Canada’s Most Widely Read Condominium Magazine
WHERE THERE’S SMOKE…
August 2015 • Vol. 30 #5
+
The HR issue
Hiring, firing and leadership
A spate of fires out west has reignited the conversation about the perennial risk improperly discarded cigarettes pose to multi-res buildings
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Contents FOCUS ON: HUMAN RESOURCES
12
14
The condominium as workplace By Jeanette Bicknell
10
Ask the expert
34
Smart Ideas
How to select a new property management company By Shlomo Sharon
FEATURE
16
IN EVERY ISSUE
DEPARTMENTS Firestarter By Michelle Ervin
22
Governance Comment: The case for mandatory director training By Bill Thompson
26
Condominium leadership is a team sport By Tania Haluk
28
Legal When unit owners block pest control By Michelle Kelly
32
Management How to develop a working RFP By Ron Segura
Kazi M Shahnewaz
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THIS MONTH’S ONLINE EXCLUSIVES ALL THE BUZZ
Condo project promises Muskoka in the city At a time of year when many Torontonians escape to cottage country on weekends, Curated Properties has revealed plans for a condo project that promises to deliver Muskoka in the city. CABIN is a six-storey collection of 25 two-level stacked townhouses that will rise at 45 Dovercourt Rd., an offshoot of the hip West Queen West strip.
A record-setting 8,200 GTA condo apartment units were rented through the MLS system during Q2-2015.
FROM THE GREEN BIN
Balcony mishaps in residential towers On July 5, 2015, a 19-year-old woman was critically injured after falling from a fourth-floor apartment balcony in southeast Ottawa. Fortunately her condition has steadily improved, but that’s not always the case. Stories of fatalities due to faulty balcony railings, structural deterioration, and unsafe behaviour are rampant in the news.
West coast condos to rise on rare waterfront site Concert Properties is this month preparing to launch Voda, the first of four condominium buildings that will be constructed on one of the last parcels of waterfront property in Vancouver. Collectively, the buildings will form a masterplanned community to be known as The Creek, after its location on the southeast corner of False Creek.
The Extended Motor Product Label Initiative is developing new energy performance labels for pumps, fans and compressors.
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EDITOR'S LETTER /condomediaedge /condobusiness /condomediaedge
Where there’s smoke… From time to time, in the last building I lived
in, residents would post unauthorized flyers in the common areas — namely the elevator and lobby — before management would inevitably take them down. Often, they would advertise furniture for sale or make a plea for the safe return of a lost item. One day, a resident posted a flyer asking her neighbours to quit flicking their cigarette butts off the balcony — they were landing on her balcony and burning holes in her patio furniture. In a sense, she was lucky. Burnt holes in patio furniture is upsetting, to be sure, but it’s not lifethreatening. Shortly thereafter came formal posters from management, highlighting the fire risk this improper disposal of cigarettes posed to the property, and more importantly, to residents. It’s a risk that has existed as long as people have been living in multi-residential buildings with balconies. But the risk is back in the news after a fire attributed to an improperly disposed of cigarette devastated an Edmonton condo, causing $16.3-million in property damage and forcing residents out of their homes. The event has reignited the perennial safety conversation. For our cover story, I report on Edmonton Fire Rescue Service’s response, emerging risk factors for balcony blazes in multi-residential buildings and lessons for condo communities in Ontario. Also in this issue, we turn our attention to human resources. Jeanette Bicknell breaks down the duties of condo corporations in their capacity as employers and Shlomo Sharon shares his tips for selecting a new property management company. Plus, Tania Haluk highlights how boards of directors and property managers can work together to provide effective leadership in their communities. Fire safety is one of many areas in which boards of directors and property managers can show leadership in their communities. It would be naïve to think that the act of flicking cigarette butts off balconies could be policed or snuffed out completely. But education, such as communicating the fact that some planter materials — often used as makeshift ashtrays — are flammable, could at least throw cold water on a condo’s risk factor. Michelle Ervin Editor, CondoBusiness michellee@mediaedge.ca
Associate Publisher Mitchell Saltzman Editor Michelle Ervin Advertising Sales Sean Foley, Stephanie Philbin Senior Designer Annette Carlucci Designer Jennifer Carter Production Manager Rachel Selbie Production Coordinator Karlee Roy Contributing Writers Jeanette Bicknell, Michelle Kelly, Shlomo Sharon, Ron Segura, Bill Thompson Digital Media Director Steven Chester Subscription Rates Canada: 1 year, $60*; 2 years, $110* Single Copy Sales: Canada: $10*. Elsewhere: $12 USA: $85 International: $110 *Plus applicable taxes Reprints: Requests for permission to reprint any portion of this magazine should be sent to info@mediaedge.ca. Circulation Department Maria Siassina circulation@mediaedge.ca (416) 512-8186 ext. 234 CONDOBUSINESS is published eight times a year by
President Kevin Brown Accounting Manager Maggy Elharar Group Publisher Melissa Valentini 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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ASK THE EXPERT
When the personal becomes professional Our digital presence, on platforms such as Facebook and Twitter, has all but erased the line bet ween
professional and private life. For proof of this, consider the case of the Hydro One employee
who was publicly shamed and ultimately fired for conduct — defending lewd comments toward a TV reporter — that occurred on his personal time, after he was identified via social media. We asked employment lawyers: What is one precaution employees should take to protect themselves from professional repercussions in this new era of online visibility?
Understand obligation not to damage employer’s brand The only response employers can easily take to ensure that they avoid being buffeted by the adverse publicity and damage to their brand from miscreant employees making fools of themselves on social media is to adopt a social media policy and concomitant Code of Ethics. These twin policies will regulate the conduct of employees outside of the workplace and make it cause for discharge to conduct themselves in a fashion, both inside and outside of work, which would result in their organization being placed into potential disrepute. Employees have to understand their obligation to not damage their employer’s brand and that they, as employees, are always extensions of their employers. If they do that, and require employees to actually sign those policies, they will not only reduce the risk of employees misconducting themselves but will make such misconduct cause for discharge without severance. Howard Levitt, senior partner, Levitt & Grosman Be mindful of online presence Employees must be mindful of how they portray themselves online. If an employee’s online presence conflicts with his or her employer’s interests, the employment contract and/or social media policies, it can be relied upon to justify discipline, up to and including termination. For example, employees have been terminated for posting harassing comments, discriminatory remarks, and referencing illegal activities. In fact, improper online conduct may justify termination without severance. Even post-termination severance negotiations and settlements have been jeopardized by improper social media posts. Employees must therefore beware that their activities online can be accessed by employers and have serious workplace repercussions. Paul Macchione, lawyer, Whitten & Lublin & Ozlem Yucel, lawyer, Whitten & Lublin
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ASK THE EXPERT
Privacy settings may not protect you Tweets are considered public comments that can harm an employer’s reputation even if you mistakenly believe the tweets are private. And while you can block access to your tweets, you cannot stop your followers from reporting your twitter posts. I repeat: privacy settings will not necessarily protect you from legal repercussions. If you identify your employer in your twitter profile or in your tweets, then you can be disciplined if one of your tweets harms the reputation of your employer. What’s more, you can be disciplined for an inappropriate tweet even if no one complains about it. If it comes to the attention of the public through a newspaper or radio or TV report, then your employer could discipline you for it.
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Aird & Berlis LLP is at the hub of commercial real estate matters. Consider all stakeholders in your life before you post or tweet Assume that your words and conduct are permanent and entirely public when in public (online or otherwise), whether or not you think you are acting anonymously. If you are okay with all stakeholders in your life (employer, client, board members, mother, etc.) seeing your tweet or post, then don’t hesitate — jump in and participate. But do not assume only the intended target audience will read or see your post on some backwater blog. The online world is a collective world — no one person controls which messages will attract a life of their own and land on your employer’s desk. Lisa Stam, employment lawyer, Koldorf Stam LLP
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August 2015 11
HUMAN RESOURCES
The condominium as workplace Condominiums are communities, and for the managers, securit y
BY JEANETTE BICKNELL
personnel, housekeeping staff and contractors who keep them in
good order, they are also workplaces. Condo corporations need to be aware of their responsibilities under the law to maintain safe workplaces. All Ontario employers are responsible for upholding Bill 168, an amendment to the Occupational Health and Safety Act which has been in effect since 2010. It establishes minimum standards and sets out basic rights and responsibilities. Although employers may feel that they “know it when they see it,” it is a good idea for them to familiarize themselves with the legal definitions of workplace violence and harassment. Defining workplace violence and harassment “Workplace violence” means the use, attempt or threat to use physical force that causes, or could cause, injury in a workplace.
The threat of violence includes threatening notes, emails, or telephone calls. “Harassment” is defined as a course of vexatious or bothersome comment or conduct that is unwelcome, or ought reasonably to be known to be unwelcome. Examples include bullying, intimidating or offensive jokes or innuendos, displaying or circulating offensive pictures or materials, and making offensive or intimidating phone calls. A “course” of comment or conduct implies that the behaviour in question has happened more than once. (For example, a unit owner who regularly yells at a property manager could reasonably be accused of
12 CONDOBUSINESS | www.condobusiness.ca
workplace harassment.) It is worth noting that domestic violence that takes place in a workplace is covered under the Act, and that employers have a duty to protect workers from domestic violence in the workplace. Understanding the employer’s obligations Employers must have measures and procedures in place to control the risk of violence and harassment. It is not relevant who commits or threatens violence or harassment. Employers have a duty to assess the risks and to consider all potential sources. So in a condominium, this could mean another worker, a supervisor, a unit owner, a renter, or even a random stranger.
HUMAN RESOURCES FEATURE Every employer must have a policy on violence and a policy on harassment (or a single policy on both). If an employer has six or more regular employees, then the policy must be written down, reviewed annually, and posted in the workplace. Employers must also have a program to implement the policy, and they must make sure that employees are informed about both the policy and the program. (Some tools for developing policies can be found here: http:// www.labour.gov.on.ca/english/hs/pubs/ wvps_toolbox/index.php.) Finally, employers must warn workers if, in the course of their work, they will be in contact with a person with a history of violence, and if they are at risk of physical injury. Privacy concerns may be relevant here, but the right to privacy does not trump the duty to inform workers if they are at risk. (Condo corporations in such positions should consult with their lawyers for advice tailored to their specific situation.) Responding to inappropriate behaviour The basic thrust of Bill 16 8 is that employers have a dut y to recognize inappropriate behaviour and deal with it
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promptly. If an employer notices improper behaviour, he or she should step in before things get too serious. Doing nothing gives the message to perpetrators that their actions will be tolerated and adds to the disrespect that victims already feel. It can also leave employers vulnerable to investigation by the Ministry of Labour. Having a policy on proper conduct in the workplace makes the employer’s job easier because it sets out clear standards for unacceptable behaviour and reminds everyone of these standards. If an employee makes a complaint, or if an employer becomes aware of inappropriate behaviour in the workplace, the employer must do an investigation. Investigations are serious mat ters. Personal reputations are at stake, so the stress level — even for those not directly involved — is likely to be high. If an investigation is warranted, do it properly to avoid future legal hassles and costs. To start with, the employer must inform the respondent (i.e. the person who is accused of harassment, etc.) of the accusations against him or her. The
respondent must be given a chance to tell his or her side of the story. It is important to choose an investigator who is not biased, and who does not give the impression of being biased. (For example, a friend or associate of either the complainant or the respondent should not be selected as investigator.) What happens after the investigation depends very much on the seriousness of the complaint, the roles of those involved, and on the consequences that have been laid out in the written policy on violence and harassment (another reason to make sure that the policy is clear and up-to-date). Paying attention to the legal implications of the condominium as workplace helps condo corporations ensure that they meet their responsibilities as employers and ultimately makes it a better community for owners and employees alike. 1 J e a n e t te B i c kn e l l , P h . D ., C . M e d ., i s a m e d i a t o r w h o s p e c i a l iz e s i n condominium disputes and an associate with the Sadowski Resolutions Group (www.srgllp.com). She can be reached at jbicknell@srgllp.com.
August 2015 13 15-08-10 3:56 PM
HUMAN RESOURCES
How to select a new property management company So the board wants to change management companies. The
BY SHLOMO SHARON
first question to answer is: Why? What is it that the corporation isn’t getting from the current management company? What would the board like to see from the new management company? Once a board has established what it’s looking for in a new management company, the board needs to determine how it will select a new management company. Will the decision be based on information the board gets in reply to its request for proposals (RFP), or positive references?
14 CONDOBUSINESS | www.condobusiness.ca
Or maybe it will be based on an emotional connection which forms when the board meets with candidates. The reality is: all of these factors will influence the decision. The board assumes the responsibility of selecting a new management company. This selection
HUMAN RESOURCES process requires an exchange of information and personal interaction between the board and the management company candidates, which begins with the board preparing an RFP for the management of the corporation. Note: Only distribute the RFP after interested management companies have signed confidentiality agreements. Disclose building basics Introduce candidates to the building with the RFP. Disclose the basics, such as the age of the building, the number of units, the number of elevators, any amenities and any commercial units. A l s o p o i nt o u t s p e c i f i c s t h a t m a y affect the building’s future operations, such as past events (e.g. floods) or improvements. It’s important to make the management company candidates aware of what they will be walking into if they win the contract. Consider including the condominium’s common element fees per square foot to help management companies assess their ability to improve the building’s operations. Also specify whether the building is sub-metered or the utilities are included in the common element fees, as well as who manages the billing (a third party or the management company). In the latter case, additional fees may apply.
Consider the emotional connection Technical and administrative ability are a prerequisite, but those aren’t the only factors to weigh when selecting a new management company. The emotional connection between the manager, the board and the residents will have a great impact on the success or failure of the future manager. Once the board has received responses to its RFP and narrowed down its candidates to a short list, the board should encourage the management companies to visit the site to familiarize themselves with the property. Recognize, though, that such an inspection can only touch the surface. That said, it will allow both sides to get acquainted with one another. Check credentials, contact references Look for ACMO 2000-certified management companies. The certification, awarded by the Association of Condominium Managers of Ontario (ACMO), recognizes quality of service. More specifically, ACMO 2000 certification signifies that a company has successfully completed a third-party audit and complies with industry standards. Also consider making it a prerequisite that the
management staff who will be assigned to the building either possess or be actively pursuing the Registered Condominium Manager (RCM) designation. The board should prepare a list of questions to ask the references provided by the proper t y manager. At least two board members should check the references. Keep in mind that references usually support the candidate. Therefore, it’s important to ask the right questions, which should cover daily management tasks and the management personnel. Finally, insist on meeting the designated manager to ensure that he or she is the right fit. A good fit between the manager and the board will ultimately help alleviate the board’s workload. Clear communication is a key ingredient in the success of this relationship. W hen hiring a new management company, always remember that while the physical and administrative abilities of the management company are important, so too is the human connection. 1 Shlomo Sharon is CEO of Taft Management Inc. He can be reached at shlomos@taftforward.com.
Set out service requirements Clearly spell out in the RFP what services are required, along with the board’s expectations. For one, the manager should be able to prepare the budget for the corporation and review the financial results with the board. A firm which has the right personnel and accounting software will deliver accurate and timely financial information that will improve the overall management of the property. A l s o d e s c r i b e t h e b u i l d i n g ’s demographics, as services will often vary based on the age and background of residents. A building which skews senior may have residents who require more assistance, while a building which skews younger may require more rules enforcement as a result of social activities. Include other responsibilities, such as overseeing contractors and maintenance staff, conducting monthly reviews of the building’s physical elements and responding to any new maintenance issues. August 2015 15
COVER STORY
FIRESTA
COVER STORY
ARTER BY MICHELLE ERVIN
Shortly before 5 p.m. on Friday, May 22, residents on the west side of the Avenue complex at 301 Clareview Station Dr. W. noticed the flames. At 4:47 p.m., dispatch sent Edmonton Fire Rescue Services to the four-storey condominium. On arrival, first responders found the building fully engulfed from the exterior.
August 2015 17
COVER STORY
It took three hours and six pump trucks, five ladder trucks, three rescue trucks manned by 60 firefighters, three district chiefs and 15 units to bring the blaze under control. No one was seriously injured, but before the three-alarm fire could be extinguished, it caused $16.3-million in property damage, destroying the building and displacing roughly 300 residents. The fire was one in a spate of recent condo blazes in Alberta — all caused by improperly disposed of cigarettes — that has reignited conversations about the p e re nni a l f i re s a fet y r i sk i n m u l t i residential buildings. M ost not ably, Edmonton Fire Rescue Ser vices, along with Alberta Municipal Affairs, has launched a public safety campaign called Stub it Right, Don’t Ignite. “It seems very innocent that you drop your butt into a planter, or think that you’ve extinguished it, and walk away from it,” says Edmonton Fire Chief Ken Block. “Two or three or four hours later, it ignites
into an open flame and the result can be catastrophic.” The campaign responds to a roughly decade - long rise in the cit y in the occurrence of fires linked to improperly disposed of smoking materials. Chief Block attributes the upward trend to large, often wood frame, four-storey residential complexes built in Edmonton between the early 2000s and 2009. Alberta’s largest single-loss fire, which caused $23-million in damage to multiple residences during their vulnerable stage of construction, prompted changes to the province’s fire code in 2007. The some 400 large, multi-residential, wood-frame buildings constructed before the new standards took effect remain especially prone to fires caused by improperly disposed of smoking materials. Though the Stub it Right, Don’t Ignite campaign is geared toward the public in broad terms, it will also take specific steps to target these most vulnerable buildings.
As part of the campaign, Edmonton Fire will be calling on condo associations to declare their building either smoking or nonsmoking. Smoking buildings will be required to provide commercial grade receptacles on all balconies — likely beginning in 2016 — or risk facing a fine under city fire code bylaws. Non-smoking buildings will be required to post non-smoking signs on all balconies. Edmonton and Toronto have their differences — operating under different provincial fire codes being a major one — but their municipal fire services share concerns about the fire hazard caused by the improper disposal of smoking materials from balconies. P e t e r D e r r i n g t o n , d i s t r i c t c h i e f, Toronto Fire Services Public Education, describes it as a “significant problem,” and a perplexing one at that. Technically, he explains, it’s not illegal under the Ontario Fire Code to flick a cigarette butt off a balcony.
BLAZES BY THE NUMBERS In Ontario, the Office of the Fire Marshal and Emergency Management maintains a database of every call local fire departments receive. Its latest multi-year study of these statistics, spanning 2009 to 2013, shows that the total reported fires in the province are on the decline. So are losses (including deaths, injuries and financial) and structure fires. Here are a few stats to put the risk of improperly disposed of cigarettes into context:
7%
The share of structure loss fires caused by cigarettes; more are caused by cooking (18 per cent) and electrical wiring and heating and cooling (nine per cent each).
3%
The amount by which structure fires caused by cigarettes dropped in the five-year period spanning 2009 to 2013 compared to the previous five-year period.
18 CONDOBUSINESS | www.condobusiness.ca
530
The average number of fires per year (between 2009 and 2013) ignited by cigarettes.
1
Cigarettes remain the top cause of fatal fires in Ontario.
COVER STORY
Where Toronto Fire Ser vices does have some capacity to intervene is in cases of combustible materials stored on balconies, which can serve as kindling if a cigarette butt blows back onto a balcony or neighbouring building. Derrington cites section 2.4 of the Ontario Fire Code, which prohibits combustible waste materials in and around buildings to accumulate in amounts or locations where they pose a fire hazard. “The only problem we have with that is that it does address combustible waste materials, so you look at waste — what is waste?” he says. “It’s not cut and dry and certain portions of the code do not apply to a dwelling unit, so that’s also something that we have to be aware of.” The Fire Prevention Act also empowers loc al fire depar tments to order the removal of materials, though it doesn’t guarantee they will. “It is very common to have some form of combustible material on the balcony,” says Derrington. “If somebody had a patio set and they had a mattress pad on a chaise lounge, that can be combustible, but then we have to look at: Is it an unusual situation that poses a significant risk that we would have to address?” When Toronto Fire Services distributes and presents educational information to residents groups, it attacks the risk from both angles. One, residents need to understand how to properly dispose of cigarettes from balconies — in a deep, non-combustible ashtray. Two, residents need to understand that balconies are not suitable for storage — they do not require sprinklers by code as storage lockers do. These two factors can converge to ignite a fire and cause significant damage, which is precisely what happened in 2010 at 200 Wellesley St. E. in Toronto. The blaze resulted in the injury of 17 people and significant property loss at the 30-storey, 711-unit apartment building. An emerging concern for Derrington is the declining acceptance of smokers in the home. Though positive, it has had the unintended consequence of pushing smokers out of the home and, in the case of multi-residential buildings, onto balconies.
“Not that we want people smoking inside, either, but I think that’s a current trend that will potentially result in an increase [in these types of incidents],” he says. “If there is a smoker, they’re being kicked outside, which, in a highrise building, may mean a balcony, and then what they’re doing is of course
tossing the cigarette off the balcony, and I think that’s causing problems.” Stacey Kurck, vice president of Harmony Management, can attest to the “constant problem” of cigarettes improperly disposed of from balconies. Between the 58 condo buildings her firm oversees, Kurck estimates that
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COVER STORY
management staff send out a notice to residents at least once a month. During warm weather, the notices can be as frequent as once a week, she says. A recent notice alerted residents to “numerous incidents,” cautioned about the dangers of cigaret tes discarded from balconies and asked anyone with information to contact management or JermarkPIPE_Condo_Apr09.pdf 5/1/09 police. In one case, the management
firm drove home the message with photos of damage to a building across the street c aused by a balcony fire ignited by a cigarette. Unless cigarette butts are found on the common elements, it is normally resident complaints that trigger these reminders, says Kurck. Depending on the way a building is designed, the culprit can be tricky 4:00:12 PM to pin down. Her firm posts notices on its
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web portal and in elevators, only distributing paper notices as necessary. “If the unit on the 11th floor is complaining, then we’ll go door-to-door on that side of the unit, to all the units above it,” she says. Resolving the issue usually re q uire s re p e at n oti c e s , e s p e c i all y in heavily tenanted buildings. In one building where the problem was par ticularly acute, the board of fered residents c ompliment ar y buckets of sands for use as balcony ashtrays, which saw some uptake, says Kurck. Back in Edmonton, Fire Chief Ken Block is bringing together various stakeholders to address the problematic features of the city’s buildings constructed before the 2007 Alberta Fire Code change. Potential answers might include building balconies with sprinklers and non-combustible siding. The current vinyl siding in wide use has a low combustion level, he explains, causing fires emanating from balconies to spread so rapidly that firefighters don’t have time to effectively intervene. Instead, they are forced to simply protect exposures. (Ontario recently lifted its height limit on wood-frame construction from four to six storeys, but with additional safety provisions attached. These provisions include requirements for sprinklers on all balconies measuring more than 610 millimetres in depth and combustionresistant or non - combustible exterior cladding and roof covering.) Chief Block says the strongest safeguard against the risk posed by improperly disposed of cigarettes would be smoke-free buildings. But he adds that it isn’t the only fire hazard on balconies — barbecues are another big one — which is why education is so important. “We need to improve the status quo or we can expect to relive these significant events over and over again, and that would be a shame…” said Chief Block. “We’ve been very fortunate in that there’s been no loss of life yet from one of these types of events. “That Clareview situation, that happened around the dinner hour, around 5 o’clock. If that event happened at 3 or 4 in the morning, the potential for a very different outcome troubles me.” 1
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August 21 15-03-17 2015 11:14 AM
GOVERNANCE
Comment: The case for mandatory director training T he O nt a r io g ov e r n ment ’s proposal to make free education/
BY BILL THOMPSON
training mandatory for new condo directors is sure to receive a hail of criticism from the people who fill these volunteer positions. They
are already giving their time for free, so how can they be required to spend more time taking courses?
22 CONDOBUSINESS | www.condobusiness.ca
GOVERNANCE
The proposal is embedded in Bill 106, which, if passed, would amend the current Condominium Act (1998). It received first reading on May 27, 2015, and must proceed to second and third readings and receive royal assent for it to become law. Between now and then, there will be opportunities to weigh in on the proposed changes, and existing directors are likely to have something to say about the prospect of mandatory education/training for them to remain as directors of their condominiums. Imagine the shock after board elections when new volunteers are told that they will be removed from their positions if they do not complete mandatory training courses for directors. How many seats will remain vacant because the volunteers do not want to spend the time taking a course? How many potential directors will simply not put their name forward to run for election once they learn of the new requirements for training and education? How many boards will fail to get a quorum of directors elected at their annual general meetings? How will boards operate if the existing directors do not stay on? How will business get transacted? How many existing directors will remain for longer periods than they originally planned on volunteering because of this requirement on new directors? Will condominium boards experience “volunteer fatigue” where the directors are not energized and are simply going through the motions? From the narrow perspective of the volunteer director, the case against mandatory training is strong. But there are many examples of volunteers who have to go through a much more rigorous review to qualify for their roles. What’s more, there is no shortage of people who are willing to do whatever it takes to make a difference in their world. A p e r fe c t ex a m p l e i s t h o s e w h o l e n d t h e i r t i m e i n vulnerable sectors, such as volunteers in daycares, retirement communities and hospitals. They must undergo an extensive b a c kg ro u n d c h e c k w h i c h i n c l u d e s f i n g e r p r i nt i n g . T h e screening process can even impose on their friends and families, yet they still go through with it and volunteer their time! People who are passionate about helping others will do whatever it takes to lend a hand. From the broad perspective of unit owners, who benefit from directors’ volunteer time, the case for mandatory training is even stronger! W hy shouldn’t a condominium director, who will make decisions about a multi-million-dollar asset, prove that they have the basic knowledge and understanding of their role to make those decisions? W hy shouldn’t a condominium owner have some reassurance that the person leading their condominium is equipped to do so? Why shouldn’t there be some way of impressing upon board members their ethical responsibilities and the conflict of interest guidelines? Why shouldn’t an owner be comfortable that the directors have agreed to act in the best interest of the condominium?
Condominium boards are made up of people from all backgrounds. Their belief systems, ethical values, and business practices widely vary. The current Condominium Act fails to define what fair practices lo ok like, and simpl y refers to the “reasonable p erson” test. H ow does a “reasonable person” conduct themselves? There is no well- defined set of standards. Certainly, ensuring v o l u n te e r s h a v e b a s i c k n o w l e d g e w o u l d r a i s e t h e “reasonable person” test level from where it is now, and that can’t hurt condominium owners. Over the years, this condominium management professional has had the pleasure of teaching basic director education to many hundreds of volunteer directors on behalf of organizations such as the Canadian Condominium I ns ti tu te. T he se d ire c to r s u n d e r s to o d the p owe r of having the right information and set the expectation for reasonably educated, reasonably qualified directors in their drive to create better condominium environments for themselves and their owners. It is not by accident that the value of informed, educated leadership has been recognized for more than 30 years by organizations like the Canadian Condominium Institute and other associations.
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GOVERNANCE
T he government is long overdue in recognizing that directors have a duty to complete basic training to ensure that they are aware of their responsibilities. Ontario’s condominium sector has gone from a fledgling industry in 1967, to a thriving, driving, economic force in 2015. Today, more than 1.3 million Ontarians rely on the volunteer services of elected board directors. The Ministry of Consumer and Government Services’
most recent figures show that there are 70 0,0 0 0 condominium units in Ontario. To extrapolate out, using a conser vative average unit value of $ 2 5 0 , 0 0 0 , this m e ans vo lunte e r s manage real estate that has a rough collective value of more than $175 - billion! W h at other industr y would entrust uneducated volunteers with the stewardship of such sizeable assets? None come to mind. 1
Bill Thompson BA , RC M , AC C I is the p re s i d e n t o f M a l v e r n C o n d o m i n i u m Property Management, an ACMO20 0 0 c e r tifi e d c o m p a ny. H e i s th e c u rre nt n a t i o n a l p re s i d e n t o f t h e C a n a d i a n C o n d o mi niu m I nstitute, p rovi d i ng leadership to the condominium industry t h ro u g h o u t C a n a d a , a n d a p e rs o n a l believer that education and training are the keys to leading successful condominiums.
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August 25 15-08-12 2015 12:05 PM
GOVERNANCE
Condominium leadership is a team sport Leadership is one those words BY TANIA HALUK that means different things to different people. Simply put, it is generally agreed that
a leader is someone who motivates a team to reach a specific goal. This translates well to the condominium industry on many levels.
Both the board of directors and the management team have leadership responsibilities. What follows is a description of their individual responsibilities as well as ways these two groups can work together to make the community the best it can be. Board of directors Currently, Ont ario’s C ondominium Act sets o u t t h r e e qualifications for board members: they must be over 18 years old, not have an undischarged bankruptcy and be
26 CONDOBUSINESS | www.condobusiness.ca
mentally sound. Proposed reforms to the Act would expand those qualifications to include mandatory education of board members. In the meantime, corporations can also amend bylaws to enhance member requirements and set additional qualifiers of who can serve on the board. Some bylaws require board members to commit to attending a certain number of meetings per year or forfeit their position. It is important to understand this commitment, as the board is the primary leader of the community.
GOVERNANCE Leadership at the board level includes many factors. Board candidates need to motivate owners to vote them in. Once elected, the board needs to motivate owners to attend owners meetings and support the decisions the board makes on the condo corporation’s behalf. The board and management need to form a leadership team to inspire owners to participate in this process and become active in the community for it to thrive. Leaders engage their community to move projects forward and ensure all residents are aware of goals and the process to get there. The board is accountable to residents to ensure these goals are reached and to provide status updates in the interim. No resident should have a question about what is happening in the community if the board communicates clearly in regular correspondence. Although board members only have authority to make decisions at duly constituted board meetings, their leadership continues outside of the boardroom and owners meetings. It means leading by example, by following the declaration, bylaws and rules. (Some boards fail to recognize the importance of how residents perceive their actions.) It adds to the management team’s burden in enforcing rules when the board is uncooperative. It also exposes the board to claims if only some residents are expected to comply and others not. Lastly, for the board of directors to form an effective leadership team, its members must prepare for board meetings. The agenda, reports and minutes are circulated in advance with the expectation being that the material will be read beforehand, not at the meeting. The board should be prepared to make decisions and discuss current items. Time wasted by lack of preparation and indecision only lead to frustration, which is felt throughout the community. This is also true of a board that does not stand united once it makes decisions. A true leader will support the best interest of the community, even if it means changing his or her original position. Ultimately, the board of directors oversees the day-to-day operation of its community. For a group of volunteers, this represents a significant undertaking and responsibility. Recognizing this, savvy board members typically opt to hire a professional property management company to facilitate this process with expertise. Management team Currently, condominium managers do not require a license to enter and practice the profession in Ontario. That may change, as proposed Condominium Act reforms include the Condominium Management Services Act, which would regulate the profession. It is imperative that boards choose professional management companies with the expertise and capability to meet the community’s needs by delivering exceptional service and leading the way in the industry. Leadership from the management team is equally important to leadership from the board for a community to run effectively. The manager has a long list of accountabilities in its role supporting the board and the residents. Managers need to reciprocate trust and respect to instill confidence in the communities they serve. Communication is the key to success and it should always be clear, concise and repeated. This holds true for reporting to the board and to the community, regardless of medium used (e.g. website portals, weekly reports, newsletters, e-blasts).
Management team members must love what they do to be effective leaders. Similarly to the board, management must also lead by example. This means bringing passion and inspiration to daily activities while building relationships within the community. This will create a contagious effect of positive reciprocity. Always be mindful that people want to feel welcome when returning to their homes. At the same time, management must handle the business aspects of the job quickly and with good judgment. The board relies on the management team’s leadership to set goals for the community and create an action plan to reach key targets. Managers also show leadership by inspiring and motivating the community to actively participate in reaching these goals together. A willingness to collaborate is an important trait in leading a team to success. Strong leadership from the team formed by both the board and management ensures effective meetings and expedites the ultimate goal of achieving the vision for the community. It also creates a culture where residents want to be on the board and are proud of where they live. A successful community can be seen as a small town with strong elected leadership (mayor and council) that continues to set and achieve goals and provide solutions to increase value for and enhance the lifestyle of every resident. 1 Tania Haluk, BA, RCM, is the vice president, operations, start-up team for FirstService Residential. She can be reached at tania.haluk@ LeacShield_Condo_August_2015_FINAL.pdf 1 15-07-08 11:11 AM fsresidential.com or 416-847-2339.
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August 2015 27
LEGAL
When unit owners block pest control The recent decision in Carleton Condominium Corporation No. 25
BY MICHELLE KELLY
v. Eagan sheds some light on the factors that a court may consider when faced with an owner who fails to treat bed bugs in his or her unit. The facts of the case are as follows: The condominium discovered that a unit was full of an excessive amount of debris and was infested with bed bugs. Over a two -year period, the condominium sent various letters to the owner about the required work. The owner refused to prepare the unit for treatment, so the condominium brought an application against the owner claiming that the owner failed to maintain and repair his unit. The judge reviewed the condominium’s declaration and the relevant provisions of the current Condominium Act and concluded that the owner breached both when he failed to prepare his unit for treatment for the bed bugs. The judge also found that the owner breached section 117 of the Act because he allowed a condition to exist within his unit that was likely to damage the property or cause injury to an individual. Specifically, the judge found that the “bed bug infestation is a condition which is conducive to propagation and spread to the other
28 CONDOBUSINESS | www.condobusiness.ca
units, as may have been demonstrated by the finding of bed bugs in [the unit across the hall from the owner’s unit] in the summer of 2014.” As a result, the judge made the following order: 1) 2)
3)
4) 5)
The owner must prepare his unit for treatment of bed bugs according to the directions provided by the condominium; If, after 30 days, the unit has not been prepared for treatment, the condominium shall be granted access to the unit for the purposes of preparing it and carrying out the required treatment; If the condominium is required to take steps for the owner, it shall be able to remove, discard or store items as it deems necessary; The owner must pay all costs associated with the bed bug treatment; and The owner shall pay the condominium $9,703.80 for its legal costs.
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All amounts owing by the owner were to be added to the common expenses payable for the unit. Key to success: Act reasonably In this lawyer’s opinion, the condominium in this case was successful because it acted reasonably. First, the condominium acted reasonably when demanding that the owner maintain the unit. The condominium made numerous attempts to inspect the unit and treat it for bed bugs. The condominium also provided instructions to the owner on how the unit needed to be prepared for treatment. The condominium only started the court application when it became obvious that the owner was not going to comply with his obligations. Second, the condominium sought relief during the court application that was reasonable in the circumstances. The condominium sought an order that would give the owner 30 days to prepare the unit for treatment. The condominium did not seek an order that would give it immediate possession of the unit so it could complete the work. While an order for immediate possession may be necessar y in some instances, a bed bug infestation does not rise to the level required for such an extreme remedy. The reasonableness of the condominium made it more likely that the judge would grant it the order sought, including the condominium’s costs.
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Legal issues The fir st ste p w hen fa c e d w ith a sus p e c te d b e d b u g infestation in a unit is to review the declaration to confirm that the owner is responsible for maintenance and repair within the unit and that there are no exceptions for pest c o n t r o l w i t h i n t h e c o n d o m i n i u m’s d o c u m e n t s . M o s t declarations require the owners to maintain and repair their units, but a few do not. For the remainder of this article, assume that the owner is responsible for his or her unit. The condominium should also inspect the unit to confirm the presence of bed bugs. The condominium must give the owner reasonable notice in writing of the proposed date and time for the entry according to section 19 of the Act. If the owner refuses to grant access to the unit, the condominium should speak with its lawyer to discuss to the next steps, which may include a court application for an order requiring the owner to grant access to the unit. During the inspection, the condominium’s pest control contractor should be present to provide an opinion about the presence of bed bugs. If the contractor confirms that there are bed bugs in the unit, the condominium should send a letter to the owner to demand that he or she treat the unit for bed bugs. The letter should include a reasonable deadline for the treatment. Once the deadline has passed, the condominium should make entry to the unit again to inspect it for bed bugs. The pest control contractor should be in attendance again to provide an opinion. If the bed bugs remain, a second or third letter should be sent to the owner. After two or three letters, if the owner still fails to treat the unit, the condominium should involve its lawyer. Finally, it may be necessary for the condominium to inform the other owners that there is an infestation in one of the units because of the chance that the bugs could spread to adjacent units. An inspection of adjacent units may also be necessary. While the costs to treat an infestation within a unit are generally the owner’s responsibility, the costs to treat the common elements or other units cannot be charged back to the owner unless the condominium can prove that the infestation originated in the unit. This will be difficult to prove, but it may be worth a discussion with the condominium’s pest control contractor. While there had been much written in the past few years about bed bugs in condominiums, this is the first reported case in Ontario where a court has declared an owner to have failed to maintain his unit because of a bed bug infestation. The case is important because the court also declared a bed bug infestation to be a dangerous condition within the unit, which allowed the condominium to commence proceedings in the court and avoid mediation and arbitration. 1 Michelle Kelly is a partner at Sutherland Kelly LLP located in Guelph. She serves condominiums, unit owners, and developers across the province. Michelle practises exclusively in the areas of condominium and real estate law.
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How to develop a working RFP W hen a ne w m a n a g ement company took over the controls of
BY RON SEGURA
a mid-rise condominium building in Chicago, one of the first steps
the new manager took was to review the contracts the building had with its vendors. What the manager discovered was the following:
• Nearly all of the same vendors had been servicing the building for a decade or more; • None of the vendors had been required to supply a list of services provided (or none could be found); • There were no records of other vendors available to perform the same or similar service; and • Finally, there were no proposals on file of any other service providers that might have bid on services for the building in the past. Because of this, the new management company believed its first obligation to the condominium board was to review all the current contracts and then create RFPs (requests for proposals) for each service. The RFPs were not necessarily going to be used to look for new service providers, at least initially, but rather to give managers a solid understanding of what services were to be provided by each vendor. The RFP process can actually be very complicated. Often, if managers are lucky enough to have an older RFP on file, they can use that as a starting point. However, even these may prove to be only of moderate help. As most managers know, buildings and building operations change over time, which means the needs of the facility can change as well. It’s at this point that many management companies decide the best thing to do is
call in a building consultant to help them build a “working” RFP. A working RFP is one designed to meet the facility’s current needs but can easily be revised and adjusted as needs, issues, and challenges change in the future. Because RFPs are all different and designed for different types of service, the best way to describe how to put together a working RFP is to use an example, and one service common to virtually all facilities is cleaning. Whether a building has in - house cleaning professionals handling maintenance work or outsources janitorial duties, it is important to have an RFP on file. The RFP will list all the cleaning-related services needed for the building, which are referred to as the scope of work (SOW). The SOW can be used and referenced no matter who is performing the custodial work. To develop the most useful SOW for a condo building, the person creating the RFP —whether an in-house person or a consultant — will likely perform many of the following tasks: • Meet with the custodial workers and ask them to list/discuss all the services they now provide for the facility; • Audit the facility to determine where the high- and low-traffic areas are located, which will help determine which areas need more or less attention; • Determine which areas of the facility
32 CONDOBUSINESS | www.condobusiness.ca
are busiest at certain times of the day. Cleaning should be scheduled to occur when these areas are least used; • Outline what services are required on an “as needed” basis as well as which are required daily, weekly, monthly, quarterly, or on annual basis; • Note what type of hard-surface flooring is installed and what type of carpeting is used. Some hard-surface floors will require more time and attention than others, and different types of carpet require different care and maintenance; • Assess the trash collection and disposal needs of the facility. For example, is a recycling program in place? • Determine whether a green cleaning strategy is in place or desired for the future; • Assess the training programs that are in place and determine whether new programs need to be implemented; • Compile a list of all room types — for example, common - area restrooms, meeting rooms, gyms, libraries, laundry facilities — and indicate how heavily they are used, how often they are cleaned, and the scope of cleaning required in each. • Analyze what preventive steps the building has taken to keep the facility clean; for instance, installing high performance mats at building entries, in walkways, and in front of elevators
MANAGEMENT helps prevent soil from being tracked into the building; • Assess how weather conditions impact the building; a facility in the drier prairie areas of Canada, for instance, would likely have more concerns about airborne dust and soil than a building in Ontario, which has a more humid climate, especially during the summer months. Also consider conducting a cleaning audit when developing a SOW. The cleaning audit may uncover cleaning issues that are a bigger concern to building residents than the management company realizes. Residents may feel, for instance, hallway carpets are not vacuumed frequently enough or, just the opposite, that hallways are vacuumed too often. Because vacuuming is such a time-consuming — which translates into costly — cleaning task, this can have a big impact on how much time and how many resources should be applied to this task. As is by now clear, putting together the SOW for the RFP can involve a number of steps, making it a time-consuming process. Hiring a qualified consultant can
help streamline the process, making it faster questions and more. This allows managers and less cumbersome. The SOW must be to meet with only those contractors that thorough in order to ensure the resulting RFP can handle their building’s cleaning needs, is workable and easy to expand if and when which can be a major time savings and the building’s needs change. make the entire RFP process much easier. With the SOW complete and an RFP Ultimately, it’s important for building created, managers should consider one managers to recognize that RFPs, RFIs, and last step: issuing an RFI — request for SOWs serve many purposes. Yes, they can information. Very often when an RFP is be used when taking bids or looking for new posted, a property manager will receive vendors, but they also serve as a road map, calls from many interested vendors. But clarifying exactly what the cleaning needs are all of these vendors well-suited to are of a facility, where, and how frequently. handle this property’s cleaning needs? In And this information can be passed on to many cases, the answer is no. An RFI will new management companies when hired to help streamline the process. manage a building. Returning to the Chicago Managers must first determine what example, the new property manager would t y p es of c le anin g c o m p anies they not have had to start from scratch but would are looking to hire. For instance, is the have had solid information as to the cleaningc ontrac tor ex p erience d in cle aning related services the building needs. 1 apartment buildings? Do they know how to implement a green cleaning strategy? Ron Segura is president of Segura Do they have the required insurance? Associates. His company works with large H ave they b e en c er ti fie d by su c h organizations to streamline their cleaning organizations as CIMS, a best practices and building operations so that they certification program developed by ISSA, function more effectively and efficiently the world-wide cleaning association? and realize a cost savings. He can be The RFI, which is distributed to potential reached through his company website at Davroc_Condo_March_2014_FINAL.pdf 1 14-03-18 10:14 AM contractors, is designed to answer these http://www.seguraassociates.com.
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SMART IDEAS
Survive a high-rise fire with 11 tools This month’s cover story investigated the perennial risk posed by cigarettes improperly discarded from balconies. While fire prevention is preferable, fire safety is essential. Residents ought also to be prepared if a blaze breaks out in their building. Toronto Fire Services suggests that anyone living in a high-rise building assemble a kit containing the following 11 items to increase their odds of survival if they get trapped in a fire: 6. A bright-coloured cloth to hang in a window or on a balcony to identify location. 7. An ink marker to write messages on the cloth, door or windows. 8. A cotton bedsheet to soak in water and create a tent near an open window if smoke in a room is heavy. 9. A washcloth to cover the mouth and nose to aid breathing in smoke-filled areas. 1. A wet towel to place at the foot of a door to prevent smoke from entering.
10. A copy of the building’s emergency procedures, and specifically, its fire safety plan. 11. A plastic pail with a lid to store the survival equipment and to fill with water during a fire.
2. Duct tape to seal door and vent openings to prevent smoking from entering. 3. Foil wrap to cover vent openings to prevent smoking from entering. 4. A whistle to signal for help. 5. A flashlight for use in case of a power failure or smoke, or to signal for help.
For more information, visit: http://www1.toronto.ca/wps/portal/contentonly?vgnextoid=5391a069d81f1 410VgnVCM10000071d60f89RCRD&vgnextchannel=e1df3840456e1410VgnVCM10000071d60f89RCRD. 34 CONDOBUSINESS | www.condobusiness.ca
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