds of retail they want to see nestled in the footholds of their buildings. To ensure the right mix of goods and services, GWL Realty Advisors conducts focus groups with residents and doesn’t just lease the space to any retailer that comes along. “When you look at some of the earlier condominiums, you can see that retail was really just an afterthought,” she says. “Now 26 www.canadianapartmentmagazine.ca

there is a lot of thought given to this area. For instance, we had the opportunity to do research on a large development in Halifax where we’ve got about 25,000 square feet of space on two sides of the street. We held out doing easy deals to make sure we get the retailers in that best fit the complexion of the building.” Purpose-built endeavours Developing new properties is an important and growing part of GWL Realty Advisors’ mandate and Morash says they’ve got several exciting projects on the go. “Since 1998, we’ve completed 70 development projects, seven of which have been purpose-built rental projects,” she says. “We have a large project currently under

“

construction in Toronto at Bay and Gerrard, which will be a 43-storey, 600-unit building. Relatively speaking, it is one of the largest single buildings of multi-family units in Canada.” In December, the company will be opening a new 80-unit rental building in North Vancouver as part of the Northwoods Village mixed-used project, a village-style neighbourhood comprised of a variety of shops and commercial offerings. In 2014, it completed the 17-storey Elata at Glenmore Gardens in Calgary, while in Halifax, 19Twenty—a 146-unit, 17-storey, multi-family apartment building—proudly opened its doors. “Residents today are very savvy,” Morash notes. “They know what they want, and they

Residents today are very savvy. They know what they want, and they will articulate and pay for what they value.”

Industry Influencer

New to Halifax is 19twenty, a spacious condo-inspired apartment building featuring an outdoor terrace overlooking the city; a 560 square-foot party room; a 1,442 square-foot gym and other modern amenities. Calgary’s Elata at Glenmore Gardens is a new rental residence located in one of the most picturesque areas of the city, overlooking the Glenmore Reservoir. Both are examples of the high quality new purpose-built rental properties GWL Realty Advisors have been developing recently.

GWL Realty Advisors Managed Multi-Family Portfolio Statistics • $2.7 billion in assets under management • 100 buildings • 11,400 units • 7 major markets: Halifax, Ottawa, Montreal, Toronto, Edmonton, Calgary, Vancouver

will articulate and pay for what they value. For instance, they know that they want Wifi or somebody at the front desk 24 hours a day. They know they want a dog-run or a gym that has equipment that works. They know they want to be renting in a building that’s part of a micro-community. Purposebuilt rental can deliver all that and more.” But, as hard and as fast as amenities can be—and as shiny and attractive as new buildings are—all those bells and whistles mean nothing without good old fashioned customer service. “They still want to know that when something breaks, someone will be there promptly to fix it. They want to know they can communicate, send an email, or better yet, talk to a live person.” Future-proofing Of course, building and designing any new tower means envisioning the future, and GWL Realty Advisors takes its ‘futureproofing’ duties seriously. “Apartment buildings are a long-term build and hold, and how we future-proof is both an art

and a science,” says Morash. “So, we always design our spaces to be flexible.” Take the once all-popular squash court, for example. With all-due respect to squash players, Morash points out that today’s tenants might prefer to see a yoga studio or a mini-spin studio as an amenity in its place. “The smart developer will develop with flex-space in mind,” she says. Another building amenity once coveted by all, but much less soughtafter in today’s urban environment, is parking. “The parking ratio has gone down significantly, however we now have to have a bike room that holds 600 bikes—one bike per unit,” she says. “Public transit, densification, walkability score—these are very important to our residents today and a good indication of where we’re heading.” And for Morash, the direction they’re heading in feels good, particularly if her last two years with GWL Realty Advisors are at all telling of the future. “We’ve grown tremendously since I’ve been

here, so it’s been a ride,” she says. “We have a lot of good things happening. Our senior management team within the multi-family group has been working on a strategy called, “Change the Way You See Things.” It looks at how we can be more efficient, more effective, more leadingedge in the delivery of the multifamily business to our clients. We have started to execute our strategies. I think what I love most about this role is watching people throughout the organization taking a new strategy and running with it, and seeing the fruits of our labour.” As far as fruits go, there are many of those—some still seeds, others ripe for the picking. But with 2016 around the corner, Morash is primed and ready to sink her teeth into whatever juicy opportunities the New Year brings. “Multi-family as an asset class is only going to get better,” she says. “You only have to look south of the border at cities like New York and Chicago to see where we’re going. And the truth is, we’re not far behind.” November 2015 27

Portfolio

The iPhone Landlord With Technology Comes Greater Mobility— and the Need to be Accessible By Derek Lobo

For more tips and insights, visit

28 www.canadianapartmentmagazine.ca

No one can deny that technology has changed the face of the purpose-built rental apartment industry. It has swept away the old ways of managing buildings. Building owners have to embrace the internet or miss out on much of the marketplace. New technologies have helped increase efficiencies in utilities, operating costs, and even how you manage maintenance issues, or accept rent from tenants.

Portfolio

with any new technology, the new can be intimidating, and the options can seem overwhelming. I know this from experience. However, if you dive into new technology, you will be impressed at what you can achieve. In this column, I hope to list a number of the tools our staff at SVN Rock Advisors have used on smartphones that can help make managing your building easier.

However, technology does not stand still. Where ten years ago, you needed a desktop computer in your office, and where five years ago you could work with a laptop, today we have become far more mobile. Our smartphones easily access the Internet, and numerous cloud services allow us to do our work from anywhere. We don’t even need a keyboard to be productive. All of this new technology offers a lot of freedom. You can manage your properties from literally anywhere, without any downtime, as long as you have your iPhone in your pocket. However, as

Constant contact The drive for a paperless office means sending out more e-mails. You need e-mail to stay in contact with your tenants, and e-mail marketing can help you reach out to potential tenants who no longer look at paper advertisements. E-mail marketing can be a complicated process, however, with a number of e-mails never making it to their intended recipients due to spam filters. Constant Contact (constantcontact.com) takes all of the complexity and the worries about e-mail marketing out of your hands. They offer an easy-to-use interface with a number of ready-made e-mail templates built in. You can adapt these templates or make your own. You can upload your contact database and organize it into relevant groups like your tenants, marketing contacts, suppliers and more – perfect for organizing a monthly newsletter, or a mailout of newly available units. Constant Contact is a respected e-mail marketing management company that respects spam filters, and has clear optout guidelines, and can help you with your marketing campaigns so that your e-mails are seen as useful messages and not spam. You can try it free for sixty days, and plans start from $20 per month.

Evernote Evernote (evernote.com) is one of those computer tools you don’t know you need until you have it. We all have that corkboard or refrigerator at home or at work where important notes are stashed, from recipes to receipts, messages to yourself in the future, and other items that are vitally important, no matter how small. Unfortunately, you can’t haul that corkboard or refrigerator around with you wherever you go. So, Evernote acts as an online corkboard that allows you to write notes to yourself, copy and paste photos of buildings as potential investments, or pictures of maintenance issues, files, web pages or other items that you intend to use at a later date. It even captures handwritten notes. The information is stored on the cloud and synchronizes between your computers and your smartphone, so you always have access to it wherever you’re on the go. And like the office corkboard or staffroom refrigerator, you can give others access to your Evernote account, so that your colleagues can share their important notes, or react to your own. It’s a great way to take the collaboration of the office onto the road. The basic features of Evernote are free. If you want more space or more access, plans start for as little as $29 per year. Office 365 Microsoft’s Office Suite has become a ubiquitous and essential program for office documents, whether you operate a PC or a Mac. Many of you are probably already familiar with Microsoft Word for writing letters or documents, or Excel for crafting spreadsheets and doing November 2015 29

Portfolio

financial calculations. What you might not know is that Microsoft now gives you the ability to compose these documents from your phone. Even documents you’ve created on your laptop back in the office can be edited on your smartphone a hundred miles away. This is done through Microsoft’s Office 365 service (microsoft.office. com). This is a subscription service that allows you to download and install Microsoft’s Office products like Word, Excel and Outlook on a number of your computers, and keep them updated as time goes on. You also get file storage and sharing on the Internet with up to a terabyte of storage per user. Files are synced across computers, so you can access them on laptops or desktops, even when you’re not connected to the Internet. If you sign in with your secure login and password, you can access those files from any computer anywhere.

And this includes your phone. Microsoft has already created smartphone versions of its popular Word, Excel and Powerpoint programs as iPhone and Android apps, so even if you don’t have your computer and you want to check your budget, or make a correction, you can do so on the road, as long as you have your smartphone with you. Plans start for as little as $6 per month. Always accessible These programs allow landlords and building managers to stay connected to the office without taking the office with them. Your time is important, and having that connection will ensure that you are never caught short, or unaware. Best of all, these investments are cheap, and can be covered for less than $100 per year. It’s even cheaper if you already have a smartphone.

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30 www.canadianapartmentmagazine.ca

Derek Lobo is the CEO of SVN Canada Inc., a commercial real estate brokerage founded on the goal of creating a more efficient commercial and multi-family real estate market through compensated cooperation. Derek has over twenty-five years of experience brokering and consulting for the purpose-built rental apartment sector. Jim Dimanis, President of SVN Canada Inc. is heading the SVN Canada Inc., team. For more information about SVN Canada, including franchising options, call 289-795-9744 or email jim.dimanis@svn.com.

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Management

Apartments and the Internet of Things How IoT is Shaping the Future of the Rental Industry By Jessica Green

It’s not news that the technology industry is a behemoth that continues to evolve and expand as new innovations hit the scene by the second. Although we often think of Canada’s apartment industry as somewhat “lagging” in the way of tech, more and more landlords and property managers will incorporate, particularly when it comes to apartment rentals. Apartments of the future will offer– perhaps without even knowing – “The Internet of Things”, or, IoT. When we talk about IoT, we’re referring to machineto-machine communication, cloud computing and everything “smart”. Although tempting, it’s certainly not prudent to adopt every new IoT invention, but rather, the ones your renters really want. Here, we examine some of the more adoptable IoT innovations that will help take your apartments to the next, more futuristic-friendly level.

32 www.canadianapartmentmagazine.ca

What is IoT? No doubt you’ve probably heard the term “Internet of Things”. So what is it? Simply put, IoT is the ability to connect “things”, such as coffee makers, lamps, washing machines and more, to the Internet. This means they can be controlled wirelessly, either from within a home or outside of it. A recent study by technology research firm Gartner suggests that by 2020 there will be over 26 billion devices connected to the Internet of Things. In Canada alone, eMarketer forecasts that there will be more than six million new smartphone users in Canada between 2014 and 2018. At that point, this group will represent nearly 65% of the country’s overall population.

Management

This is all just a few years away, confirming that embracing the IoT revolution is an important component of our industry’s amenities matrix. Apartments get smart It’s been suggested that the ability to advertise your apartment as “smart” in an online listing will soon be just as important as saying that you offer an in-suite washer and dryer. In fact, companies like Samsung, offer washing machines that run with just the click of a button on your phone. “Samsung’s strategy is to enable consumers to be more connected and organized through their household devices and appliances, and we’re now extending that connectivity right into the laundry room,” says Kevin Dexter, Senior Vice President of Home Appliance Sales and Marketing, Samsung Electronics America. The Jetsonianstyle Smart Control kicks IoT to a new level, allowing you to

remotely control and monitor your washing from anywhere using a smartphone App. You can instantly start or pause it and monitor cycle selections, remaining time and finishing alerts. Our favourite feature: Samsung’s Smart Control eliminates the need for user manuals as it diagnoses washer problems and sends alerts to the owner’s smartphone. Wireless charging stations Earlier this year, IKEA unveiled their first wireless charging stations to much fanfare. These stations come in the form of lamps, bedside tables, desks and even standalone charging pads (that look much like drink coasters). With prices starting as low as $9.99, offering a wireless charging station to your renters is a great way to start embracing IoT in your buildings. Jeanette Skjelmose, manager of the lighting and wireless charging sector, said IKEA aims to make life at home simpler

November 2015 33

Management

because “we know that people hate cable mess.” What better way to keep a modest space looking tidy than cleverly tuckedaway cords? Smart locks Getting locked out of an apartment happens—it’s just life. Before IoT, the only way for a renter to get back into their apartment would be to scramble to find the manager on duty or call a locksmith. Now that smart locks have hit the market, renters can unlock (or lock) their doors with the traditional key or a phone. This past August, Colorado-based LockState announced the pre-sale for the RemoteLock 6i—a new commercial WiFi electronic lock that’s perfect for office buildings, rental properties, residential, warehouses, retail, and any location that needs remote monitoring and management of locks. Coming in at a whopping $500+ per lock, this product will likely become more affordable as competition heats up and more options hit the market. Perhaps a line item for your 2016 budget. Keeping cool Long, hot summers mean air conditioning is a must for almost every apartment. But, as many property managers know,

running an air conditioner can be a very expensive proposition. Now, thanks to IoT, tenants can control their usage by setting their budget into an app that controls the air conditioner wirelessly. One example is Aros, the smart lovechild of Quirky and GE, which can be set to turn on and off depending on the time of day or where a tenant is in their apartment at a specific moment. According to a recent write-up in Fast Company, “Aros is a self-contained, turn-key “Internet of Things” device… In less than a minute, you can pair your iPhone to your air conditioner to calculate your monthly spending, throttle your energy usage, or just cool the room off before you get home.” The Internet of Things is constantly evolving and making our lives more technologically-inclined. While some IoT inventions are not yet practical for property managers, there are some affordable, smaller items that can be incorporated into your suites now to help you stay on the forefront of this inevitable shift in how apartment rentals work.

Jessica Green is the founder of Cursive, a Toronto-based communications consulting firm that specializes in brand messaging with an emphasis on digital media strategy.

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Insurance

Lender Insurance Requirements Understanding the A.M. Best Rating System By Andy Schwartze

Mortgage lenders have a nasty habit of imposing insurance requirements on their borrowers once the commitment letter has been issued and accepted. In most cases, the Borrower understands that insurance will be mandatory, and, as the building will be insured in any event, the terms and conditions are not part of the negotiations. After all, it’s “insurance” and it’s not a big item. The Lender’s insertion of the requirement to insure will generally reference the fact that the insurance must be “satisfactory” and that’s about all the attention that this topic receives. At some point, prior to closing of the financing, the insurance broker will typically receive a written request from one of a small number of “insurance consultants.” These are hired, on a fee basis, by the Lender, and are tasked with reviewing the insurance documentation and approving it before the money changes hands. It is only then that the Borrower finds out what the Lender’s insurance real requirements are. In some cases, the existing insurance will be satisfactory and requires nothing more than the adding of the Lender as a mortgagee. There is, however, one requirement that is a “Canadianization” of what is required in the U.S. lending environment. In the U.S., there are some 2,000+ insurance companies operating under state issued licences, and an estimated 2,000 unlicenced (referred to as “unadmitted”) insurers. Few insurers are licenced in each of the 50 states and the federal government plays a negligible role monitoring insurer finances and behaviour. It is somewhat 36 www.canadianapartmentmagazine.ca

a ‘wild west’ kind of situation, with each state imposing different requirements and each state having its own oversight system—some strict and others less so. In addition, there are many insurers that are set up for specific types of business. Thus we find insurance organizations that are grouped together and consist of numerous insurance companies with common ownership. Berkshire Hathaway is one of the most recognized companies with multiple insurance arms. The A.M. Best rating system In the U.S., capital can move between the various owned subsidiaries relatively easily. The movement of capital can be triggered by poor results in one of the insurance companies, tax strategies—or any number of reasons. As a result, lenders in the U.S. have to turn to independent sources to make certain that the insurer their Borrower is using is financially credible and able to pay claims. The biggest and oldest of these

independent sources is A.M. Best, a financial rating firm that rates not just insurance companies, but also many other industries, including banks. Annually, A.M. Best will assign a rating that can be anywhere from A+ to B- (or refuse to assign a rating at all— the system is a bit more detailed) and this can change annually based on the financial review that A.M. Best conducts. Lenders will demand that the Borrower must use an insurer whose A.M. Best rating is at least somewhere at the A level. Most insurance companies, with some exceptions, pay significant fees annually in order to keep their rating looking as good as possible. It’s an important part of doing business. In Canada, we have a different insurance oversight system. With very few exceptions (mostly a very small farm insurer group in southern Ontario) insurance companies are nationally licenced by the Federal Superintendent of Insurance. This department conducts annual audits, sets capital requirements and issues licences to do business. It reviews reinsurance

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Insurance arrangements and imposes strict rules as to how an insurer must operate in Canada. Removing capital from an insurance company is almost impossible, experts say. If an insurance company stops doing business, for example, it typically takes 10 years. Because the federal government’s oversight is so thorough, a significant portion of the insurance industry avoids the expense of an A.M. Best rating. Those

ADVICE YOU

Canadian insurers that do have a rating are generally part of a larger international insurance group. Some Canadian lenders have quietly added the requirement that the lack of an A rating from A.M. Best disqualifies an insurer from being used. This may well require the Borrower to move the building’s insurance from an existing carrier to one that has an A rating. The requirement typically comes at a cost to the Borrower. For example:

CAN TRUST

2) If timed with the renewal, the need to change insurers still exposes the Borrower to higher rates, if the existing insurance was is in a competitive program. Understanding the cost Here is a costing example. A building is insured for $20,000,000. In Toronto, if that building is in reasonable condition, insurance rates will vary from a low of five cents per $100 to a high of perhaps seven cents. That comes to a range of $10,000 to $14,000 in an annual insurance cost. The cancellation of an existing policy, on a building of this size, can cost as much as $2,000 (there are other coverages that are part of the policy) and the replacement insurance as much as $4,000 more each year. This is because the large A.M. Best-rated companies can easily charge more than the non-rated carriers, especially the Canadian insurers who are not active outside of Canada. Over a two year period, the cost difference in insurance premiums can be as much as $20,000 on a building of this size. Where a claims history is present, of course, that impact can be even greater. Some owners may not feel that this is an important amount of money. Others will have the opposite opinion—after all, in business the lowering of costs is important. A borrower should always request a detailed copy of the insurance requirements before finalizing a commitment, in order to see if the A rating by A.M. Best is included. In Canada, there should be no need for this requirement whatsoever and it should be removed.

Experts In Real Property Appraisal Janterra is a Canadian leader in the real estate appraisal industry. We have built our success on extensive research, effective investigation, intelligent analysis and objective and accurate valuation. Janterra offers a comprehensive team of appraisers which includes six AACI and two CRA designated appraisers as well as an analytic staff of 3 candidate members. The principals contribute over 200 years combined experience and in all market sectors. Our market knowledge as well flows from an extensive national real estate network. We provide clients with unmatched expertise across all asset classes and we service clients on local, provincial and national assignments. Janterra operates out of two offices in the Greater Toronto Area. Mortgage financing and lending purposes • Lease-up and repositioning scenarios • Market Rent and Lease Analysis • Mediation/Arbitration • Land rent and ground lease valuations • Lease arbitration and negotiations • Quarterly and annual reporting • Acquisitions & Expropriation negotiations • and more

Janterra is pleased to have joined forces with Rajesky and Associates and in particular is looking forward to the opportunities to expand their litigation and specialty advisory services through this merger. 416 423-3334 / 1 800 989-9011 www.janterra.com

1) The insurance in place at the time must be cancelled, thus triggering an approximate 13 percent early cancellation penalty to which the insurer is entitled. The penalty results in a return premium of only 87 percent, which is pro-rated on the basis of the time remaining to expiry. Switching to a A.M. Best-rated carrier generally means rates that are higher.

1526 Danforth Ave. Ste 200 Toronto, ON M4J 1N4

Andy Schwartze, BSc., MBA, CIP, is an insurance broker specializing in property management and real estate. He is a former President of the Insurance Institute, has taught in the community college system and provides continuing education to other brokers. He can be reached at andy@takecover.ca.

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