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Canada’s Most Widely Read Condominium Magazine

July/August 2018 • Vol. 33 #3

GONE FISHING? An owner accused of casting a wide net, and other findings from the first records disputes decided by Ontario’s new online tribunal

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PA R T O F T H E

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Cryptocurrency, electronic voting and leak-detection tech

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Contents FOCUS ON: TECHNOLOGY

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Development Digging into development under Premier Ford

The potential risks and rewards of cryptocurrency in condos By JJ Hiew

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Regulation A blind spot in new EV charging station rules?

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Communicating in an era of information overload By Sue Langlois

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Recreational cannabis use to become legal this fall

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Dispute resolution gets digital By Michelle Ervin

FEATURE

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How electronic voting works By Denise Lash

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10 things prospective condo purchasers should consider By Jeff Lack

DEPARTMENTS

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Management What technology can’t replace By Lyndsey McNally The case for monitoring water use By George Tsintzouras

IN EVERY ISSUE

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Ask the expert

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New and notable


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EDITOR'S LETTER

Gone fishing?

Publisher Maya Merchant

The first five decisions to be issued by

the Condominium Authority Tribunal, or CAT, are not going to make any round-ups of cottage-worthy summer reads. The decisions do, however, offer some early insight into what to expect from the online tribunal, which was set up by the previous provincial government to provide a cheaper, quicker alternative to taking common condo spats to court, starting with a limited mandate to hear only records-related disputes. For that reason, the decisions made my summer reading list, and, not surprisingly, the summer reading lists of several condo lawyers. Also not surprisingly, one of the first five decisions to come out of CAT detailed a claim that a unit owner was on a “fishing expedition.” The adjudicator ultimately found the unit owner’s motivation to be unimportant in making a finding in that particular case, but the phrase gets at one end of the polar extremes in records-related disputes: the disgruntled unit owner who casts a wide net. At the other end of the polar extremes is the stonewalling condo corporation that unjustifiably rejects records requests. In another case, an adjudicator admonished an unresponsive condo corporation with a $1,000 fine. The sample provided by the first five CAT decisions covers a range of scenarios, including the middle ground of a case in which the adjudicator found that a unit owner had received, or would be receiving, the records he had requested. In addition to looking at these tribunal decisions, this month’s cover story examines what the experience has been like in B.C., where strata corporations and unit owners have been able to take a much broader range of disputes to an online tribunal for two years now. Plus, in this technology-themed issue, JJ Hiew highlights the potential risks and rewards of cryptocurrency in condos and Lyndsey McNally reflects on the parts of property management that ought to remain offline. Even CAT, Ontario’s first online tribunal, leaves open the door to offline communication as parties to a records-related condo spat make their way from negotiation and mediation stages to the adjudication stage. The first five decisions show that while some hearings have occurred through written online submissions only, other hearings have occurred through a combination of written online submissions and teleconferences. The decisions may not be page-turners, but they’re worth a read for condo corporations, and the property managers who support them, interested in gaining greater insight into their obligations to respond to records requests — just maybe not at the cottage.

Michelle Ervin Editor, CondoBusiness michellee@mediaedge.ca JTB_Condo_March_2017_FINAL.pdf

Editor Michelle Ervin Advertising Sales Liam Kearney, Melissa Valentini Senior Designer Annette Carlucci Production Manager Rachel Selbie Contributing Writers JJ Hiew, Deborah Howden, Warren Kleiner, Jeff Lack, Sue Langlois, Denise Lash, Mark Marmer, Lyndsey McNally, George Tsintzouras 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 Anthony Campbell circulation@mediaedge.ca (416) 512-8186 ext. 234 CONDOBUSINESS is published six times a year by

President Kevin Brown Director & Group Publisher Sean Foley Accounting Manager Nadia Piculik, CPA, CMA 5255 Yonge Street, Suite 1000, Toronto, ON M2N 6P4 (416) 512-8186 Fax: (416) 512-8344 e-mail: info@mediaedge.ca CONDOBUSINESS welcomes letters but accepts no responsibility for unsolicited manuscripts or photographs. Canadian Publications Mail Product Sales Agreement No. 40063056 ISSN 0849-6714 All contents copyright MediaEdge Communications Inc. Printed in Canada on recycled paper.

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Can boards curb what happens in exclusive-use parking spaces? Someone is parking a car with advertising/company name on it overnight in their driveway, of which they have exclusive use, contrary to the corporation’s rule. Can the corporation enforce parking rules in spaces that are not owned by the unit owner, but of which they have exclusive use? And could there be an exemption from such a rule on the basis that it would violate human rights? Deborah Howden and Warren Kleiner, partners in Shibley Righton LLP’s Condominium Law Group, answer. Exclusive use rules enforceable? The simple answer is yes, the corporation can enforce parking rules; and whether the area is exclusive use or a unit is immaterial. Under Section 58 of the Condominium Act, the board may make, amend or repeal rules, so long as the rules are related to either: • promoting the safety, security or welfare of the owners and of the property or assets of the corporation; or • aimed at preventing unreasonable interference with the use and enjoyment of the common elements, the units or the assets of the corporation.

8 CONDOBUSINESS | Part of the REMI Network

The corporation can therefore make and enforce rules relating to every area of the condo building, including suites, balconies, common areas, and parking units. To be enforceable, the rules must be reasonable and consistent with the Act, the declaration and the bylaws of the corporation. Every condo corporation has rules governing conduct on the common elements, including exclusive use common elements. Rules respecting preserving the aesthetics of the corporation are also commonplace, on the basis that an unpleasant or nonattractive environment interferes with an owner's use and


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ASK THE EXPERT

enjoyment of the common elements, the properties. One example is a municipality units or the assets of the corporation. For that prohibits commercial vehicles from being example, condo corporations often have parked on any residential lot unless parked rules that prohibit the display of any kind of entirely within a wholly enclosed building. signage in units or the common elements or that require all window coverings be Human rights exemption possible? white or off-white to ensure uniform Human rights cases are context-specific aesthetics. and so generalizations about possible A rule prohibiting signs or advertising exemptions should be avoided. on any vehicle parked on the common To invoke the Human Rights Code, the elements serves to protect the overall discrimination must be related to one or ex terior and interior appearance of more of the following prohibited grounds: the condo property. A rule in a condo race, colour, ancestry, creed (religion), prohibiting the parking of commercial place of origin, ethnic origin, citizenship, vehicles was challenged and upheld sex (including pregnancy), gender identity, in court on the basis that parking a gender expression, sexual orientation, age, commercial vehicle would interfere with marital status, family status, and disability the use and enjoyment of other units and/ or the receipt of public assistance (this last or their occupants because the parking of ground applies to housing only). such vehicles would be unsightly and thus A rule prohibiting displaying signage on interfere with the use and enjoyment of the corporation property in and of itself the common elements, common to units would not implicate any prohibited ground. in the complex. It should also be noted that There is no Code-related right to free some municipalities have bylaws placing speech or to earn a living, unless these restrictions on the parking of commercial are restricted because of race, gender vehicles (which may or may not include identity, or some other prohibited ground of 1 2018-04-13 2:44 PM of expression vehicles DelProperty_Condo_March_2018_torevise.pdf with signage) on residential discrimination. The freedom

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and other freedoms are found in the Canadian Charter of Rights and Freedoms, which applies to government action only, and not to condos. There may be particular situations in which a resident requires accommodation with respect to the rule because of either family status or on some other protected basis (e.g., a resident who must leave the company vehicle overnight in the parking space because he or she must drop off children to school early in the morning and go straight to work, or risk the employer's corrective action). However, there are a number fact-specific solutions to address these issues, such as masking the signage, or making arrangements to swap out the company vehicle nearby and off site. A condo's accommodation obligations are almost always determined in a fact-specific, case-by-case manner. Deborah Howden and Warren Kleiner are lawyers and partners in Shibley Righton LLP’s Condominium Law Group. They are condo law specialists who regularly advise condo corporations all across Ontario.


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MANAGEMENT TECHNOLOGY

How electronic voting works Changes to the Condominium Act, enacted in November, 2017,

BY DENISE LASH

allow Ontario condominium corporations to

conduct owner voting by

electronic means. While this is new for Ontario, electronic voting has been used in Australia and in more than 20 U.S. states for some time. The implementation of electronic voting addresses two challenges that condominiums currently face: • voter apathy, which results in difficulty in obtaining the quorum needed to conduct owners’ meetings; and • contentious proxy battles stemming from proxy irregularities, including fraud, as well as errors by owners in completing proxy forms and errors by the corporation in determining the validity of proxies. Voter apathy and proxy battles Corporations rely on owner participation to obtain quorum, the minimum percentage of unit owners who must attend a meeting in order to elect directors and conduct other business requiring owner approval. Electronic voting lets groups such as off-site investorowners, who might otherwise abstain or appoint a proxy, participate remotely using

a smartphone, tablet, laptop or desktop computer. There have been a number of reported cases where the validity of election results have been challenged on the basis of proxy irregularities. Disputes have centred on whether proxies were duly signed and initialed by the registered unit owner, claims that proxies were obtained on the basis of false and misleading information, allegations that proxies from owners of multiple units were not properly counted to reflect one vote per unit and even disagreements as to whether a signed prox y was actually presented at the meeting. Unfortunately, these lawsuits are costly, as well as time-consuming for the board of directors and condominium management. Electronic voting eliminates the need for owners to appoint proxies in order for their vote to be counted.

12 CONDOBUSINESS | Part of the REMI Network

The electronic voting process Here’s what the electronic voting process could look like, depending on the platform: A voting invitation is sent to owners eligible to vote. (No owners’ consent is required for this process as this is not a “Notice” that requires consent under the Condominium Act.) The voting invitation links to the ballot which will allow the owner to vote. The ballot sets out all the voting items that will take place at the owners meeting and gives the owner options as to whether to vote on items, such as the election of board members, bylaws, approval of the minutes, appointment of auditor or any item that the corporation may wish to include. Owners are given an option to use the ballot for quorum only. After the initial voting invitation has been sent out, reminders are sent to those owners


TECHNOLOGY who have not yet voted. No more than one vote per voting unit is allowed, with the vote of owners with multiple units weighted so that the owner only votes once but that vote is counted to reflect one vote per unit. There are few, if any, paper ballots or proxies to draft, distribute, collect, scrutinize and store. Owners who do not want to participate in online voting still have the option to attend the meeting and cast their vote in person or to appoint a proxy. The mandatory form of proxy can be obtained online from the Condominium Authority of Ontario website. There is no obligation for condominium corporations to provide the proxy form to owners. Independent third-party oversight adds an extra layer of privacy and security to the voting process as votes are anonymous and only the corporation receives the final vote tally. Once the voting period has ended, the final tally is automatically, rather than manually, tabulated and sent to the corporation’s designated contact person. Voting platforms can also be used by corporations to conduct informal surveys to get feedback from owners on various matters before decisions are made. Electronic voting bylaw required Before electronic voting can be carried out, condominium corporations need to enact an electronic voting bylaw. Passing an electronic voting bylaw requires a lower threshold than other typical bylaws, such as the Standard Unit bylaw. It takes a majority vote of those units represented in person or by proxy at an owners’ meeting, as long as there is a quorum at the meeting (25 per cent of the voting units). For example, if the corporation has 100 units, the quorum for the meeting would be 25 units (25 per cent) and the bylaw will pass with 13 units voting in favour of the bylaw. If online voting becomes the norm for condominium corporations, the Ministry of Government and Consumer Services will hopefully incorporate the electronic voting bylaw in the regulations to the Condominium Act so that corporations can implement electronic voting without the need for a bylaw. 1 Denise Lash is the principal of Lash Condo Law (http://www.lashcondolaw.com/) and founding partner of CondoVoter, an electronic voting platform for condominium corporations. CondoVoter’s next webinar on the electronic voting process is coming up on Aug. 21 at 10 a.m., the details of which can be found at https:// condovoter.com/.

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TECHNOLOGY

The potential risks and rewards of cryptocurrency in condos In the past few years, digital currencies such as Bitcoin have

BY JJ HIEW

entered the mainstream but remain uncharted territory for many people.

Those that are familiar with cryptocurrency are still wary of using it to buy real-world products, especially with the lack of financial regulations and sharp volatility in its value.

14 CONDOBUSINESS | Part of the REMI Network


TECHNOLOGY

However, this past winter, one Toronto man decided to take the risk and listed his two-bedroom condo for sale for 35 Bitcoin (around $450,000 at that time). He wanted to prove that Bitcoin could be used in the real estate market. Two weeks later, he found a buyer and sold his condo for 33 Bitcoin, marking the first property to be sold using Bitcoin in Canada. Is this the first sign of a shift in the condo industry towards use of digital currencies? A brief history of Bitcoin Bitcoin was the first digital currency to operate without the regulations of a central bank. Since it was introduced almost 10 years ago, nearly 1,600 other cryptocurrencies have been created and traded, and the list of digital currencies is growing. Every transaction that involves the buying, selling, or transfer of cryptocurrency is added to a decentralized immutable public ledger in “blocks” of encrypted data, hence the name “blockchain.” Transactions are then verified by the decentralized network in a process known as “mining.” Since transactions on the blockchain cannot be altered, and the ledger can be examined by anyone, this creates an explicit system of trust, which in theory eliminates the need for financial regulations. In reality, the value of Bitcoin and other cryptocurrencies fluctuates drastically, so it is unlikely that condo corporations will be accepting Bitcoin for payment of monthly maintenance fees any time soon. In the meantime, what risks and rewards could cryptocurrency and the application of the blockchain carry for condo corporations? Cryptocurrency risks What do mining for cryptocurrency and growing marijuana in units have in common? Both activities consume an excessive amount of utilities and time. Whereas there are restrictions on growing marijuana in units — some of which may remain in place even

after recreational cannabis becomes legal — cryptocurrency mining is not illegal. So, what is cryptocurrency mining? Mining is the process by which digital currency transactions are verified before being added to the blockchain. Recording these transactions in the blockchain is a computationally complicated activity which requires powerful computers to support special software that runs day and night. This software completes complicated calculations on the system — which could be likened to digging through layers of digital rock — and miners are compensated for their work with cryptocurrency. Miners who contribute more computationally earn a greater share of the digital rewards. But, it’s not as easy as it sounds. Depending on computational power, it may take weeks, months or years to mine for one unit of a cryptocurrency such as Bitcoin. The powerful computers required to mine digital currency impose a huge electrical demand and rely on powerful cooling systems so that the chips do not overheat, as well as a fast internet connection. Condo corporations that include electricity and internet in the monthly maintenance fees may see some residents using their unit as a cryptocurrency mining farm, which consequently abuses the shared costs of managing the corporation. Corporations that don’t have separately metered suites should watch out for large spikes in electrical and internet usage as telltale signs of mining. Condo corporations that have separately metered units should also be aware that miners may try to use outlets in common elements to power and cool their machines. Blockchain potential Condo corporations may not be accepting c r y p to c u r r e n c i e s a s p a y m e n t fo r maintenance fees yet, but blockchainbased applications could soon change how corporations manage contracts, monitor mechanical equipment and track their finances.

For example, maintaining a major piece of equipment such as a chiller requires regular service visits from contractors. Every service call could be logged onto the blockchain, making it possible to implement smart contracts that would release payment once property management verified that the work on the chiller was complete. In this way, developing a private blockchain specific to a condo corporation would assist property management and boards by providing traceability and accountability in the overall maintenance of the corporation, and transparency for anyone inspecting the corporation’s ledger. Corporations would not have to worry about having to dig through records in multiple places or getting a new property manager up to speed because contracts, the maintenance history of the building, and any transaction would be easily tracked on the blockchain. It’s debatable what the shelf-life of various cryptocurrencies will be. What is not up for discussion is the potential application of blockchain in everyday transactions, whether they are financial in nature or not. One of these applications can be seen in the construction of a new high-tech neighbourhood by Google on Toronto’s waterfront. Once complete, it will boast selfdriving buses, prefabricated homes, offices, retail stores, and cultural spaces, which will be supported by a network of sensors and other cutting-edge technologies designed to solve major problems of urban living. What role blockchain and cryptocurrencies will play in this new neighbourhood remains to be seen. But, what is clear is that blockchain technology has many applications beyond cryptocurrencies, including in condos potentially. Wide -scale adoption of this open, traceable digital footprint is theoretically conceivable. 1 JJ Hiew is a co-founder of GetQuorum. com, an online voting and governance notice distribution platform.

www.REMInetwork.com | July/August 2018 15


SPONSORED CONTENT

Overcoming the Costs of Marijuana Legalization

Submetering as a solution to controlling utility spikes Canada’s move to legalize marijuana on October 17, 2018, will raise more than a few challenges for property owners and managers. Among these are issues stemming from residents’ ability to grow up to four cannabis plants per residence – an allowance that will ultimately take electricity bills to new highs. At issue is the significant cost of growing cannabis plants and who will shoulder that cost in a multiresidential building. According to the CBC’s research, the total energy required to produce just one pound of cannabis is estimated to be 2000 kWh – more than four times the amount used by an average condominium

unit over the span of one month. Multiplied over several units, the uptick in energy bills can be dramatic. “The resounding fact is that growing cannabis in your suite will consume electricity and if you are not paying for your electricity directly, the cost will be absorbed by all residents in the building through higher maintenance or rental fees,” says Andrew Beacom, President and CEO with Priority Submetering Solutions. Combined with water requirements, mold risks, invading smells, and the excessive strain on HVAC equipment, the price of accommodating cannabis growers

and users is not insignificant. In buildings where utility costs are shared among all residents, the actions of a few growers can raise prices for all. Property stakeholders are within their right to ban the use of marijuana within their walls. Doing so, however, runs the risk of deterring a sizable segment of clientele. Not to mention, the cost of monitoring and enforcing such a ban would likely be more effort than its worth. “Consider a highway where the speed limit is 100 km/h. If we’re being realistic, that speed limit is not always followed,” says Beacom. “It is the same situation with cannabis. You can try to ban people from growing cannabis in their residence, but at the end of the day, it may still happen.” An alternative solution, he offers, is to leverage submetering use


SPONSORED CONTENT

to accommodate residents by keeping tabs on each unit’s utility usage and ensuring that they aren’t paying for their neighbour’s activities: “Submetering allows those who are not growing cannabis in their residence, to pay their portion of utility usage, without having to pay part of their neighbour’s utility cost.” Through submetering, a resident’s electricity, water, and gas consumption rates can be measured, monitored, and billed on a per-unit basis. The data collected via submetering can also help property owners / managers identify usage trends, report variances, and benchmark a building’s performance against other properties or entire portfolios. Cost controls aside, there are other measures to offset the impacts of marijuana users and growers within a building. Strategies include restricting marijuana use

to balconies or specific communal locations. Growers can also use specialized plant tents, odour eating gels, and air scrubbers to mitigate second-hand effects. “People are worried about the affects it will have on their residences and the buildings, but there are certainly ways to minimize and possibly even eliminate these impacts,” says Beacom.

People are worried about the affects it will have on their residences and the buildings, but there are certainly ways to minimize and possibly even eliminate these impacts.

The reversal of marijuana laws comes as good news to both medicinal and recreational users. And indeed, the anticipated revenues and business opportunities that will arise from such legalization cannot be discounted. Nevertheless, property owners / managers must consider solutions like these in advance of October 17 or risk watching their vacancy rates and bottom lines go up in smoke. 1-866-836-3837 ext. 2 sales@prioritymeter.com prioritymeter.com


MANAGEMENT

Communicating in an era of information overload

Many condo boards governing mid to high-rise buildings have opted for

BY SUE LANGLOIS

digital noticeboards in the one place that nearly every resident must occupy in order to get home — the elevator. Digital noticeboards “push” notices to a

captivated audience, rather than rely on a fickle crowd to open an email with a headline that may or may not capture their attention. However, while condo corporations still sporting a cork bulletin board may have more communication challenges than those with digital displays, even the best technology may not be much help if the message it’s used to deliver is weak or, as in many cases in condo communities, non-existent. In this era of information overload, condo residents need information designed not only to catch their attention, but to provide them with two types of knowledge: the “selfie” and the “healthy.” Two types of information “Selfie” information can be described as

items that personally relate to residents as individuals. It’s info that they want and need, because it directly affects their personal comfort. Things like windows being washed (most residents want to know when to shut their blinds!), water shut-offs, planned power outages, even party room and pool closures; these are the items that most residents want to know because residents do not like to be inconvenienced. The “healthy” category is best described as all the information a resident needs to know in order to establish and maintain a strong community with a healthy bottom line.

18 CONDOBUSINESS | Part of the REMI Network

Much like a serving of vegetables, “healthy” information keeps residents happy and safe from threatening situations that can put their lifestyle and budgets at risk. Examples include the rules and regulations of the condo corporation, insurance knowledge, proxy instructions and more. In fact, the vast majority of the 10 most common condo issues listed on the Condominium Authorit y of Ontario’s (CAO) website can be classified as “healthy” (need to know) versus “selfie” (want to know). Rules, noise, pets, shortterm rentals; these are all subjects that


GOVERNANCE Getting style and tone right Just as important as planning notices is planning what they actually say. How they look and how they make an audience feel will help determine the impact. “Selfie” notices don’t have to be too creative, but they should be clear, easy to read, and polite. Using all capital letters is akin to yelling at the reader and should be avoided. Since “healthy” notices often involve rules, the “dos and don’ts” nature can get tiresome after a while, so it’s important to get as creative as possible with these. A catchy headline or an interesting graphic will go a long way to capturing audience attention and engagement, and that is precisely what is required for that “healthy” info to translate to an even healthier bottom line. In all cases, it’s important to “feed the beast.” One of the challenges of digital display technology is keeping it current with a steady stream of content, and this is especially important in a condo environment, where most residents will see the noticeboards on a daily basis. 1

can cost a condo corporation a lot of money and yet many property managers don’t focus on them. Why not? Need-to-know messages neglected Well, for one thing, the scope of work for most property managers involves the “selfie” info. After all, it is the managers who book the window washers, the plumbers and any other contractors to the site, so it follows that the bulk of the information that they share is usually related to the daily tasks at hand. The sharing of “healthy” information is more commonly triggered by a specific issue and is quite often a knee-jerk, reactive posting of various rules and regulations accompanied by big red and black letters and numerous exclamation points. This is when the audience can get offended and tune right out. Sharing the “healthy” information proactively is a better approach. For example, springtime means the onset of balcony season, so it makes sense to start running a balcony campaign in April or May that shares reminders about furniture, glass, sweeping, watering plants and more. Posting a “slowdown-in-the-garage” campaign in anticipation of busy visitor days, such as Father’s Day, BrownBeattie_GTA_March_2017_FINAL.pdf promotes safe driving.

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Sue Langlois is the founder/CEO of DigiNotice, a digital display and creative notice service designed specifically for condos. Sue is on the CCI-Toronto board of directors and serves on the communication committees for both CCI-Toronto and CCINational. She contributed the Communications chapter of CCIT’s Board of Directors’ Tips, Tools and Techniques. Sue can be reached at sue@digi-notice.com.

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COVER STORY

DISPUTE RESOLUTIO GETS DIGIT


ON TAL

COVER STORY

Ontario’s first online tribunal has been accepting applications for help settling spats over access to condo records since last fall. What the earliest decisions signal and insights from trailblazing B.C. BY MICHELLE ERVIN

www.REMInetwork.com | July/August 2018 21


COVER STORY Condo corporations that reject records requests without a legal basis to do so may face penalties. Unit owners that file vexatious applications may see their complaints tossed out without a hearing. And industry members might be overestimating what constitutes reasonable fees for locating and redacting records. These are some of the early signals coming out of the Condominium Authority Tribunal, or CAT, which recently issued its first five decisions. The online tribunal was set up by Ontario’s previous provincial government to provide a cheaper, faster alternative to taking common condo disputes to court, starting with a narrow scope to settle records-related spats. The CAT started accepting applications on Nov. 1, 2017. As of midJuly, the tribunal had received 84 case submissions, which works out to an average of 2.3 applications per week. Ontario follows B.C.’s lead, which launched its online Civil Resolution Tribunal, or CRT, two years ago with the jurisdiction to hear a much broader range of condo disputes. The western province’s experience may offer insight into what to anticipate as CAT finds its footing as well as what its future potential could be. Higher penalties possible In the interest of transparency, unit owners are entitled to access a broad range of condo corporation records, including board meeting minutes and reserve fund studies. There are necessarily some limits to this right, such as exemptions for actual or pending litigation and personal information about other unit owners. Recent changes to Ontario’s condo laws — the same reforms that established the CAT — introduced a new process for making and responding to records requests, which is structured by deadlines and mandatory forms. Condo corporations are required to provide their legal rationale in cases where they’re rejecting records requests from owners.

The number of records-related disputes submitted to Ontario’s Condominium Authority Tribunal since Nov. 1, 2017.

84

$200

The total fee for moving an application through all three steps of dispute resolution — negotiation, mediation and adjudication — at Ontario’s Condominium Authority Tribunal.

“I’m relieved to see that three out of the five cases [at the CAT] resulted in a conclusion that condominium corporations are doing what they’re supposed to be doing,” said condo lawyer Rod Escayola, partner at Gowling WLG. “There are only two corporations where there was an order to disclose more documents.” In one case, in addition to being ordered to deliver records, the condo corporation was ordered to pay a $1,000 penalty as well as the owner’s costs of bringing the application to adjudication at the tribunal. The CAT member who decided the case found that the condo corporation had been unresponsive to the unit owner’s application until it was headed to a hearing for a binding decision, and that the corporation had ultimately fallen short of its obligation to provide access to the records.

9,384

The number of visits to the records issues page on the Condominium Authorit y of Ontario’s website since Sept. 1, 2017.

Escayola suspected that this decision will discourage condo corporations from shrugging off this obligation, especially now that it carries a higher fine — up to $5,000. “Under the prior version of the [Condominium] Act, the risk of penalty was $500, and most importantly, to get to that $500,

“I’m relieved to see that three out of the five cases [at the CAT] resulted in a

conclusion that condominium corporations are doing what they’re supposed to be doing.” 22 CONDOBUSINESS | Part of the REMI Network


COVER STORY somebody needed to go to court, and so the risk was lower,” he said. “If, in fact, we see on a regular basis that the tribunal imposes that fee or the now higher penalty, maybe that’s going to be a lesson for everybody moving forward.” By contrast, in another case, the tribunal refused to hear an application from a unit owner who argued that she was entitled to collect a penalty from her condo corporation in connection with a records-maintenance complaint. The CAT member found that the unit owner, who had previously been declared a vexatious litigant by the courts, was improperly trying to revive a dispute that had already been decided. What are ‘reasonable’ fees? Condo corporations are obligated to provide an upfront quote of the fee they expect to charge owners to cover the costs associated with delivering documents that are eligible for reimbursement. The legislation caps photocopying fees at 20 cents per page, but leaves labour fees open to interpretation, simply requiring them to be “reasonable.” Two of the first five CAT cases look at what constitutes reasonable labour fees. Both of the resulting decisions suggest condo corporations, and their advisors, might be missing the mark. In one case, the adjudicator found that the hourly rate of an articling student ($130), rather than a lawyer ($225), would be reasonable for calculating the fee for redacting records containing legal information exempt from disclosure. In the other case, the adjudicator rejected a quote of $63 per hour as a reasonable rate for the clerical work involved in locating, photocopying and re -filing records. The adjudicator, having received no evidence as to what a reasonable rate for these tasks would be, doubled the minimum wage and added HST for a rate of $31.50 per hour, leaving open the door to divergent decisions on this in the future. “I’m not sure what other comparables we could use if we were going to set an hourly wage for something that’s fairly mechanical in most cases, and I think maybe we can look at what financial institutions do,” offered Escayola, the condo lawyer. “If you’re going to ask for historic records from a bank, what’s their hourly rate to go and fish these out?” Would-be applications preempted? The CAT is designed to help unit owners and c ond o c or p orations resolve their records - related disputes with the least

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COVER STORY

“The availability of a dedicated, online tribunal is an incentive for promoting early compliance with records requests.”

amount of intervention necessary. Its three-step process requires parties to at least attempt to come to a settlement agreement, first through negotiation amongst themselves and second through guided mediation. The Condominium Authority of Ontario (CAO), which manages tribunal operations, also provides online information and tools such as email templates in an effort to preempt applications to the CAT. So far, the 9,384 visits to the records issues page on the CAO website since September, 2017, have translated into 84 case submissions to CAT since November, 2017. “In a short period of time, the CAO’s rich ecosystem of resources is already contributing to a growing awareness [of ] r ig ht s, resp o nsibilities and o b lig ations am o n g st individuals within condo communities across the province, and the availability of a dedicated, online tribunal is an incentive for promoting early compliance with records requests,” Michelle Di Rocco, manager of communications at the CAO, said in an email. “As such, and in line with the CAO’s vision and goals, the large majority of issues and concerns are effectively being addressed before they become disputes,” Di Rocco added. “For issues that remain unresolved, the CAO’s online tribunal is resolving disputes quickly, conveniently, and affordably, in support of condominium living in the province.”

$1,000

Applicants to the CAT pay a non-refundable fee to move their applications through each step of the process — $25 for negotiation, $50 for mediation and $125 for adjudication. One of the first five CAT decisions underscored that parties to a dispute should not expect to get reimbursed by way of a cost award for any legal fees incurred.

20 cents The most popular times of use for the Condominium Authority Tribunal’s online system, which is accessible anytime, anywhere with an Internet connection.

1 to 9 p.m.

24 CONDOBUSINESS | Part of the REMI Network

The penalty a condo corporation was ordered to pay to a unit owner after a Condominium Authority Tribunal member found it had fallen short of its obligation to provide access to records.

The maximum fee condo corporations can charge per page for photocopies and printouts of records that they’re eligible to be reimbursed for by owners.

“I found it interesting that a corporation asked for legal fees,” said Escayola, the condo lawyer. “It is clear in the tribunal’s rules: You may get cost — the filing fee at the tribunal — but you will not get your lawyer’s legal fees unless there are some extraordinary circumstances.” Each step of the tribunal takes place online — although adjudication may include live proceedings such as phone or video conferences — which gives parties the freedom to access the system at their time and location of choice.


“Early analysis shows that peak usage is between 1 p.m. and 9 p.m., outside the traditional workday, and users have participated in their case from as far away as Africa,” Di Rocco wrote. In cases resolved through a settlement agreement, parties can return to the CAT to obtain a compliance order if necessary. Tribunal decisions and orders can only be appealed on questions of law and are otherwise binding and enforceable through the courts. Inside the B.C. experience The experience in B.C., which blazed the trail with Canada’s first online tribunal, may or may not foreshadow what’s to come in Ontario. Like the CAT in Ontario, the CRT in B.C. is designed to help resolve common condo disputes quickly and affordably, diverting them from costlier, more protracted court proceedings. Unlike the CAT, with its narrow scope to settle records-related spats, the CRT is authorized to hear most types of strata (condo) disputes, with the exception of issues relating to the ownership and sale of property. The jurisdiction of the CRT has also been expanded to include small claims. For Tony Gioventu, executive director of the Condominium Home Owners Association of B.C., any disadvantages of taking dispute resolution online, such as losing the nuances of verbal communication in the written word, are minor compared to its advantages. For one, the act of having to commit their position to paper has forced parties to articulate their cases in a way oral arguments don’t. As a tribunal, the CRT’s decisions are not precedent- setting, Gioventu noted. Even trends have been hard to discern, he added, because case details are so specific to the strata corporation, although simpler issues, such as bylaw compliance, have produced predictable outcomes. “Those fact patterns haven’t changed, and those decisions are fairly consistent, and they’re fairly consistent with the courts,” said Gioventu. It was anticipated that the scope of disputes eligible to be taken to Ontario’s CAT would be expanded once the online tribunal had been roadtested with records-related spats. However, it’s up to the provincial government, which recently changed political stripes, to execute these plans through regulatory changes. “As condo boards go, nobody wants to be spending tens of thousands of dollars of their owners’ money in enforcement if we can have a better solution,” said Gioventu, “so my hope is that Ontario looks at B.C. and says, ‘There’s a great opportunity to evolve into the next level.’” 1

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MANAGEMENT

What technology can’t replace There was a time not that long ago that community living was about working

BY LYNDSEY MCNALLY

together to advance the best interests of every member. Consider the farming communities that settled in Canada, for whom developing community relationships was necessary for survival. Everyone in a community could rely on each other for trade — money and belongings were of little importance. Since then, technology has introduced new tools for everyday success, promising increased productivity for those who develop the new skills required to adapt to changing environments and spawning a generation that needs things to be newer, faster and better. But what is being left behind as technology becomes more a part of day-to-day living in a community? Are there things that should be done the “old-fashioned” way? How does this impact property managers specifically? What’s changing for the better, and for the worse? Customer relations Technology has had a positive impact on a property manager’s ability to give condominium residents access to information. Digital options for delivering correspondence means that when the water is shut off unexpectedly, it’s easy to let all residents in a community know about the problem — preventing many angry inquiries about the issue. More and more, however, the simple art of building relationships with clients is being lost. Electronic communication can obscure the

26 CONDOBUSINESS | Part of the REMI Network

intended message as readers impose their own thoughts and feelings onto the written material, leaving room for misinterpretation and misunderstanding. While documentation is important, so is making sure the message is clear! In particular, when dealing with a sensitive matter property managers should be mindful that picking up the phone can go a long way to helping their clients understand the subject being discussed. Conversations can always be followed up with written correspondence confirming the discussion. Physical building assets Technology has done so much for the management of the physical assets of a condominium building. It’s possible to monitor mechanical components for peak efficiency, minimizing the use of utilities, and thereby reducing costs and environmental impact, as well as extending the life of new materials, and thereby reducing long-term repairs and replacement costs.


MANAGEMENT

There remain, however, physical assets that can’t be managed using technology. Buildings and their surrounding property still need to be inspected to identify any potential problems that need attention. Even using tech-forward approaches to inspections, such as drones, a property manager still needs to physically review any camera footage collected. Images can also lack certain perspective and detail that would help a manager to strategize the best repair approach. Property managers should remember that managing the physical assets of a condominium can’t be done from behind a desk! Finances Is technology helping or hurting communities financially? There are positive and negative financial implications associated with technological advancement. On one side, technology can be expensive to purchase and maintain. On the other, technology can help save costs. While the answer is complex, the question should be considered by property managers recommending upgrades as well as by board members contemplating the financial implications of making changes. It’s important to carefully study the potential payback to ensure that, financially, moving forward on a technology project is a responsible choice.

Take a moment to consider if technology is creating a more anonymous lifestyle in condominium communities. Relationships with neighbours are extremely important for the success of a community, for many reasons. Neighbourly relationships increase safety and security, they provide an environment of support, they help people to trust each other, and they can reduce the issues that can arise among people living so closely together. All members of a condominium community, including and especially the property manager, should take the time to remember the good old days, when it was possible to borrow a cup of sugar from a friendly neighbour. Technology keeps moving forward. Property managers must embrace the changes in order to stay relevant and provide communities with the best possible service and advice. Just remember that newer and faster does not always equal better. It will be interesting to see how technology continues to change how the condominium industry operates physical buildings, but also how community members interact with each other. New challenges and solutions are sure to develop over time. Fifty years ago, the idea of every member of the population having access to instant information and communication was completely out this world. What will change in the next 50 years? 1

Community living Technology does not foster relationships. While it may give an individual greater access to others with similar interests, access alone does not bring people together.

Lyndsey McNally, RCM, is team leader for Malvern Condominium Property Management and is ACMO’s Property Manager of the Year 2017. She is not anti-technology, but concerned about losing sight of what’s really important in communities.

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MANAGEMENT

The case for monitoring water use Water bills are probably not getting BY GEORGE TSINTZOURAS the attention they deserve in condo corporations. Many recipients simply pay these bills without

questioning where the charges come from. But, how does a board of directors

or manager know if a condo corporation is paying for water use from normal activities or from undetected leaks and inefficient appliances? The price of water is steadily on the rise. In Ontario, for example, water rates increased an average of 3.8 per cent every year from 2005 to 2015, outpacing property-tax increases. What’s more, water damage has become the top insurance claim in Canada, now outnumbering fire-related claims. With rising utility prices, and more water-damage related insurance claims than ever before, the cost of water can no longer be overlooked in condo corporations. Proactive and preventative measures can help managers avoid unexpected water costs and offset rising utility rates. Paying close attention to water usage, which can now be tracked remotely in real-time using smart sensors, should be part of every property manager’s efforts to reduce operating costs, prevent property damage and decrease maintenance expenses. Identifying the source of leaks To prevent future damage and reduce utility bills, it’s important to identify the source of leaks. Some of the most common include: plumbing fixtures such as toilets; appliances such as water softeners and water heaters; and weather-related events such as frozen pipes that burst. The single most common source of leaks in multi-residential properties is the toilet. But many toilet leaks go undetected until a massive water bill arrives, or are never detected because the extra water usage is misunderstood as normal. A leaky toilet may not sound like a big problem, but in Toronto, for example, where the cost of water is $2.66 per cubic meter, one leaky toilet wasting 946 litres of water a day would cost $918.47 a year. Ten leaky toilets across multiple properties could mean wasting more than $9,000 every year.

28 CONDOBUSINESS | Part of the REMI Network

Detecting abnormal water use Managers can avoid surprises like this by familiarizing themselves with the unique water-use profiles of their properties. Real-time water use data helps establish a baseline of normal water use. Managers can then more easily identify deviations from the norm and reduce their water bill. For example, if tenants or occupants typically use three cubic metres of water from 8 a.m. to 9 a.m. during the week, but not on weekends, a manager would want to investigate if this volume of water was being used at 8 a.m. on a Sunday. Similarly, if a property is supposed to be vacant, there should be no water consumption. In this case, any water use could indicate a flood or leak. Insights about water use can also help managers understand which fixtures and appliances may need attention. For example, a water softener that regenerates too frequently can be detected and readjusted to use water more efficiently. Maximizing operational efficiencies By detecting and identifying water-related problems when they happen, managers can take immediate steps to maximize operational efficiencies, reducing wasted water before it shows up on utility bills and saving condo corporations money on consumption. 1 George Tsintzouras is CEO and co-founder of Alert Labs, a Kitchener, Ontario-based company that produces intelligent leak detection devices. George graduated from the University of Waterloo with his Bachelor of Physics and entered the field of optics. He earned his Master of Business Administration (MBA) degree from Wilfrid Laurier University, with a specialization in marketing strategy. More information can be found at alertlabs.com.


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DEVELOPMENT

Digging into development under Premier Ford How might Ontario’s development landscape shift as the Progressive

BY MICHELLE ERVIN

Conservatives (PCs) take over the provincial policy levers from a 15-year-old Liberal government? That was the overriding question that the Urban Land Institute’s (ULI) Toronto chapter asked panelists including lawyers, planners and industry representatives to ponder in July, the day before Premier Doug Ford and his cabinet were sworn in. Moderator John Matheson, principal at Strategy Corp, observed that, other than talk of increasing the supply of affordable housing and vowing to preserve the Greenbelt (after initially saying he would loosen some of it for development), Premier Ford was quiet on land use on the campaign trail this spring. That leaves some unknowns as to how a PC-led government might approach these issues differently from its Liberal predecessors. Among other things, Kathleen Wynne’s government expanded rent control, imposed a speculation tax on foreign home buyers and overhauled the appeal process for land-use planning disputes. The rationale for Premier Ford’s abandoned plans to make some of the province’s protected lands available for development was to fuel the supply of affordable housing, as Matheson pointed out. Premier Ford could find other ways to fulfill this objective. Panelists zeroed in on his pledge to cut red tape, suggesting that he might aim his scissors at the cumbersome approval processes that can drag out how long it takes to bring homes to market. But questions remain. Is redrawing the boundaries of the Greenbelt really off the table? Will the OMB-replacing Bill 139 be rolled back? Will the land transfer tax be lowered or scrapped? The answers, respectively, are yes, no and maybe, according to the predictions of some of the panelists at the recent ULI Toronto event dubbed Post Election: The New Development Landscape.

Mausberg, “so if I may make a prediction, I would say that, certainly in the first mandate, that a Ford government will not touch the Greenbelt and will leave it as is.” With loosening the Greenbelt seemingly shelved as an option for stimulating the supply of affordable housing in the short term, Premier Ford could alternatively look at greasing the development pipeline by finding ways to expedite the approvals process for planning applications. “We all know that the longer it’s going to take you to get through an approvals process, the more challenging it’s going to be for you to follow through with that project if you’re trying to build affordable housing or that missing-middle piece,” said Emma West, partner at the community planning firm Bousfields Inc. This is one area where Premier Ford will have an opportunity to deliver on his vow to cut red tape. “On the intensification front, partly what he and others have been talking about is this red tape challenge — it’s cutting the red tape, getting the supply in more quickly,” observed Marcy Burchfield, executive director of Neptis Foundation, which conducts non-partisan research on urban regions. “Part of doing that is really the preapprovals — pre-zoning — of certain densities that fit within the current policies, that would cut some of the appeals process perhaps and streamline some of the housing to come on board more quickly.”

Greenbelt likely to be preserved — for now Burkhard Mausberg, CEO of Grow Ontario Together, a collaboration of agricultural organizations, said he expects to see Premier Ford make good on his promise to preserve the Greenbelt — for now at least. Premier Ford backtracked on plans to open up some of the protected lands to housing development in response to public outcry during the election campaign. Mausberg said doing another about-face on this issue would undercut Premier Ford’s claim of listening to the people. “What he recognized was — as he said, the people had spoken — is that the Greenbelt is near and dear to Ontarians,” said

OMB-replacing Bill 139 unlikely to be undone Before the outgoing Liberal government was defeated in the provincial election, it set in motion plans to replace the Ontario Municipal Board (OMB). Bill 139, the Building Better Communities and Conserving Watersheds Act, paved the way for the establishment of the Local Planning Appeal Tribunal, among other things, when the legislation was passed late last year. The overhaul of the appeal process was branded as one that would empower communities, in an apparent response to the criticisms leveled against the OMB that it frequently favoured developers and overturned local decisions made by elected representatives.

30 CONDOBUSINESS | Part of the REMI Network


TorontoDecorating_Condo_November_2016_FINAL.pdf

1

2016-11-10

“I think there are a lot of people who are hopeful that the Conservatives will roll back Bill 139,” said Mark Noskiewicz, partner at Goodmans LLP. “I just don’t see that happening. First of all, it’s too early to tell whether the changes introduced by Bill 139 will be as catastrophic as some think.” “I think people generally believe Bill 139 has swung the pendulum, giving municipalities more leverage in the approvals process than developers have,” he added, “but interestingly, the province has really retained all of its powers under the Planning Act.” For one, he said, the province has approval authority over the C conformity exercises whereby municipalities align their official plans with provincial plans and for which there are no rights of appeal underM Bill 139 as long as a decision is made within a set timeframe. He citedY an amendment proposed for midtown Toronto as something theCM province could potentially alter if it so chose. MY “As an example, in the Yonge-Eglinton area, there are concerns that the city has kept densities around major transit station areas too low,CY so it will be interesting to see what the province does with that,” saidCMY Noskiewicz. K Calls for more housing supply likely to be heard David Wilkes, president and CEO of BILD, said the building industry and land development association will be drawing the PC government’s attention to issues such as the red tape that ties up housing supply and the fees and taxes faced by home buyers, citing the recent finding of an Altus Group study that government charges account for close to onequarter of the cost of a new home. Cherise Burda, executive director of Ryerson City Building Institute, predicted that Premier Ford is likelier to lower the provincial land transfer tax and/or rescind the right of municipalities to levy a land transfer tax than he is to abolish the speculation tax imposed on foreign home buyers by the previous government. She pointed out that since Premier Ford floated the idea of nixing the 15-per-cent surcharge earlier this year, a poll has shown that a majority of Ontario voters support the speculation tax. “I do think on the supply side that the new government will listen to the strong lobby to get more supply in the market,” said Burda. “The question is: Will a ripping of tape or streamlining of approvals or other policies be targeted toward building the right supply in the right places, or will it just be build everything everywhere, as much as we can?” Burda indicated that one measure of this will be whether the policies improve the cost-effectiveness of building medium-density options that are proximate to jobs, schools and transit and have the potential to bridge the current gap between housing type and location preferences. “We have 100,000 condo units coming down the pipeline — it’s the most ever on record in the GTA — but the majority of them are one-bedrooms in high-rises and mostly sold to investors before the shovel hits the ground,” said Burda. “I know a lot of people still want to live in detached houses and those are being built in fewer amounts, but most of that is occurring farther and farther away in the greenfield, so it’s becoming more distant to get a home. It’s not where people want to live.” Will expert predictions come true? Whether these predictions for the new PC government’s approach to housing and planning will pan out remains to be seen. In the meantime, Premier Ford has named his cabinet, making Steve Clark, MPP for Leeds-Grenville, his minister of municipal affairs and housing. 1

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2016-06-24 8:59 AM


FEATURE

10 things prospective purchasers should consider before buying a condo Purchasing real estate can be an anxious, stressful, and confusing process.

BY JEFF LACK

Condominiums, with their extra rules, fees, and structures, can be an even

more intimidating proposition. But it benefits the prospective buyer as well as the condo board and property manager when the prospective buyer takes the time to educate themselves on the community they’re considering joining. This helps to ensure the buyer finds a home that meets their needs and there is an understanding of the expected rules and fees associated with their new home. Neither the buyer nor the property manager will be happy about having to address a situation in which, for example, the buyer learns only after closing on their purchase that their beloved 100-pound dog is not permitted under the rules. Here are 10 things prospective buyers should consider when purchasing a condo:

1

Know what types of condos are available There are different kinds of condos in Ontario. For example, a “standard” condo will cover more maintenance items than a “common element” condo, but will likely have higher common element fees. What about building structure? Not every condo is a high-rise apartment building. There are also freehold, townhome and low-rise condos.

2

Understand the costs Moving into a condo can come with great benefits, from security services and recreation facilities to maintenance items such as repairs and landscaping service, but there is an associated cost to this by way of monthly common element fees (also commonly known as condo fees). These fees vary widely from condo to condo, from a couple of hundred dollars a month to a thousand dollars or more. Unlike mortgages — which are eventually paid off — common element fees are ongoing for the life of the property ownership.

3

Consider inflationary pressures Mortgage payments can be fixed for a time period such as a five-year fixed-rate term to make it easier to budget cash flows; however, common element fees remain variable. The extent of corporation coverage varies depending on the specific wording within the property’s declaration, but condo fees cover maintenance and repair of the common elements, and the many contractual services (plus reserve fund contributions — more on that later) that are required at a condo. As the cost of these items rise, so too will common element fees as part of the annual budget.

32 CONDOBUSINESS | Part of the REMI Network

4

Consider the benefits On the plus side, those condo fees are shared amongst all owners, so it is possible that prospective buyers may be able to get additional features in a condo that they simply couldn’t afford in a single-family home. Maybe a prospective buyer really wants a pool but wouldn’t be able to afford that in a house — a condo with a shared pool in a recreation centre may be the answer. Also, some condo features can help owners save money in other areas of life — do they really need to pay for a separate gym membership if their condo has a workout room? Who needs to buy a snowblower when the building has underground parking?

5

Know the rules before buying Condos have been referred to as the fourth level of government (behind federal, provincial and municipal), and like other governments, there are rules, such as the aforementioned pet restriction that exists at some condos. It is important to understand the rules fully before prospective buyers move in. For example, the prospective buyer should take into account the number of vehicles they own; many owners have a misconception that they can use the visitor parking spaces for their own personal use — this is not the case. Owner vehicles can be parked in their designated spaces only and many properties have clamped down on owners who insist on parking their vehicles in guest parking areas by enlisting the assistance of parking control services.


6

What is a reserve fund? The short answer is: a savings fund for future major repairs and replacements. All Ontario condos are required to have a reserve fund account, which owners are required to contribute to as part of their monthly common element fees. The more important question to ask before buying a condominium is whether the reserve fund is adequately funded. This is where prospective buyers should enlist expert advice in helping to make their decision (i.e. a real estate agent and a lawyer who specialize in condo properties).

7

Are extra expenses anticipated? Condo corporations are not-for-profit entities in Ontario, which means they generally operate on a very lean budget — they typically have minimal cash for day-to-day operations outside the reserve fund. If major unanticipated expenses occur, there is only one main source of income for the corporation — the owners. Luckily for prospective purchasers, corporations must disclose any potential special assessments (fees charged over and above monthly common element fees) in a status certificate, which is a document all buyers should obtain prior to closing the deal.

8

The status certificate In addition to potential special assessments, the status certificate will outline a myriad of other items of interest to prospective purchasers, including any litigation that the corporation may be involved in, and whether the fees for the specific unit being purchased are paid up-to-date. Arrears of condo fees are attached to the real estate unit, not the owner, so any unpaid fees transfer to the new owner with the real estate sale.

9

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If purchasing as an investment, know what can (and can’t) be done Many condos are now adding restrictions on what a property can, and can’t, be used for. Residential condos generally cannot be used for commercial purposes (this is not new), even if that is something as simple as a home office. However, many have now added restrictions specifically related to short-term rental arrangements.

10

Obtain professional advice For many, buying real estate is the single largest purchase they will ever make – prospective buyers can protect themselves by ensuring they are fully informed of all the relevant facts before closing on the purchase, including obtaining a status certificate and having it reviewed in depth by a lawyer. While it may not be the board or property manager’s responsibility to educate buyers, they are obligated to do their part to facilitate this by fulfilling their duties around status certificates, such as conveying anticipated extra expenses, including relevant governing documents and providing the status certificate in a timely fashion. These considerations should help prospective buyers to find a condo that meets their needs and, if they do make a purchase, to avoid any frustrations with their fellow owners or property management upon closing. 1 Jeff Lack, BAcc, CPA, CGA, is director of internal operations at Wilson, Blanchard Management Inc.

2017-08-02 3:38 PM

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REGULATIONS

A blind spot in new EV charging station rules? New rules for steering the installation of electric vehicle charging stations at

BY MICHELLE ERVIN

Ontario condo properties may have a blind spot. As the provincial government this spring rolled out regulations designed to support condo owners who want to swap gas-fueled vehicles for electricity-powered vehicles, condo sector professionals suggested electrical capacity could in some cases continue to impede the introduction of this infrastructure at certain sites. The new rules relax Condominium Act requirements tied to making changes to the common elements that would otherwise have to be satisfied for electric vehicle charging station installations to proceed. At a press conference to announce the regulations, then Minister of Government and Consumer Services Tracy MacCharles said the move came as part of the province’s Climate Change Action Plan and followed consultations on how best to facilitate the installation of electric vehicle charging stations at condo properties. “Condo owners have indicated to us they face significant challenges in seeking condo board approval to install electric vehicle charging systems on condo premises and frustration with the inability to obtain a condo board approval for installation,” said MacCharles. After conducting in-person consultations with key stakeholders and reviewing more than 600 submissions, the Ministry of Government and Consumer Services adopted two out of the five regulatory proposals it put forward for public feedback last fall. The new rules will essentially limit the ability of boards to reject owner applications to install electric vehicle charging stations as well as restrict the ability of owners to challenge board plans to do the same. “Part of the problems that we’ve been dealing with is that for condo corporations that want to install it, depending on the cost, it would fall under the section 97 notice to owners,” said condo lawyer Denise Lash. “With these new regulations, it will now be easier for boards of directors to have these stations installed at their discretion, and there won’t be that cumbersome process.” Boards will still have to notify owners of plans to install electric vehicle charging stations, but owners won’t have the 30 days they are generally given to object to proposed changes to the common elements by forcing a meeting of owners where this type of proposal can be voted down. The only prerequisites for taking this route are that the costs of installation can’t add up to more than 10 per cent of

34 CONDOBUSINESS | Part of the REMI Network

the corporation’s operating budget and the installation itself can’t be foreseen by the board to measurably diminish owners’ enjoyment and use of the property. Similarly, owners who make applications to install electric vehicle charging stations that satisfy these and several other requirements can expect to receive approval from their condo board. “There will be certain provisions in the regulations that will deal with what a board can look at in order to determine whether or not to permit the electric vehicle station, so they can’t just arbitrarily refuse it,” said Lash. The reasons a condo board can reject a condo owner’s application to install an electric vehicle charging station include that a professional qualified to do so has provided the opinion that it would conflict with electrical safety legislation or pose a serious risk of damaging the property or harming its residents. However, Lash said she’s been told a condo property can only accommodate so many electric vehicle charging stations — an issue echoed by Rob Detta Colli, manager of energy and sustainability at Crossbridge Condominium Services. “From the electric vehicle owner’s perspective, I think it’s loud and clear that they will only accept a charger in their own spot,” said Detta Colli. “They do not want to move their vehicle back and forth.” “From the condo management perspective, and from the board’s perspective, that leads them down a road where you know you can honour the first request, the second request, maybe the fifth request, but the sixth person you’re going to have to say no to.” Electrical capacity varies from building to building based on a variety of factors, including design and location. Detta Colli pointed to inadequate space in a building’s mechanical room for new infrastructure as well as a lack of capacity at the transformer station supplying the building’s electricity as some of the constraints. The new rules give condo boards some flexibility to ask owners to make changes to their proposed installation, which may indirectly provide options in cases where electrical capacity is a concern. Detta Colli explained that if it’s not possible to accommodate a charging station at a condo owner’s parking space, the condo board could


REGULATIONS

suggest relocating the proposed installation to a visitors’ parking space, as an example. Crossbridge Condominium Services will be encouraging its clients to have the electrical capacity of their properties assessed so they have that information handy when they start fielding requests from owners under the new rules (see sidebar: A closer look at electrical capacity). Condo boards will be obligated to supply condo owners with the details needed to complete their written applications, which boards will have to respond to within 60 days. Condo boards that take the initiative to install electric vehicle charging stations that meet the prerequisites for using this expedited process will similarly be able to proceed 60 days after notifying owners of their plans. Once a condo board has approved an owner’s application to install an electric vehicle charging station, the parties will have another 90 days to hash out an agreement which addresses who

A CLOSER LOOK AT ELECTRICAL CAPACITY

Condo boards can’t just say no to requests to install charging stations for electric vehicles under recent regulatory changes. Now what? BY MARK MARMER

The arrival of the Tesla Model 3 and the new changes regarding electric vehicles (EVs) in the Ontario Condominium Act have combined to create a perfect storm. Condo managers and board members have a variety of questions and concerns about accommodating these EVs — and their charging needs — in their buildings. Often, one of the first questions is: “How many EVs can our electrical service support?” This is an essential inquiry. How can a condo corporation implement an EV policy if it doesn’t know the total number of chargers that it can accommodate? The answer involves two parts: • How much spare capacity is there in the corporation’s electrical system? • How can the corporation use technology to install as many chargers as possible at the lowest possible cost? A load evaluation compares the size of the existing service to the consumption over the previous year. A full year of data is needed to determine periods of peak demand. This information is very important, as the scope of a service to a site is finite due to constraints including the physical size of the electrical room(s).

is responsible for costs, insurance and maintenance (owners are expected to absorb installation costs unless otherwise negotiated). Condo boards and owners who fail to come to an agreement could find themselves headed to mandatory mediation and arbitration, a costly process which Detta Colli said some condo managers worry owners may be eager to trigger. Despite some outstanding obstacles, he said he sees the potential for the new rules to make it easier to install electric vehicle charging stations at condo properties by introducing a defined, step-by-step process for dealing with applications. S p e a k i n g a t t h e p r e s s c o n fe r e n c e , M a c C h a r l e s acknowledged some of the other, sweeping changes to Ontario’s condo laws that have started to roll out, which include mandatory licensing for condo managers and training for condo directors. 1

Since the incoming service size is limited, it is best to employ a system that will allow the corporation to install as many EV chargers as possible. The Electrical Safety Authority considers an EV charger to be a continuous load with a demand factor of 100 per cent. In layman’s terms, this means that it could be possible for all of the chargers to operate at one time, and that the service feeding those chargers must large enough to handle that eventuality. In reality, it’s unlikely that all the chargers will be in use simultaneously. Even if they were, it may be possible to arrange the supply to allow for an adequate overnight charge for all the users. Section 86-300 (2) and (3) of the Ontario Electrical Safety Code allows for the use of power-sharing. This could greatly reduce the infrastructure costs needed to feed these chargers and allow for at least double the number of chargers on a specific panel. The chart below demonstrates the use of a 2:1 power- sharing ratio. Adding electrical infrastructure can be expensive. Using fully managed chargers that include power-management software allows buildings to install more EV charging stations, intelligently share existing power among them, and avoid costly upgrades. Power management is only one factor in a fully managed system. Other factors include billing, wait lists, notifications, and more. Once a condo corporation understands how many EVs its electrical service can accommodate, it can set about forming an EV charging policy that will be the right fit for its property. Mark Marmer is founder and owner of Signature Electric.

Max number of chargers Panel Size

Individual breaker size

With no Power Management

Individual breaker size

3 phase 225 amps

40

9

18

3 phase 400 amps

40

15

30

3 phase 800 amps

40

33

66

www.REMInetwork.com | July/August 2018 35


Recreational cannabis use to become legal this fall Is it time for condo boards and property

managers to brace for reefer madness? It may

BY MICHELLE ERVIN

depend on which condo lawyer they ask. Many condo boards in Ontario are hurrying to ban pot in their buildings before recreational cannabis becomes legal in Canada on Oct. 17. Shawn Pulver, partner at Macdonald Sager Manis LLP, says, in the absence of opposition, passing a rule is a low-risk way to set expectations ahead of the rollout of federal and provincial laws that will converge to make it permissible to spark up in apartment units and on balconies. But is yet another rule needed to address the potential side effects of the legalization of recreational cannabis, such as pungent odour and smoke migration? Robert Mullin, partner at SV Law, points out that between the Condominium Act and their governing documents, condo corporations have a number of tools at the ready to deal with

nuisance complaints and safety concerns, including charge backs, dangerous activity prohibitions, non-interference clauses and suite entry rights. These different approaches were among the range of options presented to condo boards and property managers in the recent CAI Canada seminar Waiting in the Weeds … Everything You Need to Know About Marijuana and Condos. What the laws say Recently passed federal legislation will allow Canadians of the minimum age — in Ontario, 19 — to buy and possess up to 30 grams of cannabis for personal use starting this fall as well as grow up to four plants per household for the same purpose.

36 CONDOBUSINESS | Part of the REMI Network

Accompanying provincial legislation will add another layer of jurisdiction-specific rules, including provisions governing where cannabis can be consumed. Public and workplaces are among the areas that will be off-limits to activities such as pot-smoking. “Cannabis consumption can be thought of as an expansion of the rules for alcohol in the Liquor Licence Act, so where you can’t drink, you can’t smoke,” said Det. Sgt. Tony Melaragni, Peel Regional Police. However, Det. Sgt. Melaragni added, this handy point of reference won’t apply in all cases. Take, for example, he said, patients who are authorized to use marijuana for medical purposes, which has been legal in Canada since 2001. This is the kind of scenario where the duty to


REGULATION

accommodate may come into play, as the condo lawyers discussed, imposing on condo corporations the obligation to work with residents who have a demonstrated need to find a solution that doesn’t negatively impact their neighbours. Considering the community Many communities have likely had some exposure to cannabis use, whether it’s the legal medical kind or the currently illegal recreational variety. One of the unknowns facing condo corporations is whether the coming legalization will change the status quo. C ondo law yer Mullin encouraged condo boards to take the temperature of their community, whether that’s through an owners meeting or survey. He also said communication and education could be potentially potent tools in addressing recreational cannabis use in condos. “Did you know that you’re in a highdensity condo? Did you know that if you leave your windows open while you smoke it might go into your neighbour’s unit?” Mullin offered by way of example. Mullin said that if there’s no call for action on recreational cannabis, the corporation may want to postpone intervention, instead reviewing the issue every month at board meetings and in manager reports, watching out for increases in complaints. If there is a call for action on recreational cannabis, he recommended taking a measured approach, looking at passing a rule before amending the declaration. Rules can be passed within 30 days if no owners object, but they also have to be reasonable. Time will tell whether cannabis prohibitions will meet this test if subject to a court challenge. “Let’s say you do pass that rule prohibiting cannabis in units, and you get that,” Mullin added. “Be careful what you wish for, because now the enforcement is going to be upon you.” Rules can become unenforceable if they are not enforced consistently. The alternative to passing a rule, amending the declaration, is less prone to court challenge, because it doesn’t need to be reasonable, but it also requires more support from unit owners. The condo lawyer cautioned that efforts to prohibit pot this way could backfire if the board fails to capture the affirmative votes of at least 80 per cent of owners and ultimately reinforces the

forthcoming rights of residents to consume recreational cannabis. Production and distribution Rather than legitimize Ontario’s many illicit dispensaries, the outgoing provincial Liberals set in motion plans at Queen’s Park to restrict the sale of recreational cannabis to government-run retail outlets similar to the LCBO. Whether Premier Doug Ford might change course remains to be seen. Even if procuring recreational cannabis is as easy as going to the Ontario Cannabis Store, some people, including condo residents, will want to grow their own product. The decision to go DIY could stem from a desire to avoid higher retail prices or to take it up as a craft hobby, obser ved Max Z avet, co -founder of Emblem Cannabis, a licenced producer of medical cannabis. Whereas a commercial operation such as Emblem’s is run from a high-security facility equipped with expensive HVAC and irrigation systems that work to prevent mould, mildew and pests, a home-grow operation in a condo might consist of little more than a plant, small fan and tent, said Zavet. He also noted that the odour from a single plant has the potential to permeate multiple floors in apartment buildings. “Four weeks after you see a seedling, you’re going to start smelling the plant,” said Zavet. “On top of that, if somebody has done something to the electricity to circumvent electricity costs or to get more amp-age out

of their unit, that could obviously cause fire, and flooding as well if they have some kind of irrigation system that’s jerry-rigged.” Under the current plan, the Ontario Cannabis Store will also give consumers the option of purchasing product online, which puts concierges in condos in the position of intercepting these potentially pungent packages on behalf of residents. “That’s another thing to keep in mind if your buildings are looking to take more active steps to go beyond what’s in your current rules and declaration — having language in there about the use of the marijuana, the growing of the marijuana, but also the storing and delivery of the marijuana,” said condo lawyer Pulver. Getting ahead of legalization The way Pulver sees it, establishing a rule serves to clarify how the general tools condo corporations have for addressing pot-related problems such as nuisance complaints and safety concerns specifically apply to recreational cannabis, narrowing the scope of what’s open to interpretation by the courts. Condo communities eying pot bans may want to get ahead of legalization on Oct. 17 in order to head off requests from residents to be grandfathered (i.e. exempted) from retroactive rules. “If a building decides they don’t want it, and they pass a rule, and it’s not objected, the timing shouldn’t be critical, but it would be better to do it before if they plan on it,” said Pulver. 1

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NEW MANAGEMENT AND NOTABLE

T.O.’s first smoke-free condo building Recently launched development aims to promote family-friendly environment by limiting cannabis and tobacco consumption to harm-reducing vapourizers

This summer, non-profit developer Options for Homes is launching its latest development, The Humber, bringing Toronto’s first smoke-free condo building to market that will limit the consumption of tobacco and cannabis to vapourizers. The aim of the smoke-free building is to help create a predominantly family-friendly development, as research suggests that the use of vapourizers over smoking is an effective harm-reduction strategy. It also eliminates the problem of smoke pollution, smoke transfer between suites and balcony fires in multi-unit residences. Homeowners will be able to smoke tobacco or cannabis using a vapourizer in their own suite or on their balcony. The building’s ‘smoke less’ policy will restrict smoking and vaping in any common areas of the development, including elevators, stairwells, hallways, parking garages, laundry facilities, lobbies, outdoor spaces and entertainment rooms. It will also restrict growing cannabis on balconies or in homes. 38 CONDOBUSINESS | Part of the REMI Network

“We know from surveying our potential purchasers that there’s a deep interest in smoke-free buildings. We think this idea of ‘smoke less’ speaks to people’s concern about the impact of smoking while respecting individual choice and understanding that we’re on the cusp of a major cultural shift when it comes to cannabis,” said Heather Tremain, CEO of Options for Homes, in a press release. “We feel that restricting smoking while permitting vaping strikes the right balance between the best interest of many and the personal rights of the few.” The Humber, which will be located on the banks of the Humber River at Lawrence Avenue and Weston Road, will rise 22 storeys and feature 232 suites in a mix of sizes, including five townhome-style suites, with twothirds of suites in two- and three-bedroom configurations suitable for families. Located steps from the new Weston UP Express station with service to Union Station in 15 minutes, the development will be built by Deltera. The Humber is Option for Homes’ thirteenth development in the GTA.


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