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Canada’s Most Widely Read Condominium Magazine

March 2012 • Vol. 27 #1

Raising the roof The benefits of solar panels

Avoiding condo fraud PM#40063056

Are iPads the future of leasing?


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Contents Focus: Maintenance

8

Small spaces, big challenges for healthy indoor air

10

Asbestos? Now What! By Tammy Evans

24

Sunny returns for solar panel installations By Christopher Seepe

38

features

14

Legal Condo fraud By Ray Mikkola

18

Management The benefits of CMMS By Ryan Gallimore

23

Legal Selective bylaw enforcement: Discrimination or not? By Jeff Morris

34

Technology Are iPads the future of leasing? By Richard Roos

The changing rules for fuel storage and diesel generators By Bassem Sukkar

departments

6

Publisher’s Letter

42

Smart ideas


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publisher's Letter

Publisher Steve McLinden Editor Scott Anderson

The importance of being involved We all live

busy lives and sometimes taking part in the management of your condominium takes a back seat to more pressing matters. In this issue of CondoBusiness, Ray Mikkola puts forth some key points when selecting board representatives and the importance of getting involved yourself. We trust that when you hire or elect personnel for your building that your interests as a condominium owner will be a priority. For most, owning a condominium is a big investment. Protect your investment and get involved. Ensure you ask the right questions when choosing directors, managers and board members. Attend meetings and stay informed of all board communications. Most importantly, make the effort to ensure you are fully aware of all aspects of building issues and how your elected board or management company is dealing with these issues. In an effort to provide our readers with the most current information about the condominium sector, we continue to send out our bi-monthly e-newsletter. We have re-formatted our electronic communications to combine the latest industry news and video commentary from sector experts. If you do not currently receive our newsletters, send me an email and I will ensure you are added to the list. As always, please feel free to send me your story suggestions.

Steve McLinden Publisher Email: stevem@mediaedge.ca Tel: 416-512-8186 x239

6 CONDOBUSINESS | www.condobusiness.ca

Advertising Sales Paul Murphy, Melissa Farrell, Sean Foley Senior Designer Annette Carlucci Production Manager Rachel Selbie Contributing Writers Christopher Seepe, Tammy Evans, Ray Mikkola, Richard Roos, Ryan Gallimore, Jeff Morris, Bassem Sukkar, Barbara Carss Subscription Rates

Canada: 1 year, $55*; 2 years, $100* Single Copy Sales: Canada: $10. Elsewhere: $12 USA: $80 International: $105 *Plus applicable taxes Reprints: Requests for permission to reprint any portion of this magazine should be sent to info@mediaedge.ca.

Circulation Department Lina Trunina circulation@mediaedge.ca (416) 512-8186 ext. 232 CONDOBUSINESS is published eight times a year by

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


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Maintenance

Small spaces, big challenges for healthy indoor air Canadian living spaces

smaller, posing new challenges

new innovations for ventilation and air quality.

8 CONDOBUSINESS | www.condobusiness.ca

are getting and encouraging

W h e t h e r i t ’s h i g h r e a l e s t a t e pr ic es, a d esire for env ironment al sustainability, retiring baby boomers seeking more manageable spaces, or new Canadians for whom small spaces are more the norm, construction of condos and multi-residential spaces is expected to be on the rise. While a smaller household footprint is g o o d fo r a num b er of re as o ns , e n s u r i n g c l e a n a i r i s i n c re a s i n g l y impor tant and a new challenge for indoor air quality professionals. “People tend to want to do all the same things in a small space that they do in a larger one, meaning we’re get ting the same IAQ impacts only crammed into a smaller space. In a


Maintenance

result is poorer air for those living in condos. He says the best builders are following a suite - by - suite ap pro ach by systematically addressing the IAQ impact on each suite, rather than the entire building, builders can improve IAQ for all residents, often at a lower cost.

This has created a market for smaller, quieter heat recover y ventilators a c c o r d i n g t o C h r i s t o p h e r B e n d e r, product manager, Indoor Air Quality, at Venmar Ventilation. “ We’re seeing a growing demand from both dealers and homeowners for sophisticated solutions for small spaces.” 1

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condo, these activities are being carried out closer to neighbours, fur ther i n c r e a s i n g t h e I A Q i m p a c t ,” s a i d Gord Cooke, a well - known C anadian engineer and indoor air quality consultant to the HVAC industry. C o oke s ays some sp ecific issues p revent sin g le d wellin g te c hni ques from being directly applied to condos. Multi - unit buildings place a premium on space. Traditional HVAC units take up too much room, move too much air and create too much noise. Builders must also consider other highrise s p e c i fic p res sure is sues rel ate d to s t a c k in g an d w in d . C o m b ine these challenges with the traditional ‘whole b u i l d i n g ’ a p p ro a c h to I AQ a n d t h e

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(416) 661-1981 We set the industry standard, others try to follow March 2012 9


Maintenance

Asbestos? Now What! “There is asbestos in

your building.”

This is a statement that property managers don’t want to hear. Most of the fear comes from a lack of information and understanding regarding the risks. Asbestos is dangerous, but only if handled incorrectly. The main issue with asbestos particles is that they can split into thin needle like fibres along their length. These fibres are very small, light, float in the air, and can be easily inhaled and settle in your lungs.

By Tammy Evans

Over time and exposure, they can cause a myriad of health problems such as Asbestosis, Mesothelioma and lung cancer. Products that contain asbestos are broken down into two classes: friable and nonfriable. Friable materials are those that are easily crumbled or loose in composition such as spray-fireproofing. Non-friable materials are ones that are more durable, held together by a binder such as cement, vinyl or asphalt making them difficult to crumble into dust. Fortunately, there are very specific provincial regulations regarding the handling of asbestos containing material (ACM) during construction. So you have asbestos in your building. Now what? The first step is to have a complete assessment and report regarding all construction material used in the building. Asbestos was banned from use in construction material around 1986. During its time of use, asbestos could be found in drywall compound, ceiling tiles, floor tiles, and pipe insulation. Now, when work is undertaken, a property manager must report to any tradesperson working in the building if ACMs are present. It is not the contractor’s responsibility to find out about ACMs, rather it is the property manager’s or board of directors’ responsibility to inform. Therefore, depending on the proposed work to be done, a complete assessment and report will help categorize the project as a Type 1, 2 or 3. These types represent low, medium and high risk work. The Ministry of Labour, through the Occupational Health and Safety Act 1, set the standard for determining the classification of an asbestos operation. General classifications are: Type 1 – small scale operations (determined by size of area affected and length of exposure time) including installing or removing materials containing non-friable ACMs, where materials will not be broken, cut or drilled. If materials will be broken, cut or drilled, non-powered hand-held tools must be used and materials must be wetted to control the spread of dust and fibres. An example of this is the removal of floor tiles without breaking, cutting or drilling them.

10 CONDOBUSINESS | www.condobusiness.ca


Maintenance

Type 2 – small/medium scale operations (determined by size of area affected and length of exposure time) including installing or removing materials containing non-friable or friable ACMs. Some work may include breaking, cutting and drilling materials with powered tools with HEPA filter attachments. An example of this would be removing a false ceiling where ACMs are lying on the surface of the ceiling and will be easily disbursed into the air. Type 3 – medium/large scale operations (determined by size of area affected and length of exposure time) including installing or removing materials containing friable and sometimes non-friable ACMs where breaking, cutting and drilling will release dust and fibres into the air. Examples would include major removals and/or demolition of buildings, machinery and equipment containing ACMs. A case study - YCC 87, 60 Southport, Toronto This past year, CPL condominium design interiors was contracted to complete a corridor refurbishment at YCC 87, 60 Southport. The assessment for this building identified ACMs throughout the building—specific to this project, the drywall compound on the walls. Asbestos was used in the drywall compound as a binding agent and to add some additional fire resistance. CPL determined that the removal of the existing wallcovering would disturb the drywall compound and potentially cause the asbestos to become airborne. The assessment designated that this project would fall within the parameters of a Type 1 classification as outlined by the Occupational Health and Safety Act: Type 1 : • Installing or removing non -friable containing material, other than ceiling tiles, without it being broken, cut drilled, abraded, ground, sanded or vibrated. • Breaking, cutting, drilling, abrading, grinding or vibrating non-friable asbestoscontaining material if a) you wet the material, and b) you use only non-powered hand-held tools As a Type 1 classification, and as mandated by the Ministry of Labour, this abatement would require that all the tradespeople working on site that could be involved with the removal process would need to be properly trained and certified in

the dangers and proper handling of ACMs. The training also involved the acquisition of and training in the use of appropriate respirators with filters and disposable Tyvek suits for any person who would be working within the designated space. When undertaking a Type 1 Asbestos abatement certain controls must be instituted in order to protect the worker and anyone in the area of the work. The controls 7/31/07 as outlinedDBS_Aug07_SOLISCO.pdf in the Occupation Health and Safety Act are:

• Eating, smoking, drinking and gum chewing are prohibited in the work area. • A respirator or protective clothing is not required for Type 1 operations but they may be requested by a worker. If a respirator or protective clothing i s re q u i re d , t h e re s p i r a to r m u s t be the proper t ype with filters for asbestos. Protective clothing must be impervious to asbestos fibres in order 12:41:42 PM to prevent the transfer of waste and dust into clean areas.

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Maintenance

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• A HEPA filtered vacuum is to be used to clean the area before and after the work. • In order to control dust in the work areas a wetting agent must be used. A wetting agent such as amended water can get into various nooks and crannies to prevent dust from entering the air. • A minimum 6 mil plastic must be laid out as a drop sheet. In addition, the training was used not only to certify the workers but also the supervisors and owners of CPL to ensure that everyone fully understood the proper handling of the ACMs and how to manage the project in a fully occupied building. This training now certifies CPL to handle a Type 1 & Type 2 asbestos abatement project. After the training, the key to this project was communication. All residents were kept fully informed, not only as to the progress of the project but even more importantly the safety precautions being taken. Notices were posted in the lobby, the elevator and at each suite door. These notices outlined what was required of the residents and time frames that residents on each floor would be affected. During the removal process air makeup units, on a floor by floor basis, were shutdown. Residents were required to remain either in or out of their suite while work was being done on their floor. Each suite and fire exit was sealed off with plastic sheeting and the carpeting was also sealed with the same plastic. Each floor had the existing vinyl wallcovering removed within this sealed space by fully trained and outfitted trades. Amended water spray was used to eliminate the possibility of any drywall compound becoming airborne. Once the vinyl wallcovering was removed, each piece was rolled up and placed in a designated hazardous waste disposal bag. Upon completion of the removal, the hazardous waste disposal bags were double bagged to ensure there would be no spilled contaminants. The plastic sheeting used to seal the doors and floor

12 CONDOBUSINESS | www.condobusiness.ca Untitled-2 1 11080_BradleyMechanical_WilsonBlanchard_2011.indd 1

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Maintenance

“When undertaking a Type 1

Asbestos abatement, certain controls must be instituted in order to protect the worker and anyone in the area of the work� CARMA_CondoBusiness_01-19-2009_CS2--F.pdf

2/3/09

5:41:35 PM

were wiped down using damp rags, removed and double bagged in the same hazardous waste disposal bags. Trades also removed their Tyvek coveralls on a daily basis and included them with the other hazardous materials for disposal. Even though the floors were fully covered with plastic, each day the carpet was vacuumed with a specialized HEPA filter vacuum. All hazardous waste disposal bags were then transported through the building in closed containers and deposited into a special enclosed bin located outside. Throughout the entire process of removing the vinyl wallcovering from the nine floors of the building, an independent air monitoring firm took air sample tests to ensure that the safety practices employed were sufficient in eliminating all possibility of asbestos becoming airborne. Each test was accompanied by a report that indicated that CPL had not only met provincial standards for air quality but had exceeded them. The owners, residents, board of directors, and management company expressed that they felt safe and secure in the knowledge that this project was carried out in a timely, professional and regulated manner. If your building has asbestos and the board is contemplating refurbishment, it is important to determine the level of abatement required. The bottom-line is if: (a) asbestos is present in an area that requires work, and (b) that work could disturb the ACM, then a properly trained tradesperson is required to perform the work and any waste must be disposed of in a regulated manner. Specialized training and specialized project management means there will be additional costs incurred to complete a project like this. As long as those costs are identified and fully disclosed before the project starts, most owners can appreciate what is required to upgrade their building. 1 March 2012 13


Legal

Condo fraud By Ray Mikkola

Details of the alleged $20+ million

condominium fraud affecting properties in Greater Toronto—both mortgage fraud and construction fraud—alleged to have been perpetrated by the president of Channel Property Management, continue to emerge in the media.

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March 2012 15


Legal

The story of the alleged condominium fraud was first reported by The Toronto Star in mid-September 2011. Police are investigating. The number of condominium corporations affected by the alleged fraud now stands at nine—and counting. The Channel Property website indicted that they managed 40 properties in Greater Toronto. The truth is that this type of fraud and mismanagement could have taken place at almost any condominium corporation in Ontario. The results so far have been alarming and serious for the owners of the affected condominiums. Certainly, it will be very difficult to sell any of these units, at least not for what would have passed for the “fair market price� which these units could have commanded a short time ago. Banks are likely unwilling to lend on the security of these units.

This may become the lasting legacy of this story: hundreds of unit owners struggling for many years with very high common expenses, in condominium developments which have been publicly tarnished by the story, and each proposed purchaser and lender being reminded of the burden of this misadventure by clearly set out provisions in status certificates signed by the victim condominium corporations. How can condominium managers help unit owners to take steps to avoid this fate? Communicating proactively now to unit owners and residents can make fraud and mismanagement less likely to occur in their condominium communities. While fraud cannot be avoided altogether, here are five steps that condominium managers can encourage unit owners to take right now. 1. E x e r c i s e y o u r v o t e c a r e f u l l y . Owners must understand that for the most part, the board is in charge. This is m an d ate d by the C o n d o minium Act. Owners are in charge of electing directors. C ast a thought ful and knowledgeable vote. Get to know the candidates who are s e ek in g yo u r vote. A sk q u e s t i o ns about their backgrounds, exper tise, and abilities. Ask for resumes. Ask them if they are w illing to at tend c ourses that d esc rib e the dut y of directors and the management and governance of condominium corporations if they are elected. Ask them to speak for a minute or two at the meeting at which they are seeking ele c tion. If the c andid ates d o not meet your standards, consider running yourself. You are, after all, looking out for your investment.

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2. C o n s i d e r p ay i n g yo u r d i r e c to r s . Being a director is an important and re s p o n s i b l e j o b . I t i s n ot r u b b e rstamping. Select the most qualified directors you can find. Governance and oversight are key parts of the job. A s a practic al mat ter, it would not be possible for owners to have any direct role in managing the day-to-day operations of a condominium. 3. Ask the board to is sue a regular new s le t te r. You may wish to stay

16 CONDOBUSINESS | www.condobusiness.ca


Legal

“Knowledgeable, involved, and engaged

owners are more likely to elect like directors … they are much less likely to become the victims of fraud and mismanagement” abreast of issues by at tending board meetings, or asking that non - legal, i n fo r m a t i o n m e e t i n g s t a ke p l a c e to keep owners and residents abreast of new developments at the condominium. Talk to directors to advise them of your ideas and concerns. Stay involved. Just because you are not on the board does not mean that you have no interest in the conduct of your condominium corporation’s affairs. 4. If you have concerns about how your condominium is being run, speak to t h e board. Review the condominium’s records—you are entitled to have your condominium cor p oration operate as an “open book,” with few exceptions. If you lose confidence in the board, you are entitled to call a meeting to remove one or more of the directors if at least 15 per cent of your fellow unit owners feel the same way. A majority of the owners may vote to remove one or more directors at that meeting. This is more power than is given to voters following most other elections. 5. Finally, review and become familiar with your condominium corporation’s documents: the declaration, by-laws and rules, and the Condominium Act. They all impact on the enjoyment of your home and the value of your investment. Knowledgeable, involved, and engaged o w n e r s a r e m o r e l i ke l y t o e l e c t l i ke directors. In my view, they are much less likely to become the victims of fraud and mismanagement. 1 Ray Mikkola specializes in condominium law and is a partner in the Commercial Real Estate Practice at Pallett Valo LLP, Mississauga’s largest business law firm. He can be reached at rmikkola@ pallettvalo.com or (905) 273-3022, ext 276. March 2012 17


The benefits of CMMS By Ryan Gallimore

Computer iz ed ma intena nce

management systems (CMMS)

assist property

managers in the daily co-ordination of repair efforts. With the emergence of cloud-based “Software as a service�, online CMMS have emerged allowing residents, managers, and contractors to access the software from anywhere. With this new model, residents may submit a service request quickly and easily from their desktop computer or mobile device.

18 CONDOBUSINESS | www.condobusiness.ca


The CMMS presents an online fo r m to t h e re s i d e nt to c o m p l ete, auto - assigns the work according to a pre - determined assignment list, and sends e - mail to the relevant par ties: management , ser vice provider, and resident. By delegating maintenance dispatching to the CMMS, management companies relieve the pressure o f a d m i n i s t r a t i v e t a s k s re l a te d to maintenance. The system assumes the task of collecting initial request details, job assignment and notification. As work is performed, the CMMS maintains a database of work history, which often includes a complete record of correspondence between staff and service providers, uploaded documents, images, purchase orders and invoices. By acting as an automated maintenance assistant, a CMMS improves maintenance

performance beyond the capacity of paper and spreadsheets. Managing job backlog is a critical issue for management companies. A pro-active approach ensures jobs are completed as efficiently as possible before they are lost in the flood of incoming requests. Automated request assignment dispatches jobs without delay. Quick reporting on outstanding items, easy searching and prioritization permits identification of critical issues. The result is a more sophisticated triaging process that better responds to resident needs. A building’s preventive maintenance plan works in tandem with the CMMS scheduler to guarantee key building components are maintained on a regular basis. E-mail or SMS reminders are sent out prior to scheduled work to notify trades in advance. Some solutions notify residents prior to entry into their unit.

Incomplete or inaccurate job information delays work. A contractor arrives onsite only to find the issue is much larger than anticipated. Each electronic work order in the system includes all the information required for the job to be completed. Trades need not call managers for additional information, nor are managers required to contact residents. Leveraging the data collected from maintenance requests, CMMS g e n e r a te re p o r t s su c h a s ave r a g e response and completion times, and ser vice requests by unit or common area. An analysis of these reports helps to identify and eliminate inefficiencies. With a more streamlined maintenance workflow, management companies spend less time coordinating maintenance activities. T his inc re ases the c ap acit y of the organization and allows staff to pursue March 2012 19


management

business development goals, all while reducing costs. Managers are able to do more business with existing resources. M aintenance management consumes up to 40 per cent (two full days per week) of staff time. Transferring part of this burden to a computerized system frees staff to attend to existing clients’ needs. A CMMS reduces staff costs by absorbing the role of request taker, dispatcher and communicator. M anagement ef fectively outsources these tasks to an automated system. St af f that use d to answer p hones, follow up on faxes and e - mails, maintain spreadsheets, and route these requests to ser vice providers can be used elsewhere. Online CMMS may use e-mail, SMS or MMS messaging to communicate with users. This is often done whenever the information in the service request changes. For example, if a new issue is raised or a comment is posted, an e - mail is sent to the submitter of the request, and the person assigned

to resolve the problem. T he CM MS can often generate the e-mail content instantly from a template. T his is a much cheaper and time-efficient means of informing residents than paper work ord er s th at must b e fille d ou t an d delivered individually. One condo saved $10 per unit per year by distributing AGM packages electronically. Businesses also save on paper products, postage, and filing time by communicating electronically. Utilizing ser vices that are environmentally conscious also benefit an organization’s corporate image. Operational reporting provides the board with a picture of maintenance activities and how maintenance dollars are spent. It is also an opportunity to demonstrate cost savings to the condo corporation. This is an ongoing benefit to existing clients, who can present the savings to residents. A CMMS increases board confidence in management’s ability to co-ordinate maintenance. A company offering a technological solution to maintenance coordination over paper and spreadsheets

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has a competitive advantage when approaching new clients or reinforcing relationships with existing customers. The property management industry has few barriers to entry. According to economist Bruce Greenwald, “Firms in this position… have a single strategic imperative: they need to focus relentlessly on being as efficient and effective as possible in all of their business operations.” A CMMS assists management in this goal. A technology that introduces efficiencies will put an organization in a lowbarrier market space at an advantage. Armed with an automated maintenance assistant, the property management company is a healthier organization. It has the tool, credibility, additional time and resources to better serve existing clients, reduce costs, and pursue new avenues of business. 1 Ryan Gallimore is President of Spire Software, which makes CondoHub, a maintenance management solution for condominiums. For more information see the web site at www.spiresoftware.ca.

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LEgal

Selective bylaw enforcement: Discrimination or not? By Jeff Morris

Can a condo bylaw

corporation enforce a

infraction against one owner when it has not

enforced the same infraction against others? This ver y question was addressed in the recent Ontario Court decision, D u r h a m S t a n d a r d C o n d o m i n i u m v. M o r to n . T he c o r p o r ati o n’s by - l aw s prov id e d that resid ents c ould have one pet weighing no more than 20 kilograms and a dog had to be on a leash at all times. A defaulting unit owner claimed that other residents were breaking the bylaw, including some members of the board of directors. The proper t y manager acknowledged that other owners had more than one pet, but there were no complaints about those owners. Can a condo corporation be selective when enforcing a by-law? The answer is surprisingly yes! The cour t noted that most condo corporations act reactively, rather than proactively. In this case, the board only had complaints about the one problem unit owner. The court was satisfied that the board had not acted vindictively against the owner. Complaints were received from people who were afraid of the owner’s dog jumping up towards them. Significantly, there was a danger of injury to others. Generally, a court will only step in when a board’s discretion is exercised improperly. The law is clear that the cour t ’s role is not to substitute its own opinion for that of the board of directors, but to ensure the board has acted in good faith. Even when the board is clearly acting in good faith, unit owners have challenged the selective enforcement of by-laws due to lack of fairness. Is it not discriminator y to permit some

owners to of fend a bylaw while prosecuting others? This issue was decided in another recent Ontario Cour t decision, Peel C ond ominium C or p oration N o. 10 8 v. Young. The judge noted that there had been other contraventions of the Declaration that have not resulted in enforcement proceedings by the board of directors. Justice Gray states: “On the one hand, unit owners as a group, and their representatives, the Board of Directors, have an interest, and indeed a duty, to enforce the Declaration. On the other hand, the individual unit holder who violates the Declaration has a legitimate cause for complaint where the Board of Directors has permitted other violations to occur without consequence. The task of the court is to balance these competing interests in a specific case.” The cour ts acknowledge that selective enforcement can be viewed as discriminatory. However, in the court’s view, that is not sufficient grounds to deny the board’s right to take selective

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e n fo r c e m e n t a c t i o n . J u d g e s a r e prepared to justify this on the basis that it is in the collective’s interests in having the Declaration enforced, even if some unit owners have been allowed to violate it. Does this mean any degree of discrimination is legal? Probably not, as the court in the Young case states a “m a s s i v e n o n - e n f o r c e m e n t ” i s different. My view is that this begins to look like a capricious or improper use of the board’s enforcement powers. It is clear that each case will and must be assessed on the specific fact situation at hand. But what emerges from these rec ent c our t d ecisions is a judicial view that boards are not hamstrung by their failure to enforce a bylaw when complaints are lodged against an owner, especially when a dangerous situation potentially exists. 1 Jeff Morris is a lawyer and now practices as a mediator for condominium disputes. His website is www.jeffmorrismediation.com.

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March 2012 23


cover story

Sunny retur

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24 CONDOBUSINESS | www.condobusiness.ca


cover story

urns for

anel installations By Christopher Seepe

As a condo building ages and maintenance fees rise, condo boards will increasingly be faced with the challenge of keeping those costs down and finding innovative ways to create supplemental income to mitigate large increases in their condo fees.

March 2012 25


Cover story

“Green is often a euphemism for money and condo boards faced with major capital costs are likely going to give the highest priority to the use that makes the best overall business sense, with return on investment likely being a major factor”

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Some condos were fortunate enough to b e i n a re a s w h e re i n s t a l l i n g a telecom/cell tower on the roof could g ener ate s o m e n ot a b l e an d mu c h needed annual revenue. However, the cell infrastructure is relatively mature n o w i n m a ny C a n a d i a n u r b a n a n d suburban markets. So now what? Well, the roof can offer other revenue generating opportunities, such as billboard signage perhaps, but one use that doesn’t care about frontage, retail exposure, or high traffic areas is the generation of solar energy. Any rooftop (subject to engineering concerns) can apply. Not directly related but cer tainly a point to bear in mind is that there is a battle brewing between green initiative protagonists, specifically the clan that wants trees and gardens on the rooftops versus renewable energy proponents. Each addresses important environmental concerns and each have distinctive and sometimes material, pros and cons. However, green is often a euphemism for money and condo boards faced with major capital costs are likely going to give the highest priority to the use that makes the best overall business sense, with return on investment likely being a major factor. To this end, much has been said and written about the Ontario government’s F I T ( F e e d - i n Ta r i f f ) a n d m i c r o F I T incentive programs, North America's first comprehensive, guaranteed pricing str uc ture for renewa b le ele c tr ic it y production. It offers stable prices under long-term contracts for energy generated from renewable sources, including solar photovoltaic (PV) systems. A typical microFIT project can take up to a year from start to finish even though


Cover story

“Having a profitable solar system in Ontario is directly tied to system performance, and the monthly and yearly averages for solar radiation in a given location. Accurate data on solar system performance is readily available from reliable sources” installation usually takes less than one week. Having a profitable solar system in O nt a r i o i s d i re c t l y t i e d to s y s te m p er for mance, and the monthl y and yearly averages for solar radiation in a given location. Accurate data on solar system performance is readily available from reliable sources. Generally, costs associated with the purchase and installation of renewable energy property is considered capital costs of depreciable proper t y, using capital cost allowance (CCA) in Class 4 3.1 (3 0%/ year) or 4 3.2 (5 0%/ year). These classes provide an accelerated CCA rate for specified clean energy generation equipment. T here are a numb er of var ia b les involved. T his ar ticle specifically addresses the installation of solar panels on the roof of a condominium building in southern Ontario. The positives: • O b v i o u s l y, t h e m a j o r b e n e f i t o f installing solar panels is the 20 -year income stream and full payment of the investment. • Energy/fuel costs are unlikely to ever decrease. When the utility contract expires in 20 years, the system can still be a supplemental energy source for the building, reducing operational costs. • T he solar panels act as a kind of partial second roof that can possibly lengthen the lifespan of the property’s roof. • The personal contribution to clean sustainable energy for the community and the world, and that much less reli an c e o n c o ntrover si al nu c le ar

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Cover story

“There is a battle brewing between green

initiative protagonists, specifically the clan that wants trees and gardens on the rooftops, versus renewable energy proponents”

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power or clearly undesirable fossil fuel power. • N o m o v i n g p a r t s a n d l o w maintenance make solar PV systems very reliable and long lasting. Some PV systems are still operating after 40 years. • As long as there is a sun, there is sustainable, renewable energy with very little impact to the environment. • T o d a y , s o l a r p a n e l - g e n e r a t e d electricity can’t be stored. However, w e l l b e fo re 2 0 ye a r s f r o m n o w, when one begins piping generated electricit y back into a building, technolo g y will have ad vanced to allow for on - site energ y stora g e. This could have a dramatic, positive impact on condo fees. The negatives: • The effects on the life span of solar panels exposed to extreme weather elements in southern Ontario are not yet well understood. • T h e r e ’s n o p o i n t i n o b t a i n i n g a 20 - year warrant y from a company that may be gone in five years. • Owners absolutely must determine whether the building infrastructure can carry the weight and spot loads (e.g. gusts of wind pulling on the panels, heavy snow accumulating on a much larger surface area of panels and rooftop, etc.). • Repairing the roof after a solar panel system has been installed c an be an expensive proposition. Consider installing a new roof at the same time as the solar panel installation. • T h e b u i l d i n g m u s t h a v e a d r y, covered place, not exposed to the we a t h e r e l e m e nt s , to i n s t a l l t h e l a r g e i nve r te r d ev i c e , m e a s u r i n g


Cover story

“While there are definite pros and some cons,

or at least notable considerations, to the investment in solar photovoltaic systems, the overall and longterm benefits are very attractive” perhaps 6’ high x 6’ long x 2’ deep. • M ake cer t ain the rack ing system that is affixed to the roof is properly installed and doesn’t create water and stress - related (wind, storms, etc.) problems later on. Be certain, for example, that bolts that breach flat roof membranes are hermetically se ale d . P ro p onent s m ay s ay this is overk ill, however, there is not enough statistical evidence to know the full truth of it. Better still, try to find a racking system that doesn’t require it to be bolted down onto the ro of; may be it c an be simply weighted down. • Make cer tain insurance will cover a l l d a m a g e s; fo r ex a m p l e , h i g h force winds tear panels off the roof and damage, not only the existing pro p er t y, but someone else’s (or they injure someone). • Like all technologies, solar panels are constantly improving. It is possible that panels in five years will be much more efficient. It would be great to know that solar panels could be replaced by more efficient ones without replacing the racking system that holds them in place (this is a tall order but still worth asking). • I f the entire p ro p er t y w as to b e s o l d ( u n l i ke l y w i t h a r e s i d e n t i a l c ondo building but perhaps more likely with a large commercial/office/ industrial condo), a reasonable por tion of the sale price must be allocated as proceeds of disposition of the renewable energy proper t y and rep or te d to C anad a Revenue Agency (CRA), which may result in a recapture into income of any CCA claimed on the property. (Continued on page 32)

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Indoorstory Cover Air quality

Drummond Report condemns electricity rebate By Barbara Carss The recently released report of the Commission on the Reform of Ontario’s Public Services includes several recommendations related to electricity provision and costs, including a proposal to reduce the prices now offered through Feed-in Tariff (FIT) contracts. For the broader condominium sector, however, the call for immediate cancellation of the Ontario Clean Energy Benefit (OCEB) would have a greater financial impact. JermarkHRISE_Condo_Apr09.pdf

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Residential customers participating in Ontario’s Regulated Price Plan (RPP) have been promised the 10 per cent reduction on their electricity bills until the end of 2015. The Drummond Commission – thus named for the commission’s chairman, Don Drummond – notes this will cost the provincial government approximately $1.1 billion in the 2011-12 budget year alone. “The commission strongly believes there are more effective uses for the over $1 billion per year spent on this initiative,” the report suggested. “The commission would be satisfied with a gradual phase-out of the OCEB. However, a more aggressive timeline or an immediate cease to the program would be welcomed.” The commission also calls for a review of four other energy tax credits/rebates for low-income ratepayers and residential and industrial ratepayers in northern Ontario. “Each of these initiatives may offer relief to consumers in terms of energy costs (electricity, gas, oil, diesel etc.), but over time could discourage conservation, leading to higher costs, and should periodically be revisited to ensure they are meeting policy goals and represent value for money,” the report stated. Meanwhile, conservation proponents concur with the commission that a wider variance is needed between peak and off-peak electricity prices, including the introduction of a “critical peak” rate. Yet, many observers question how such critical peak pricing could effectively be implemented through the proposed opt-in approach. “As it is not elaborated on, I am left to wonder who would choose to opt in?” said Mike McGee, managing director of consulting firm, Energy Profiles Limited. “The recommendation is somewhat simplistic.” The preceding article is excerpted from Canadian Property Management, March 2012. The complete text of Public Services for Ontarians: A Path to Sustainability and Excellence, the report of the Commission on the Reform of Ontario’s Public Services can be found at www.fin.gov.on.ca/en/ reformcommission.


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cover story Cover

“Obviously, the major benefit of installing solar panels is the 20-year income stream and full payment of the investment” JermarkPIPE_Condo_Apr09.pdf

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Summary I n s o u t h e r n O nt a r i o, fo r a m i d - s ize condo building with southern exposure, a solar P V system requires a $75,0 0 0 to $90,000 capital outlay (plus interest/ leasing costs) and will generate about $11,0 0 0 in income per year, assuming 80.2 cents per kilowatt hour of electricity generated from rooftop systems with a rated capacity of 10 kW AC or less with a 20 -year contract. An $80,000 capital investment will take 7.3 years to recover, after which the income is arguably 9 0 per cent or more bottom line profit. Higher ROI claims have been realized s u c h a s a 10 k W ro of - m o u nte d P V system installed for $ 6 5,0 0 0 with an average system production in southern O n t a r i o o f a b o u t 1, 2 0 0 k W h / y e a r, creating approximately $9,624 annually for a 6.7 year return of investment. While there are definite pros and some cons, or at least notable considerations, to the investment in solar photovoltaic s y s te m s , t h e ove r a l l a n d l o n g - te r m benefits are very attractive. 1

C h ri sto p h e r S e e p e i s a c o m m e rc i a l realtor at The Behar Group Realty and maintains www.multiresidentialexpert. com, a website dedicated to providing expert advice and sharing his personal investment and ownership experiences to those investing, or looking to invest, in multi - unit residential properties in southern Ontario. You can contact him at cseepe@thebehargroup.com


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Technology

Are iPads the future of leasing? During 2011 we were looking for ways to add some

“WOW” factor to our leasing process. We have always prided ourselves on

being very customer service oriented but felt we could do more to differentiate ourselves in this area. With tablets being such an en vogue topic in today’s society, we quickly honed in on this as a potential opportunity.

By Richard Roos, Chief Operating Officer Venterra Realty

In our initial examination of the use of tablets we identified a number of benefits that we felt warranted a test pilot: • WOW! Factor – there is a cer tain mystic associated with tablets and first mover advantage as few companies have taken this to market. • Overcoming objections in real-time – use of a tablet with the Internet opens the door to many tools such as Sk ype (w w w.sk ype.com), furniture arrangers and Google Maps which are all very helpful for i m m e d i a te l y ove rc o m i n g l e a s i n g objections during a tour.

34 CONDOBUSINESS | www.condobusiness.ca

• L e asing p ro c es s ef fic ienc y – our leasing consultants would have t h e a b i l i t y to a c c e s s a l l c r i t i c a l information such as unit availability and pricing at any time during the leasing tour. • Remote tours – the abilit y to use Sk ype allows us to show a unit to prospects that cannot physically tour the property. We decided to move for ward with a pilot project using iPads which was the tablet option we determined to be the most appropriate for our needs. Prior to kicking off the pilot project we formed an internal focus group that met


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several times to brainstorm on how best to use the iPad in the leasing process and to develop a general guidance document for the on-site teams. Over the first few weeks of the pilot we kept in constant communication with the proper ties. We expected that it would be difficult to foresee all of the opportunities and challenges and we would have to make many changes on the fly. This proved to be very true. To date the prospect and employee feedback has been great and we have seen benefits that warrant continued investment in this area. While much of our feedback to date is anecdotal, we have closed five out of town leases through the use of Skype. If you are thinking about using a tablet in your leasing process you should consider the following: • You need to analyze the structure of your website in relation to the tablet you select. IPads for example, only

operate using Safari to surf the web. You also may want your website host to alter the way a tablet accesses your website. We changed iPads to default from our mobile website to use our full website. • You w ill ne e d a 3 G d at a p l an to properly enable the tablet. Many of the tools that enhance the leasing experience on a tablet such as Skype (w w w.sk ype.com) and Walk Score (w w w.walkscore.com) require the internet. • Typing on a tablet (with your finger) is much different than t yping on a key b o ard o r h an d w r i tin g a g u e st card. You may want to reconsider the amount of data you collect in a guest card to improve the efficiency of the tour. • It is easy underestimate the need for training and support for an initiative to deploy these. You must ensure your on-site teams have been given

the proper amount of direction and support to realize the benefits. • You will want to acquire a Leasing A p p (a faster an d m o re ef fic ient version of the leasing par t of your operating system) for your operations systems to maximize your Leasing Consultant’s efficiency and provide a seamless leasing process to the applicant. W h i l e w e h a v e n o t c o m m i t te d to expanding our iPad test pilot at this point, the early returns have been very positive and we feel that our experience will only improve as we bet ter understand the potential tools and how to integrate tablets into the leasing process. Technology advancements will only expand the benefits from tablets and I believe the use of tablets will one day become table stakes in the Apartment Industry – both in the U.S. and Canada. 1

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Board members could also face criminal charges for safety violations? Unless you plan and monitor safety you will likely be in violation? It’s up to you (the Owner) to SHOW that safety is being addressed? So what’s the best way to protect the Board and your building? 416-891-7120 - Now you have the answer


Maintenance

The changing rules for fuel storage and diesel generators By Bassem Sukkar

The rules for fuel storage and diesel generators have changed and there is no

grandfather clause to allow existing installation to remain. Fuel delivery can be stopped if you do not comply with these new code requirements. M any resid ential and c ommercial buildings have emergency power sup plied mainl y by diesel p owere d generators. These are used as a back-up for life and safety systems such as fire alarm panels, sump pumps, exit lights, emergency lights, and in many building’s fire fighters’ elevators. Diesel powered generators account for more than 85 per cent of buildings. The installation of diesel generators, l ike m a ny ot h e r m a j o r e q u i p m e nt , are governed by bylaws, codes, and re g u l a t i o n s a s w e l l a s a u t h o r i t i e s h av in g ju r i s d i c t i o n ove r ins p e c t in g these equipment. Technical Standard & S a fe t y A u t h o r i t y ( T S S A ) i s t h e Ontario authorit y that regulates fuel suppliers, distributors, storage facilities, contractors, and equipment. In Ontario, all diesel fuel installations must comply

38 CONDOBUSINESS | www.condobusiness.ca

w i t h C S A B13 9 O N 0 6 ‘ O n t a r i o I n s t a l l a t i o n C o d e fo r O i l B u r n i n g Equipment ’, which is based on the national standard CSA B139 but with Ontario amendments. In March 20 02 an Alternative Inspection Program was established bet ween TSSA and the Fuel Oil Industr y Associations calling on the fuel deliver y supplier to per form an initial basic inspection of the diesel fuel system installation and identif y any safety or code related deficiency. By May 2004, all diesel fuel installation should have undergone a basic inspection by a certified/licensed Oil Burning Technician (OBT1). Following this basic inspection, a comprehensive inspection should have been completed by May 1, 20 07 by the Oil Burning Technicians that deliver


Maintenance

the fuel to clients. If a technician found deficiencies with the fuel systems they were to notify their clients that they are not able to deliver fuel to the building until the issues are corrected. Some of these deficiencies are classified as immediate hazard while others are classified as nonimmediate hazard. A significant number of building owners, operators, and proper t y managers are unaware of code compliance issues with the diesel fuel systems installed at their buildings as the existing generators have been running for a long period of time without any problems. Due to several incidents of diesel spills and fires, TSSA started to enforce CSA B139 ON to ensure that all diesel installation are safe and code compliant, as failure to do so, will have severe implications for the health and safety of the general public and to the environment. Most buildings have not had a proper comprehensive inspection completed. “We are finding that most diesel fuel installations do not comply with the required codes and regulations and building owners and property managers are not aware of this. This leads to interruptions of fuel delivery when fuel tanks could be critically low, causing concerns for the safety of the building and their occupants,” said Ed Porasz, president, M & E Engineering.

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Upgrading a diesel fuel system Upgrading the system goes beyond replacing single wall tanks with double wall ones or adding fire valves or alarm panels. To incorporate a proper upgrade of the diesel fuel system a comprehensive engineering study and design is required to ensure that all items are viewed, designed, and variances applied. Some of the most basic and common items found in almost all diesel installations in Ontario, which do not meet code requirements, are as follows: Day tank venting The venting of the day tank (for elevated installations i.e. main tank in on the ground floor or P1 Level and the generator is in the penthouse mechanical room) should be via the return line or overflow pipe back to the main tank. The problem is that the majority of the day tanks are vented to the atmosphere without any redundant systems. As a result, there is a chance of a diesel spill to the exterior if the day tank overfills and the return line is not of sufficient size.

12-03-07 2:43

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March 2012 39


Maintenance

Location and capacity of main storage tanks The location of the main diesel storage tank should be installed close to an ex terior wall where the distance bet ween the bot tom of the tank to top of vent is less than 13’ 6”. If the distance exceeds the limit then certain safet y measures must be taken. In addition, diesel storage tanks should be located in the lowest level of the building or else the capacity of the main storage tank will be limited. Generator exhaust stack T h e g e n e r a to r ex h a u s t s t a c k s h a l l be of the approved venting t ype (ULC st ainless steel). Based on my obser vations, 9 0 per cent of the g e n e r a to r s t a c k s a re s c h e d u l e 4 0 black steel pipes. Generators used in residential buildings have exhaust flue temperature ranging from 8 5 0 0 F to 1,200 0F. TSSA requires a professional engineer provide a stamped and signed let ter cer tif ying that the installation

m e e t s N F P A 2 11 ( N a t i o n a l F i r e Protection section 211). Clearance from combustibles is critical when the exhaust stack penetrates the ceiling/roof of the generator room where combustible materials may exist, depending on the type of roof (water stop PVC materials, asphalt membrane…). The clearance requirement, according to code, is 36” for non-insulated stacks and 12” for insulated stack. In reality, installing contractors do not leave more than few inches around stack penetrations through the roof. To resolve this issue, temperature measurements of the flue gas should be taken with the generator running at full load for a minimum of t wo hours or until the temperature stabilizes. Temperature readings should not exceed 65 F above ambient and test results submitted to TSSA by a Professional Engineer.

system, fusible links, approved flexible connections, ULC rated filters, and leak detection, etc… I n s u m m a r i z i n g , i t i s ex t re m e l y important to have a safe, reliable, and c o d e c o m p l i a nt e m e r g e n c y p owe r generator installed in your building as it is used for life and safety systems. Also, it is important to be proactive in ensuring that your generator system complies with co de so there is no interruption of fuel supply as correcting some of these issues could take a number of months, before fuel c an be delivered again. For this reason, I recommend enlisting a professional engineer to review your diesel inst all atio n an d a d v ise you o n the most effective and economical way to upgrade the system, and to design and obtain necessary variances from TSSA to ensure code compliance. 1

Recommendations There are many other items that need to be addressed such as the ventilation

Bassem Sukkar, P.Eng., Associate, M & E Engineering

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SMART IDEAS

Six tips for protecting your home on social media

Do

With spring here, and summer on its way, homeowners are gearing up for summer getaways. Here are six tips for protecting you and your home on social media.

Don’t

monitor what

your children are posting i.e.: “Parents gone all weekend! House to myself!”

update any statuses or

“tweet” the dates that you are going away. Also, be sure to utilize the privacy settings on social media sites correctly to ensure that strangers are not seeing things you didn’t intend them to see.

Do

post updates or

“tweet” about the great new security system or locks you just had installed.

Do

be careful when using the “check-in” feature on Facebook,

and be weary of apps that share your location to others. The new generation of apps broadcasts your location at all times to friends -- and in many cases to people you don't even know. And unlike the previous

Don’t

generations of applications that required you to check in to a venue, post photos of the new

these apps are persistent unless you pause them or turn them off.

52” TV in your living room or the vintage Harley Davidson in your garage

Don’t

write about how frustrated you are because your

front door doesn’t shut properly, or about how you’re getting new Courtesy of Weiser Lock

42 CONDOBUSINESS | www.condobusiness.ca

windows installed over the weekend.


Peace of mind included. At CLM, we know contemporary condominium living is not only about comfort, but in having confidence in the day to day management of your investment. With over twenty years of ‘hands-on’ experience, CLM’s team of professionally trained managers provide the highest standard of service. A member of CCI, ACMO and BILD, we are also ACMO 2000 certified. If it’s time to reconsider your choice of professionals, think CLM—we’ll make you feel more than just comfortable, we’ll make you feel confident. For competitive management rates, and to find out how CLM can keep condominium living worry-free, please contact; Stacey Kurck Director, Business Development Office: 1.877.81.CONDO (26636) x467 Cell: 416.894.2377 stacey.kurck@condominiumliving.ca

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CondoBusiness March 2012  

CondoBusiness March 2012