CondoBusiness

Canada’s Most Widely Read Condominium Magazine

March 2018 • Vol. 33 #1

LIVING LARGE

Will Toronto’s new 'ultra-high-rises' come with sky-high maintenance costs?

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Advancing pest control, preventing potholes and securing master keys

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Contents FOCUS ON: MAINTENANCE

18

Catch basin upkeep critical as potholes proliferate

By Rod Campbell

34

Energy management A case study in cogeneration

By Per Polderman

22

Birth control for pigeons among pest management advances

By Dr. Alice Sinia

36

Legal When can condo corps enter bulk telecom contracts?

By Cheryll Wood and David Lu

26

Out of reach?

By Michelle Ervin

42

Management Tenants remain outsiders in condo communities

46

Development Rich amenities make up for shrinking suites

By Dominic DeFreitas

48

Regulation Condos look for energy reporting loopholes

DEPARTMENTS

10

Security How secure are your master keys?

By Scott Hill

14

Governance Workplace harassment not limited to Hollywood

IN EVERY ISSUE

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EDITOR'S LETTER

Living large

Publisher Mitchell Saltzman

It sounds like a game of Jenga, but it’s

a real-life predicament that has been flagged by an engineer: You’ve got a large piece of equipment lodged in the middle of a condo building. How do you remove it at the end of its useful life?

This is one of the new questions that have arisen as Toronto’s condo buildings have climbed 50 storeys and more. These tallest of multi-residential towers are something of a new beast. Their design and construction differs from the 30-storey high-rises that came before them.

It’s not necessary to have all the answers today or tomorrow. Major building components and equipment can last for years, decades even, before demanding replacement. And the variables may change in the intervening years as new solutions come onto the market.

But it’s important to contemplate these questions today because it has implications for the long-term financial planning of condo corporations. The commercial buildings that hit these heights long before condo buildings suggest that these challenges are not insurmountable. However, Sally Thompson, managing principal at Synergy Partners, is projecting that the work-arounds will come at a steep price.

This month’s cover story investigates what could be involved in maintaining condo buildings of 50 storeys and up. Accompanying the cover story is expert advice, relevant to complexes of any size, on distinguishing between improvements and repairs as well as managing major projects.

You will also find our usual spring-time spread of maintenance articles in this issue. A catch basin expert offers tips on preventing water damage in parking lots with a particularly bumpy pothole season predicted, and an entomologist rounds up some of the most exciting advances in pest control, such as birth control for pigeons (seriously).

Plus, a security professional shares strategies for maintaining the integrity of master keys after a media report that a pair was stolen from the fire safety box in a Riverdale community.

As with many aspects of governing condo corporations, careful planning can go a long way toward circumventing or at least reducing the size of future challenges. In the condo buildings that have climbed 50 storeys and more, that could mean starting to save for major projects sooner to make reserve fund contributions more manageable.

But the new questions raised by Toronto’s ever taller multi-residential towers, with their attendant mix of uses and increasingly complicated legal relationships, prompt an even bigger question about the current direction of city planning: “Why are we taking these very, very complex buildings and dumping them onto a volunteer board?” said Thompson. “Condos should be simple enough for a volunteer board to get their heads around, and we’re not building that.”

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

Editor Michelle Ervin Advertising Sales Liam Kearney, Melissa Valentini Senior Designer Annette Carlucci Production Manager Rachel Selbie Contributing Writers Rod Campbell, Dominic DeFreitas, Scott Hill, David Lu, Per Polderman, Shlomo Sharon, Alice Sinia, Cheryll Wood 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 Yeshdev Singh 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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ASK THE EXPERT

Junior condo managers subject to supervision The new deadline to apply for the mandatory licence now required in Ontario to continue practicing in the profession was due to close at the end of March. Applicants with less than two years of experience will only be able to obtain a limited licence, which comes with restrictions. Shlomo Sharon, CEO of Taft Management, answers: What will supervision requirements mean for junior condo managers?

The Condominium Management Services Act (CMSA) will significantly change the way condo managers manage. In order to understand how, and what kind of supervision licencing will require for junior managers, it is important to know what type of licensing condo management companies and condo managers are required to apply for by March 30, 2018.

Before the CMSA, just about any person or company could manage condo corporations — even without any prior experience in condo management. The Association of Condominium Managers of Ontario (ACMO) established professional and educational standards through its registered condominium manager (RCM) designation

8 CONDOBUSINESS | Part of the REMI Network

and ACMO 2000 certification for condo management companies.

However, they were not a requirement and not everyone in the industry chose to go through the process of meeting these standards.

The CMSA will now require, by law, condo managers and management companies to be licenced, and they will be required to meet the licensing requirements to maintain a licence. There is a graduated licensing process with three classes of licences: The limited licence, the transitional general licence and the general licence, which will impact the work ing pro c e dures of b oth c ond o m anag ers and management companies.

ASK THE EXPERT

The three types of licensing will fit the qualifications and education of the applicant. First, when managers apply for any one of these licences, they will be required to file with their application a police criminal record check, which must have been issued to them no later than six months prior to the date of application.

The limited licence class is primarily for junior managers who have less than two years of condo management experience. The holder of this class of licence will be required to work under the supervision of either a general licencee or a transitional general licencee.

The limited licence holder cannot hold his/ her licence indefinitely. The holder of this licence will have five years to complete all the qualifications that are required to get the general licence, including attaining at least two years of specific experience managing condos. During this time, the limited licence will need to be renewed on a yearly basis.

The limited licencee, in addition to being supervised, will not be allowed to sign a status certificate or manage, control or disburse a client’s reserve fund account. In addition, a limited licencee will not be able to disburse clients’ general funds without the approval of the supervising transitional general licencee or the general licencee. This is a departure from the way condos have been managed.

The transitional general licence and the general licence holders, who will be the ones to supervise the limited licence holders, will need to have the following qualifications.

The transitional general licence is for applicants who have more than two years’ experience of managing condo corporations, but have not yet completed the educational requirements. The holder of this licence will have three years to complete the educational requirements and apply for a general licence.

The general licence is for applicants who, in addition to having two or more years of condo management experience and having provided management services in the 90 days preceding Nov. 1, 2017, have completed the educational requirements. Those requirements are successfully completing ACMO’s courses in condo law, physical building management, financial planning for condo managers, and condo administration and human relations. Alternatively, applicants who have five or more years of experience

managing condos can meet these educational requirements by successfully completing ACMO’s four challenge exams.

It is interesting to note what counts towards work experience, as one of the functions of a general licence holder is to supervise the limited licence holder. The work experience of the general licence holder needs to include the following: planning/ participating at board meetings and AGMs, preparing budgets, interpreting financial

statements, presenting to boards, overseeing the maintenance and repairs of units (when required), common elements and assets.

This requirement will help ensure that condo corporations receive qualified professional services as general licence holders supervise limited licence holders. 1 Shlomo Sharon is the CEO of Taft Management.

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SECURITY

How secure are your master keys?

Two recent events in Toronto have called into question the security of master keys in condo buildings.

10 CONDOBUSINESS | Part of the REMI Network

BY SCOTT HILL

SECURITY

In one case, a Riverdale condo is facing a bill of $30,000 to $40,000 to re-key its building after its master key was snatched from its fire safety box and used to steal a bike secured in a storage locker, according to a CBC news report.

In the other case, a locksmith company in Toronto has been advertising that it will copy security locks for condo owners. In addition, a quick check of Google reveals several chat forums in Toronto and the U.S. where condo owners are advising each other of potential locksmiths that will ignore the instructions, ‘DO NOT DUPLICATE,’ emblazoned on these keys.

These owners are also comparing notes on how to approach the locksmith for the best results.

T h e s e t wo eve nt s h i g h l i g ht t h e importance of protecting master keys to condo buildings from unauthorized duplication and use.

Preventing unauthorized duplication It comes as a considerable surprise to

most condo managers and board members that those three magic words printed on their building’s master keys — DO NOT DUPLICATE — are merely a request to all locksmiths to respect the condo’s wishes. Hard as this may be to believe, there are no laws or rules in Ontario that prevent the locksmith from duplicating condo keys without proper authorization.

Obviously, this trend should be very alarming to property managers and boards of directors, who expend considerable effort in ensuring the safety and security of their property and its residents. So, is there anything that can be done to rectify this issue?

First, it is recommended that condos only work with reputable locksmiths.

Most, if not all, professional management companies maintain a list of preferred contractors who they know to be both reliable and ethical in their work and pricing. If a condo becomes aware that its locksmith company is copying keys

without proper authorization, the condo may want to take its business to a company that abides by the rules, even if they are unspoken.

Second, experts within the locksmith industr y recommend using restricted keyway locks. The reason that companies are able to copy keys with the ‘DO NOT DUPLICATE’ instruction is because the key blanks used are readily available to most locksmiths. As their name suggests, restricted keyway locks restricts access to the key blanks to the condo’s authorized locksmith.

To copy a restricted keyway lock, a person would have to identify the condo’s locksmith, and then convince him or her to produce a duplicate. Given that this locksmith has a business relationship with the management company, it is unlikely that the locksmith will copy the key without proper authorization.

But these precautions may be for naught if a condo’s master keys are poorly secured.

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Preventing unauthorized use S e c u r i t y au d i t s fo r O nt a r i o c o n d o s frequently find master keys stored in fire safety boxes in condo vestibules. These areas are considered semi-private, but are accessible to anyone. Occasionally, these lock boxes are not very sturdy and can be pried open.

Master keys should be considered a critical asset of the corporation and, as such, have additional layers (or protection) surrounding them. If a condo has 24-hour security on site, it’s recommended that the master keys be stored within the security guard’s line of sight, as well as inside the lobby (as opposed to the vestibule). A condo would also be well-served to create a master key log, where anyone taking the key must sign it out and back in — establishing the dates and times of use and the person responsible.

If there is any suspicion that the integrity of a condo’s master key system has been breached, condos should discuss re-keying.

The risks associated with misplaced master keys are significant — ranging from simple break-ins/thefts to crimes against people (assault or even worse) within residents’ units.

If a condo is considering re-keying, it’s strongly recommended that it undertakes a security audit to ensure that there are no further vulnerabilities before coordinating the project with a reputable locksmith professional and educating staff on proper key control policies.

It’s also worth noting that security audits for new condos commonly recommend the re-keying of master keys used for restricted common elements. That’s because the first board of directors usually does not have any way to determine how many keys were provided to contractors during the building and warranty phase of the condo.

Condos can avoid having to re-key by maintaining the integrity of their master keys through measures aimed at preventing their unauthorized duplication and use. 1

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Workplace harassment not limited to Hollywood Hol ly wood is not t he on ly workplace rife with harassment. Condo

BY MICHELLE ERVIN

communities, with their complicated ecosystems

of residents, employees, third-party service providers and suppliers, are regularly the scenes of inappropriate behaviour.

Consider the cleaner who stays awake at night worrying about the manager who comments on her physical appearance and massages her shoulders while she’s alone in the lunchroom. Or the manager who considers quitting under the stress of being micro-managed by one of his directors. Or the security guard who becomes ashamed to speak aloud because of the way some owners criticize her accented English.

These are all fictional but realistic accounts of on-the-job abuse raised last fall in the Condo Conference session

Harassment: Up Close and Personal!

The discussion comes as accusations of inappropriate behaviour by Hollywood heavyweights mount, reaching a critical mass whereby these reports are having real consequences for the careers of alleged perpetrators.

With victims finding the courage to come forward with their stories, cultural attitudes are shifting such that workplace harassment is becoming impossible to ignore, including in condo communities, which have duties to address accusations of inappropriate behaviour.

14 CONDOBUSINESS | Part of the REMI Network

“Oftentimes our clients and residents d o n ot c o n s i d e r t h e m s e l ve s to b e par t of someone’s workplace — and that’s a natural assumption for them, because they’re at home — but it’s our workplace,” obser ved moderator Catherine Murdock, district manager a t D e l P r o p e r t y M a n a g e m e n t . “I f an employee comes to you from any of your c ontrac tu al sourc es — housekeeping, security, management, g ro un d s - ke e p in g — an d they ne e d to re p o r t a b use, p le ase t ake them seriously.”

GOVERNANCE Cour ts weigh in on workplace harassment Harassment is generally repetitive, unwelcome behaviour — physical, verbal or written — that creates discomfort.

In condo communities, an act such as sending a series of emails making valid complaints can be acceptable or unacceptable, depending on how it’s carried out, said Patrick Greco, partner at Shibley Righton LLP. Greco cited the case of York Condominium Corporation No. 163 v. Robinson, in which he served as counsel for the applicant, as an example. In a decision issued this spring, a judge ordered the respondent owner to stop her harassing behaviour and awarded $15,000 in costs to the applicant condo corporation. The behaviour in question included firing of f missives that, in addition to expressing concerns about building maintenance, body-shamed the office manager.

“An owner has the right to make inquiries, an owner even has the right to criticize maintenance — they’re owners, they have a stake in this — but they can’t turn it into something personal that degrades, humiliates and harasses an individual on a property,” said Greco.

The decision in the Robinson case was based on provisions of the Condominium Act, which prohibits conduct on the common elements and in units that could harm a person; the Occupational Health and Safety Act, which prohibits workplace harassment; and the rules of the condo corporation.

Months earlier, the judge in Toronto Standard Condominium Corporation No. 2395 v. Wong relied on some of the same legislative provisions in issuing a similar compliance order, but not before one of the corporation’s employees that had been subject to workplace harassment requested a transfer. The key difference in the Wong case was that the owner’s b e h av i o u r w a s e r r at i c r at h e r t h a n intentional, said Greco, prompting counsel for the corporation to ask whether a mental examination was warranted.

The condo lawyer advocated taking a proactive approach to allegations of workplace harassment, c arefully documenting any evidence along the way in case it’s needed later, so as to prevent these situations from escalating to the point where court intervention is required.

Policies provide framework for investigations Following up on accusations of inappropriate behaviour is about managing risk, said c o n d o l aw ye r P at r i c i a Eli a , of Eli a A s s o c i ate s , w hi c h m e a ns m a p p in g o u t un d er w h at c irc u ms t an c e s the condo corporation will inter vene. As examples, she said corporations should avoid taking on responsibilities that rightfully belong to other parties, such as contractors, and parties to shared

facilities should hash out how liability for conduct that occurs on common property will be apportioned.

The details of how a condo corporation will address allegations should be captured in workplace h a r a s s m e nt a n d v i o l e n c e p o l i c i e s , which changes to the O ccupational Health and Safety Act made mandatory for employers close to a decade ago.

T he se p o li c ie s sh o ul d d ef ine w h at constitutes inappropriate behaviour and

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GOVERNANCE corporation client, ‘If you don’t fix this, we’re going to sue the corporation.’”

In addition to defining what constitutes inappropriate behaviour, the condo lawyer recommended having a policy in place to affirm the community’s commitment to respecting human rights, which it has a duty to do under the law anyway.

Information management policies likewise support workplace harassment and violence policies by setting out how the corporation will handle confidential

provide for anonymous reporting and expeditious investigation, said Elia.

Directors can be guilty of workplace harassment, so they should establish rules governing how they comport themselves, too, whether that takes the form of a code of conduct or code of ethics.

“I’ve had cases where a director is harassing a property manager,” said Elia. “The property manager responds and reports this issue to their property management team; their bosses say to the

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data, such as in cases where questions of mental competency arise.

The investigation itself involves reviewing the incident, or incidents, in question, which may include interviewing the alleged perpetrator and victim as well as any witnesses. It’s important to be objective in posing questions, Elia cautioned, and the investigation ultimately needs to produce findings and resulting actions.

New legislation recognizes roadblocks to reporting An investigation into workplace harassment can only occur if the inappropriate behaviour gets reported, and there are many reasons why victims may be reluctant to bring forward complaints.

“They don’t get reported because the fear of reprisal, of being labeled a trouble-maker, possibly losing your job,” said Murdock. “Or, in a very strange situation, if you have a very strong case, the fact that you may be given a promotion and asked to sign a gag order so it doesn’t get reported and nothing ever happens.”

Non-retaliation policies are one way condo corporations can remove barriers to reporting inappropriate behaviour in the workplace.

Last year, the Ontario government passed the Sexual Violence and Harassment Action Plan Act, which relaxed, and in some cases scrapped, legislated deadlines for bringing forward complaints.

“This is very important in recognizing the level of trauma that people actually go through when they are sexually and violently harassed or assaulted,” said Elia. “It takes time to heal, and even to have the courage to actually stand up for you own rights to find your voice.”

Di s c our s e in c ond o c ommuni tie s demands rethink Greco suggested that, more broadly, the current level of discourse in condo communities needs to be raised. He pointed to the refrain he often hears at raucous owners’ meetings — the corporation is compensating him handsomely — the implication being that he should just absorb the abuse.

“At the end, I get in my car, play some Metallica … and by the time I get home, I don’t have to go back to the building for a year,” said Greco. “It’s not the same for a cleaner or a manager going back to that the very next day.” 1

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Catch basin upkeep critical as potholes proliferate Have there been more potholes

this year than in previous years? An informal

BY ROD CAMPBELL

survey says yes.

Since the start of 2018, various media outlets in Windsor, Simcoe, Ottawa, Toronto and Hamilton have quoted municipal road operations staff who say they are dealing with more potholes this year than in previous years. The amount of snow and precipitation this winter, along with frequent freeze-thaw cycles, is apparently to blame.

And parking lots, including on condo properties, are not immune from these conditions.

A great way to prevent potholes is to stop water from getting into and under the pavement, where it can cause damage, with effective drainage. Parking lot drains, which are often referred to as catch basins, collect storm or surface water.

But catch basins can stop efficiently moving water away for many reasons.

One reason problems arise is the catch basin is secured deep in the ground, below the frost line. When the frost settles into the ground during winter, the catch basin will stay in place as it is designed to do, and the asphalt or road surface will often heave.

When the warm weather returns, the asphalt moves again and the catch basin stays put, or at least does not undergo as much movement as the asphalt. This, and the several dissimilar materials used to construct a catch basin — the steel assembly, concrete basin and surrounding asphalt — expand and contract at the same time, but at different rates, so something’s got to give.

18 CONDOBUSINESS | Part of the REMI Network

Usually the asphalt around a catch basin is what gives. It will shift, and water will pool around the basin rather than draining through the hole in the catch basin. Having a contractor lower the catch basin assembly will solve this problem. T he process involves re m o v i n g g r a d e r i n g s , a l s o c a l l e d risers or modu-loc, located under the assembly. If there are no grade rings, a low-rise assembly can be installed to solve the pooling water problem.

It’s important to assess why water is pooling around a catch basin before this work begins. The contractor should open the assembly and inspect the grade rings, the bottom of the basin,

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Phone: 416-620-5696 ext. 238 Email: mitar_sijakovic@zoranproperties.com

zoranproperties.com

10:14 AM www.REMInetwork.com2016-07-21 | March 2018 19

MAINTENANCE

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20 CONDOBUSINESS | Part of the REMI Network

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and the pipes entering and exiting in the basin bottom. There is no point in fixing the outside of a catch basin or the surrounding asphalt if the problem is inside.

The inside of a catch basin may fail due to heavy traffic and wear and tear over time. Broken grade rings need to be replaced. If the bottom of a basin cracks, it too needs to be replaced. The space surrounding the pipes entering the basin — called the annulus — may need to be repaired or filled. Otherwise, water draining out of the basin will take the path of least resistance, flowing outside the pipes and creating a cavity where there shouldn’t be one. Water should drain away through the pipes into the storm sewer system.

Similarly, when the asphalt surrounding a catch basin cracks, water will take the path of least resistance, entering at the lowest point under the assembly and wearing away the surrounding asphalt.

C o ntr a c to r s sh o ul d als o l o o k fo r obvious damage to a catch basin, such as cracks or pieces missing from the assembly. A cracked assembly should be replaced because its brittle steel will snap and fail. When pieces are missing from an assembly, the snow plow is usually to blame. If an assembly shifts during the winter, as they often do, snow plows can hit and break them.

Asphalt in a parking lot should slope tow a rd t h e c atc h b a s i n s s o w ate r naturally flows into the basins. In parking lots with a limited slope, standing water can become difficult, if not impossible, to move without completely removing and regrading the subbase. Aside from design flaws like this, which can require the costly repair and replacement of parking lots, regularly inspecting and maintaining catch basins — once or twice a year, in spring and fall — can prevent small problems from becoming bigger, more expensive problems.

Anecdotal evidence of potholes being especially problematic this winter serves as a good reminder of the importance of protecting condo properties from water damage. 1 Rod Campbell, president of the Catch Basin Authority, has more than 20 years of experience in the property management and construction business. More information is available at cbauthority.ca.

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MANAGEMENT MAINTENANCE

Birth control for pigeons among advances in pest management After successfully controlling pigeon populations with birth control, pest

BY DR. ALICE SINIA

management professionals are looking to use the same strategy to control rat populations. This is just one of the recent advances

in pest management that could help condo managers combat the bed bugs, flies, others insects and rodents that can invade their properties.

Groundbreaking research and technology are paving the way for smarter and more sustainable pest control. The industry is constantly looking for better ways to manage pests, and for most of these innovations, the goal is to minimize the impact on the environment and any non-target creatures.

Even better, new products are more effective and cost-efficient as well.

Read on to discover what’s new on the market and learn which of these

te c h n o l o g i e s c o u l d b e n ef i t c o n d o properties and their residents.

New pheromone technique targets ants Insects produce chemicals unique to their species called pheromones, which allow them to communicate and influence their behaviour.

Pheromones are a type of bio-rational material, meaning they are non-toxic to people and animals and have no environmental side effects if used appropriately.

22 CONDOBUSINESS | Part of the REMI Network

The use of pheromones in the pest control industry is not new, but the way pheromones are being used has been refined to improve their effectiveness. The pheromone traps that pest management professionals have been using to detect and monitor pest populations are now incorporating bait-based insecticides.

Researchers at the University of California developed a “pheromone-assisted technique� to maximize the effectiveness of an insecticide used to control Argentine ants.

MAINTENANCE The original insecticide works to reduce ant populations only if the ant comes into contact with the treatment. However, when combined with Argentine ant pheromones, the product actively attracts the ants, luring them away from their trails and nests to the enhanced insecticide.

Although this new product is currently specific to the Argentine ants, experts are modifying the technique and aiming to apply it to other ant species and eventually other pests. One such product for bed bugs is currently in the works.

Birth control for pigeons…and soon rats?

Pest management techniques have also shifted to an ecological approach aimed at manipulating pest behaviour and population dynamics to reduce the population.

In recent years, pest management professionals have been using birth control for pest birds, such as pigeons, as a means of managing populations. Now the attention has turned to rodents, which are capable of transmitting harmful pathogens and contaminating food and surfaces. Rodent birth control may soon target these prolific breeders without negatively impacting nontarget creatures. This will have the greatest

impact in busy, urban areas, where controlling the rapidly growing rodent population continues to be a challenge.

Infrared cameras ferret out hidden pests Thermography is relatively new technology in the pest control field, but is quickly gaining popularity.

When pests such as rodents, wildlife, bees, wasps, termites or ants are concealed behind walls, voids, ceilings, or are in other secluded sites, they can be detected using infrared cameras because of the heat emitted from their bodies. The heat pattern and intensity emitted from their nests, colonies or movement is picked by the camera and seen as an array of colours.

That’s how the technology is being used to detect pest habourage sites, nests, potential entry points, damage and activity without having to tear down the structure or open up walls. It also helps to detect conditions that are conducive to the pests, such as the presence of moisture, fungal growth or wood damage.

Thermography can also be used to verify that a treatment worked to eliminate a pest problem. It is time-saving, accurate and a reliable pest diagnostic tool — particularly in condo buildings, where

pest inspection and detection can be challenging.

Real-time monitoring improves response Mobile data-capture devices have made the transfer of pest control information more efficient, helping pest control professionals record pest activity in real time and react quickly. Over time, professionals can identify trends in the data, making pest activity more predictable and preventable.

Some of this research and technology are still in early development or testing stages, but it’s clear that the pest control industry is busy making advancements. The good news is that, once available, many of these advancements stand to improve pest management in condo properties. 1 Alice Sinia, Ph.D. is quality assurance manager – regulatory/lab services for Orkin Canada, focusing on government regulations pertaining to the pest control industry. With more than 15 years of experience, she performs analytical entomology as well as provides technical support in pest/insect identification to branch offices and clients. Alice can be reached at asinia@orkincanada.com or www.orkincanada.com.

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www.REMInetwork.com | March 2018 23

SPONSORED CONTENT

Measure by Measure Cutting costs and keeping property owners happy

Keeping tenants happy, buildings occupied, and property values high are top priorities for property management firms. In reality, that's easier said than done – especially in an era where “plugged-in” lifestyles, rising labour costs, and rental regulations are making it increasingly difficult for property stakeholders to find financial breathing room.

24 CONDOBUSINESS | Part of the REMI Network

“The rental market is inundated with not just energy-related concerns, but also rent control, new building evaluations and regulations, and lower vacancy rates,” agrees George Hantzis, Large Commercial Energy Solutions Manager with Enbridge, adding, “all of those things intensify the challenges to keep tenants satisfied while continuing to grow a business.”

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They also emphasize the need to partake in energy retrofits and smart cost-saving measures to lean out operating costs and free up money for their core business: delivering quality rental supply.

“There's no one thing that will improve your bottom line. That's why, when people like us go into a facility to help property owners or managers find ways to save energy, we are always looking at the issue from a holistic approach,” says Dominic DiMuzio, Enbridge Multi-Residential Energy Solutions Consultant.

Enbridge's team of technical experts collectively work with hundreds of multire s i d e n t i a l b u i l d i n g s a n n u a l l y t o h e l p stakeholders optimize their energy usage and save money. It's that hands-on experience that has equipped them with cost-saving insights and proven energy smart measures.

Here are just a few:

Tweak your controls A few system tweaks can go a long way.

Energy Consultants can play a big role in identifying energy-wasting procedures and make small – yet impactful – changes that will result in long-term savings.

For example Carmine Faiella, Multi-Residential Energy Solutions Consultant offers this advice, “when you reduce your set point temperatures the savings are automatic. That said, you need to be careful and considerate of tenant comfort.”

Get with the program A number of energy-saving consultation programs are available to property stakeholders at no cost. In some cases, such as Enbridge's Commercial Custom Retrofit Incentives programs, participants can receive

financial rewards for implementing energysaving measures.

“We'll work with customers, free of charge, to identify energy efficiency opportunities that save natural gas and in return save them money. And if they implement any of our recommendations, we will cover up to 50 per cent of the project cost,” explains Hantzis.

“These programs are available, and they've been proven to work – so there's no downside to trying them.” Adds DiMuzio Good tenants plus stable occupancy rates equal high property values (and happy owners). It's a simple formula that's becoming harder to apply. With some smart energy measures and assistance from those in the know, property managers can find a friendly balance.

Make smarter retrofits When it comes time to replace or upgrade critical building components, consider that an ideal opportunity to not only seek a more energy-efficient solution, but to upgrade connected systems.

“When a customer is changing their boiler, for instance, that's an ideal time to also take a look at changing the way they pump those boilers or control them,” offers DiMuzio.

As for what jobs to prioritize, Hantzis adds: “We’ve had a lot of success working with property managers on boiler efficiency upgrades, as well as installing Variable Frequency Drives (VFDs) on ventilation systems. If those have not been done, I would recommend doing those first.”

Do more with what you have There are several ways to optimize savings with existing equipment. For example, one is to introduce an advanced building automation system (BAS) that monitors, manages, and reduces energy usage on an interval level.

Another is to install pipe insulation across all hot water systems. And pipe insulation typically delivers a quick return on investment.”

“It's all about sustained savings,” says Chinmayee Rindani, Multi-Residential Energy Solutions Consultant. “When your building is monitored, you can track if there are any manual adjustments made on site that are pushing your energy costs up. Understanding your property’s energy consumption through monitoring can provide a roadmap to future opportunities and sustained energy savings.

For more information on Enbridge's efficiency programs, or to learn about how Enbridge’s Energy Solutions Consultants have helped multi-residential customers in the past, visit www.enbridgesmartsavings.com/business.

COVER STORY

OUT OF R As condo buildings rise 50 storeys and up, one engineer is warning that major repairs and replacements will be more complicated and consequently more expensive to complete in this new and growing crop of tall towers

BY MICHELLE ERVIN

COVER STORY

REACH? www.REMInetwork.com | March 2018 27

COVER STORY to conduct major retrofits on the exterior of ultra-high-rises, which could otherwise stretch into years if the work is being done using a single stage.

The new and growing crop of buildings rising 50 storeys and up in Toronto will be more complicated and consequently more costly to maintain, one engineer is warning. She is not alone in her assessment.

But at least one major developer is not convinced that the people who buy units in buildings of this height will automatically pay a premium for upkeep. Its president says ease of maintenance very much factors into the design and construction of tall multi-residential towers, and he points to concrete examples of how.

If others are less interested in thinking through how end-users are going to repair and replace major equipment, there is nothing in the Ontario Building Code that would force them to — yet. A guideline for building durability that is due to become a standard could establish design requirements for maintainability.

In the meantime, however, condo corporations governing existing buildings of 50 storeys and up have to fund the reserve accounts used for major repairs and replacements based on current conditions.

Tall towers raise access issues Speaking at the Condo Conference last fall, Sally Thompson, managing principal at Synergy Partners, flagged design decisions in tall multi-residential towers that she predicted will, at best, inflate repair bills and, at worst, introduce ‘inconceivable problems.’

Consider the case of a heat exchanger, two storeys in height, located on the 50th and 51st floors of a 70-storey building. What happens when it needs to be replaced?

“It’s not on the roof; I can’t bring a helicopter in and pluck it out,” said Thompson, speaking last fall. “I somehow have to extract it from the side of the building, and so I don’t know how you do that.”

Reflecting in a later phone interview, Thompson recalls first encountering such challenges a few years ago, when ultra-high-rise condos began coming onto the market. Since then, she has observed other examples of large equipment in awkward locations, as well as rooftop cranes with inadequate capacity.

“If I have 500-pound capacity on the suspended stage and 250 on a hoist, that’s two guys, some hand tools and one piece of glass,” said Thompson, speaking at the industry conference. “And, to give you context, it takes half an hour or more to drive the crane up or down the building.

“And, to give you some more context, these cranes have mandatory wind speed limits, which means you basically can’t run them from October to April in Canada.”

She said she foresees condo corporations having to rent mast climbers — large platforms that scale buildings from ground level —

28 CONDOBUSINESS | Part of the REMI Network

Higher per-unit costs predicted Extra costs such as this may be shared across a greater number of owners in ultra-high-rises, but Thompson expects to see higher perunit costs in these buildings — a view Dale Kerr, senior principal at Pretium GRG Building Engineers, shares.

“Of course, there will be more units in a higher building, but I suspect many of them tend to be luxury condos, with larger units, so there won’t be a large enough increase in the number of units to offset the likely increased maintenance costs on a per-unit basis,” said Kerr.

As a rule of thumb, condo corporations need to contribute $2,000 to $3,000 per unit per year to their reserve fund, said Thompson.

By way of contrast, she pointed to a 65-storey condo building that is making annual reserve fund contributions that work out to around $5,000 per unit.

Thompson acknowledged that there are some complex low-rise buildings, which tend to have much larger units, for which condo corporations need to contribute as much as $6,000 to $7,000 per unit per year to the reserve fund. Indeed, Kevin Shaw, manager of building science at Cion|Coulter, observed that it’s not just tall towers that present problems of access when it comes time to replace large equipment, citing the example of underground chillers.

“There’s no way of bringing those pieces out in their original or installed whole capacity — they have to be taken apart,” said Shaw.

“And same thing with anything that’s going in — you can’t bring a full-sized chiller back into a P2 (parking level 2) basement.”

He said dismantling and assembling equipment in place is a costlier process than using a crane to swap old equipment for new equipment in one piece, regardless of building size.

Building code quiet on maintainability The Ontario Building Code is currently quiet on the maintainability of buildings, other than requiring the provision of anchor systems to support window cleaning. However, this could change in coming years. A Canadian Standards Association committee has been given a mandate to convert a building durability guideline into a standard, and is considering incorporating design provisions aimed at facilitating building upkeep.

Standard or no, it’s in Great Gulf’s interest to consider ease of the maintenance for the end-user during the design stage — not only does it develop and construct condo buildings, but it sticks around to manage them after they’re complete.

“As we go taller, we’re now designing systems on multiple levels of the building, so instead of putting everything on the rooftop, we have building maintenance units scattered throughout the verticality of the building,” said Christopher Wein, president of Great Gulf.

Condo buildings have only recently soared past the 50-storey mark in Toronto, and are rising ever higher at a rapid clip, reaching 78 storeys and poised to top 90 storeys soon. Whereas it’s common to see mechanical penthouses on 30-storey condo buildings, this type of large equipment is now located on intermediary floors as condo buildings reach new heights.

“The reason that you disperse the mechanicals throughout the height of the building is, when you’re dealing with heating and cooling

fluids, there’s only so much vertical distance that you can pump things in certain directions,” explained Wein. “At a certain point, it starts to become inefficient, so it’s actually more efficient to treat the building as if it’s three buildings, one stacked on top of another.”

That’s precisely how Great Gulf is treating the 92-storey residential tower it’s developing as part of the mixed-use Mirvish+Gehry project slated to rise in Toronto’s Entertainment District. There will be a mechanical floor capping each 30-storey portion, for a total of three mechanical floors, including two on intermediary floors.

Dispersing equipment across several floors makes it possible to use units that are smaller than would be required if one large unit were used, said Wein. And the units themselves break down into smaller components that can be transported in and out of buildings in service elevators designed for that purpose when it’s time to replace them.

Tower segmentation could curb costs Wein countered the idea that owners are destined to pay more per unit to maintain buildings of 50 storeys and up. For example, Great Gulf is segmenting single towers of substantial size into multiple condo corporations, bound by easements and shared facilities agreements. He maintains the move will bring costs down by staggering and reducing the scope of tasks.

The developer is currently constructing a 46-storey condo building that will have dual identities as Yonge+Rich and 20 Lombard, each with distinct entrances, elevators and amenities. The former, occupying the lower 33 floors, will be governed by one condo corporation, while the latter, occupying the upper 13 floors, will be governed by another condo corporation.

As towers grow taller, Wein suggests this move will also have the effect of concentrating any challenges that might come with height in the hands of owners who enjoy breathtaking views.

“Because those are distinct condo corporations, the people who are getting the benefit of living 80 storeys up in the sky are paying the premium for that height,” he said. “But the people down on the 20th floor, who are not enjoying the benefit of that height, are not having to pay for stuff that’s happening at the top.”

Window cleaning offers early insight Window cleaning may be one of the earliest tests of predictions about the challenges and associated costs of upkeep in ultra-highrise condos. This biannually recommended maintenance, which typically occurs in fall and spring, has already begun at tall multiresidential towers, after an initial roadblock.

“We’ve had trouble with a lot of our insurers not wanting to insure window cleaning over 50 storeys,” said Jennifer Runyan, owner and manager of Triumph Window Cleaning.

With custom insurance now in place, Runyan said she is allocating four weeks for window cleaning in 65-storey buildings, versus the one week she allocates for 30-storey buildings. Higher insurance costs, extra staffing and time requirements push up the price of this work, especially since workers must be compensated at higher rates to reflect the increase in difficulty of window cleaning at higher heights, she said.

IS IT A REPAIR, REPLACEMENT OR AN IMPROVEMENT? The reserve fund is reserved for capital expenditures required to maintain condos to their original quality.

Boards have to win the support of owners to spend money on significant upgrades, so it’s important to make this distinction Jason Rivait, partner at Miller Thomson, said the question of whether planned work at condos constitutes a repair, replacement or an improvement can be a blind spot for boards.

Speaking at the Condo Conference last fall, the condo lawyer explained that the answer matters, because the reserve fund is reserved for capital expenditures required to maintain or repair condos to their original quality using modern-day materials.

If a project involves any sort of change or upgrade that exceeds $1,000 or one per cent of the corporation’s operating budget — whichever is greater — the board is obligated to notify owners. And if the cost of that change or upgrade exceeds 10 per cent of the corporation’s operating budget, the board must put it to a vote and win the support of at least two-thirds of owners to proceed. Note: These thresholds are due to change in the future, so keep an eye on the Condominium Act. “The Condominium Act requires that the replacement materials be the modern-day equivalent of the original,” said Rivait. “There’s no issue with installing a nicer or higher-end floor in the lobby, because materials and construction standards improve over the years, but if the replacement materials are improvements to the modern-day equivalent, the board needs to be mindful that it cannot simply use the reserve fund money to carry out that expenditure.”

The Boily case, which dates back to 2011, continues to serve as the cautionary tale for boards that ignore this. At the conclusion of the legal saga, each director of the condo corporation was slapped with a $7,500 fine for making significant changes to its courtyard in contravention of a court order.

The board had seized on garage repairs, which required landscaping to be removed, to dramatically alter the landscape, adding parking spaces, among other modifications. Confronted by dissenting owners, the board agreed to put the changes to a vote, but ploughed ahead anyway after failing to secure two-thirds’ support from owners by a slim margin. The owners ultimately succeeded in court, but that success came at a steep price.

“The somewhat troubling part of the decision, and I’m not sure there was a way around it, was that the cost to restore the common elements was imposed on the corporation, so each unit owner had to pay their portion to bring the condition of the courtyard back to its original condition,” said Rivait. “From my understanding, the costs were approximately $300,000 to do so.”

www.REMInetwork.com | March 2018 29

HOW NOT TO MANAGE REPAIRS AND REPLACEMENTS Overseeing major projects can be complicated in condos large and small. Don’t make them more difficult than they need to be by avoiding five common pitfalls Allan Steven, senior manager of internal control and contracts at Canlight, has helped oversee projects in condos totaling more than $25 million. Speaking at the Condo Conference last fall, Steven flagged five common but avoidable pitfalls that come with managing major repairs and replacements:

1

Don’t get dinged with penalties Dust off the reserve fund study at least once a year, during budget preparation, to stay on top of when capital projects are coming up. If funds are reinvested in fixed-term investment products, such as GICs, tying up this money ahead of major repairs and replacements, condo corporations could find themselves paying penalties to cash out early.

“Look at the timing of projects, making sure that if you only need to roll it [the investment] over for one year, don’t roll it over for two years,” said Steven.

2

Don’t forget to factor fees into loans When a condo corporation lacks the funds to pay for required capital projects in its reserve, one way to cover the cost of major repairs and replacements is to borrow money. The board needs to get a majority of owners to agree to pass a bylaw stating the purpose and size of the loan — and that calculation needs to factor in more than just the project quote.

“If you borrow $360,000, you’re not going to get that full amount,” said Steven. “Legal fees will come off, extra costs will come off — you have to think of the whole picture.”

3

Don’t become the general contractor To take responsibility for hiring multiple trades working in the same area is to expose the condo corporation to additional liabilities. Consider the case of an elevator modernization that specifies outside electricians will have to be brought in to complete aspects of the work, which positions the condo corporation to wear the hat of general contractor.

“You can avoid that by having the electrician bill the elevator guy, but there’s an upcharge for that,” said Steven. “Sometimes condos want to save that 10 or 20 per cent.”

4

Don’t get caught without contingencies Why build contingencies into the reserve fund? Anyone who has watched home improvement TV shows knows that budget-busting problems are bound to crop up after work begins. In one case, a stacked townhouse complex was forced to issue a special assessment after encountering just such a surprise in an otherwise straightforward balcony refurbishment project.

“When we opened up the walls, the wood was gone,” said Steven.

5

Don’t forget to look after tradespeople Tradespeople are just that — people. When they’re not working on the project at hand, they’ll need places to eat their lunches, park their cars and relieve themselves, and it’s important to plan for where that will happen. For example, if the common elements are off limits, then it may be necessary to rent portable toilets.

“A lot of this stuff is simple, but it gets missed on the bigger projects,” said Steven.

30 CONDOBUSINESS | Part of the REMI Network

Crews arriving at sites for the first time have also had to spend time familiarizing themselves with the unique built-in swing stages that come with these tall multi-residential towers as opposed to using the standard rentals to which they’re accustomed, said Runyan.

Longer reserve fund studies urged Meanwhile, Thompson is urging those managing ultrahigh-rise condos to give owners more time to pay into the reserve account that funds capital expenditures because of the jump in the magnitude of costs she’s predicting for major work. Whereas replacing windows may have cost up to $5 million in other high-rise condos, it could escalate into the tens of millions in tall multi-residential towers, she projected.

“If you have a $30-million project coming down the pipe, do not leave those poor owners only 30 years to fund it,” said Thompson.

Based on the commercial real estate experience, Thompson estimates that the windows on ultra-highrise condos will have to be replaced or refurbished around the 50-year mark. In this case, a 60-year reserve fund study, as opposed to a 30-year reserve fund study, could mean the difference between asking a condo corporation to set aside $500,000 per year and $1 million per year to pay for this project.

The Condominium Act currently requires reserve fund studies to look ahead at least 30 years to forecast the cost and timing of repairing and replacing major building assets. However, recent legislative changes are expected to introduce new regulations that could raise this minimum to 45 years. Reserve fund studies, which have to be updated every three years, help condo corporations budget for big-ticket costs, ensuring enough money is collected from unit owners through monthly maintenance fees over time to fund capital projects as they arise.

Future technology could mitigate today’s challenges But it’s the experience of seeing buildings go through major repairs and replacements, and comparing estimates to results, that allows the professionals who conduct reserve fund studies to forecast with precision what it will cost to complete various projects. Future advances in technology could mitigate the challenges that loom large today.

“The real solution as we move forward is to continue to invest in technology and continue to invest in innovation around heating, cooling and energy efficiency so that we do end up with smaller, more efficient systems, so that replacement becomes far easier,” said Wein. 1

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SPONSORED CONTENT

MINE THE BILL

How Bitcoin’s soaring energy consumption could be increasing your electricity bill

32 CONDOBUSINESS | Part of the REMI Network

The buzz around Bitcoin is rising. Yet as more and more virtual “miners” look to make their fortune in the cryptocurrency market, their byte-sited efforts are creating massive power demands. This can be an issue in bulk metered properties, where all it takes is one Bitcoin miner’s activities to drive up the cost of everyone’s bill.

“Bitcoin mining is a growing concern for Property Managers in bulk metered buildings,” says Andrew Beacom, President and CEO of Priority Submetering Solutions. “Not only is it contributing to higher electricity consumption, it is also increasing the building’s demand. That means the building as a whole is paying higher rates for electricity and the delivery of that electricity. “

For the uninitiated, a Bitcoin is a unit of virtual currency that is rewarded to “miners” who use specialized computer software to solve complex calculations that are part of the Bitcoin network. The main appeal of this network is that it is not owned by any one entity, making Bitcoin a decentralized digital currency. That means Bitcoin owners can trade units

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among themselves without the need of an intermediary (e.g., a bank).

So, what does this have to do with electricity bills? For one, it takes significant computational power to be a Bitcoin miner; ergo, it takes a lot of electricity to keep the process going.

According to the tech website Digiconomist, each Bitcoin transaction requires 235kWh, which is enough to provide power to a home for nine days.

And considering that Bitcoin miners generate an average of 75 Bitcoins an hour, it’s estimated that the Bitcoin network alone consumes an annual rate of 32TWh – or about as much energy used each year by the country of Denmark.

In short: Bitcoin mining may be the future, but it’s also becoming an energy drain.

AN ISSUE CLOSE TO HOME Bitcoin was the first cryptocurrency unit in the world when it was introduced in 2009. Since then, it has been joined by countless other players such as Litecoin and Ethereum (to name a few). What this means for the

property management industry is that cryptocurrency mining is no longer a niche activity; and if managers and owners haven’t felt the impacts yet, it’s only a matter of time.

As Bitcoin mining becomes more mainstream, the challenge for all bulk metered property stakeholders will be to address the costs. This, says Andrew Beacom, is where it makes sense for stakeholders to get ahead of the game and to move to a “user-pay” system that protects both properties and residents.

“A user-pay system involves residents having their own individual meter so that they only pay for what they use.

You wouldn’t want to pay for your neighbour’s grocery bill or pay to fill up their car so why would you want to pay for their electricity?” says Beacom.

Indeed, by billing tenants fairly for their individual energy usage, those that decide to make a virtual buck are not making the decision to raise the cost of electricity for everyone else.

NO PASSING CRAZE If you’re counting on the cryptocurrency fad to fizzle out, you might be waiting a while. As other cryptocurrencies jockey to become a worldwide standard, and more and more retailers and consumers begin to adopt digital currency, the future will include Bitcoin mining of some form or another.

Right now, notes Beacom, the reality is that Bitcoin miners need to be on condo managers / owners’ radars: “Bitcoin is no momentary fad; its popularity is increasing vastly and appears to be here to stay. As goes the Bitcoin price, so goes its electricity consumption and the cost associated with that should not be subsidized by anyone but the miner themselves.”

Andrew Beacom is the President & CEO of Priority Submetering Solutions, a licensed, full-service utility Suite Metering and billing company serving multi-unit buildings across North America.

For more, www.prioritymeter.com.

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www.REMInetwork.com | March 2018 33

ENERGY MANAGEMENT

A case study in cogeneration At least one condo building in the GTA won’t face the

perennial dilemma of when to switch

BY PER POLDERMAN

over its HVAC system from heating to cooling this spring.

Its heating and cooling are available all year round, with one minor exception: cooling is disabled when the temperature outside dips below minus 10.

The 300-unit condo building runs on cogeneration or combined heat and power (CHP), which is basically like an on-site power plant. CHP installations feature natural gas-burning engines, which generate electricity efficiently, capturing and using the waste heat created in the process.

The process of generating electricity on site costs less than what

34 CONDOBUSINESS | Part of the REMI Network

building owners pay to obtain it through the grid from local utilities.

And if the electricity generated on site exceeds the needs of the building, the building owners can export the excess electricity to the grid, where they can sell it to local utilities.

The 300-unit condo building is doing just that. Its 350-kilowatt CHP installation is able to satisfy demand for heat and domestic hot water

ENERGY MANAGEMENT

for the whole building, which does not have a boiler. Deep geothermal wells work with ground-source heat pumps to create chilled water for the fan coils, which produce the building’s cooling. The building can also operate in “island mode,” whereby the cogeneration installation sustains the entire building on electricity when the grid goes down and power gets knocked out, recovering heat from the generator, as long as natural gas is available.

As shown in this case, CHP can be used to efficiently supply domestic hot water to a building, offset some of its electrical load and power emergency systems during power outages. These installations may even have extra capacity to power non-emergency systems during power outages thanks to energy-saving technologies such as LED. CHP can be part of the original design of the building, as was the case here. Projects like this may be eligible for incentives for highperformance new construction — high performance meaning that the building is more energy efficient than its base design.

CHP can also be a retrofit solution for an existing building. Buildings that have old back-up generators due for major retrofits or replacement are good candidates for cogeneration.

These opportunities can be identified in a comprehensive energy audit or a preliminary or detailed engineering study. There are incentives available to implement a CHP system that has at least a 70-per-cent overall system efficiency in converting natural gas into hydro and using recovered waste heat. Efficiency can be far greater, depending on the amount of recovered heat being used to offset the building’s heating load.

In either case, proper engineering is required to make sure the system will work as designed and captures the expected benefits in the shortest possible payback period.

Costs can range from $500,000 for a small micro-turbine system that generates hydro and domestic hot water to multimillions of dollars for a system that can run in island mode. Most projects pay for themselves within five years.

Not having to replace an aging back-up generator can greatly reduce the payback time. What’s more, a CHP installation is a long-term investment as it generates revenue when excess electricity can be exported to the electrical grid and sold to local utilities.

Building automation systems (BAS) are used to control when the CHP will run, factoring in the price of electricity and the building’s heating and domestic hot water demands. The more waste heat that the CHP can put to use in the building, the more efficient the installation. The less waste heat the CHP can put to use in the building, the less efficient the installation. Excess heat must be vented outside to protect the CHP plant and heat pumps from overheating. The BAS ensures this occurs as needed and facilitates occupant comfort.

Once a CHP installation is set up, ongoing monitoring and optimization is advised to ensure all building systems continue running smoothly so energy savings and other benefits don’t disappear. It took a lot of commissioning work to keep the CHP installation at the 300-unit condo building functioning properly. 1 With a passion for energy conservation, Per Polderman, CEIT, serves as a senior account manager at Mann Engineering. For close to 30 years the leading energy management company has specialized in comprehensive energy audits, reserve fund studies, engineering reviews, BAS, incentives, HVAC design/build and energy retrofit needs. He can be reached at 416-550-3275 or ppolderman@mannengineering.com

www.REMInetwork.com | March 2018 35

LEGAL

When can condos enter bulk telecom contracts?

Many condominium corporations

enter into bu l k cont racts for telecommunication, and other services. Under

BY CHERYLL WOOD AND DAVID LU

these agreements, the condo corporation will purchase a service in bulk (for all unit owners and the common elements) from a supplier and will then add the cost to each owner’s common expenses (in accordance with each owner’s proportionate share).

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Using television services as an example, if the corporation enters into a bulk agreement, each unit owner will pay more in common expenses each month for the bulk service; however, he or she will not need to arrange for his or her own television service, and could save money as the expense may be lower than if the unit owner acquired the services independently, due to economies of scale.

What authorizes the condo to enter into these bulk agreements? Is notice of the change required? A recent court decision reviewed these issues.

In Zordel v. MTCC No. 949, the court reviewed the authorit y on which a condo corporation may rely in entering into a bulk services contract with a telecommunications provider. The court also reviewed the applicable notice requirements imposed on the condo corporation in relation to such a contract.

Metro-Toronto Condominium Corporation No. 949 (MTCC 949) was constructed in the 1990s and has, since the beginning, contracted for television services through a bulk services agreement. The charges for these services were passed on to the unit owners as a common expense and each owner paid his or her proportionate share.

In June 2016, MTCC 949 entered into a 11:05 AM new bulk services agreement that expanded the scope of the services to be provided to occupants to include both television and internet. Since the cost of the television and internet services was considered a common expense, unit owners were not able to opt out of paying their proportionate share of these expenses.

The applicant owners in this matter argued that MTCC 949 did not have the jurisdiction to enter into the bulk services agreement and pass the charges on to the unit owners through the common expenses without giving the unit owners the option of opting out. The applicants also argued that MTCC 949 was required to provide notice to the unit owners and/or involve owners in the decision, prior to entering into the 2016 agreement, because it constituted a change in services.

If certain conditions are met, condo corporations can enter into bulk purchase agreements The basis of a corporation’s ability to enter into bulk purchase agreements originates from the 1998 version of the Condominium

38 CONDOBUSINESS | Part of the REMI Network

McGregorAllsop_GTA_June_2016_FINAL.pdf

Act. Under section 2 of the act, “common expenses” are defined as expenses related to the performance of the responsibilities of a corporation and expenses that are specified as common expenses in either the act or in the declaration. If a condo corporation’s declaration confirms that the costs of a particular service constitute a common expense, the corporation can enter C into a bulk agreement for that service.

In Zordel, Schedule “E” of MTCC 949’s M declaration contained a list of specific Y expenditures to be included as common CM expenses. One of the listed expenditures was cable television. The applicants argued MY that the reference to cable television was CY to authorize the corporation to provide the CMY service on the common elements, not K within the individual units.

The court found that the reference to cable television in Schedule “E” meant “the provision of cable television services to units.” The basis of this finding was that cable television was included in the same list as water and electricity services. The court found that if cable television was not intended to be provided to each individual unit, and was instead only intended to be provided on the common elements, this intention would have been expressly stated in the declaration.

The applicants also argued that the expanded scope of the agreement to include internet services was beyond what was contemplated in the declaration.

MTCC 949’s general bylaw gave the condo corporation authority to “enter into a bulk telecommunications agreement.” The applicants argued that such a bylaw was contrary to the act, and thus MTCC 949’s decision to acquire internet services on a bulk basis was invalid.

The court found MTCC 949’s decision to enter into a bulk agreement for television and internet services was valid. The judge found the explicit wording in the general bylaw and the declaration gave the corporation the necessary authority to enter into the agreement for both television and internet services.

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The judge found that MTCC 949 met the notice requirements in the act Under the act, a corporation must notify unit owners of changes to common elements or assets if certain conditions are met. The relevant provisions are contained in section 97 of the act. In Zordel, the applicants

www.REMInetwork.com | March 2018 39

LEGAL

When assessing whether notice to the unit owners is required, the cost of the

change itself (and not the total cost of the project or agreement) is the relevant cost to be assessed argued that MTCC 949 should have notified the unit owners of the change and/or sought approval from the unit owners before signing the bulk services agreement. The applicants argued that the new agreement used a different technology to deliver television service, and/or the increase in cost for the new service triggered the notice requirements under the act.

The court found that MTCC 949 met the notice requirements. First, the court found that “a different technological delivery method … does not change the service

itself.” Second, it was held that the increase in fees as a result of the new bulk services agreement did not trigger the notice provisions of the act.

T he c o ur t c o nfir me d th at w hen assessing whether notice to the unit owners is required, the cost of the change itself (and not the total cost of the project or agreement) is the relevant cost to be assessed pursuant to section 97 of the act. In Zordel, this meant that the cost associated with the internet services only was the cost to be considered under section

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Important guidance from Zordel For condo corporations that are interested in entering into a bulk services agreement for telecommunication services, Zordel identifies important considerations that corporations should keep in mind when making the necessary arrangements. In particular: 1. If t h e a c t o r d e c l a r a t i o n l i s t s telecommunications as a common expense, and does not explicitly state that the expenditure relates only to the common elements, the corporation can enter into a bulk agreement for both the common elements and the units.

2. T he corporation’s declaration and bylaws can be relied on to support a condo corporation’s authority to enter into bulk agreements.

3. Consideration must be given to the notice requirements under section 97 of the act when undertaking a change to the common elements or the services being offered to the unit owners.

4. However, when assessing whether notice is required under section 97 of the act, only the cost of change is relevant, and not the total cost to be incurred. 1 Cheryll Wood is an associate at Davidson Houle Allen LLP, and has been practicing condominium law for five years. She represents condominium corporations, their directors, owners and insurers throughout eastern Ontario.

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Tenants remain outsiders in condo communities How do condo managers refer to

BY MICHELLE ERVIN

the people who live in the communities they manage? Are they categorized as owners and tenants, or are they simply called residents?

42 CONDOBUSINESS | Part of the REMI Network

MANAGEMENT

For Bill Thompson, president of Malvern Condominium Property Management, this language choice is telling. Little has changed in the way condo communities and their leaders treat tenants in the last few decades, he suggested, speaking last fall in a Condo Conference seminar on tenant issues.

“Rental units have been part of our reality for over 25 years and they still are not part of the community,” Thompson said as he reflected back on sentiments he shared in a 1992 article.

At the time, he said, roughly three out of every 10 condo units (29 per cent) from Oakville to Ajax, Pickering and up to Georgian Bay served as rental units.

Last fall, Urbanation, a real estate market research and consulting firm, found that close to a third of condo units (32.7 per cent) in the GTA served as rental units in a review of 2017 Canada Mortgage and Housing Corporation (CMHC) data. If large tenant populations in condo communities seem like a more recent development, it may be because that figure is up from 18.8 per cent 10 years ago. What’s more, many newly completed condo units are making their way onto the tight GTA rental market.

Tenants appear likely to remain a fixture of condo communities, so what can condo communities do to help tenants shed their outsider status?

The people behind the stereotype Brian Zander, president of his Humber Bay condo corporation and a tenant himself, has some ideas about how to make renters feel more welcome. He recommended making an effort to relate to tenants on a personal level rather than relying on stereotypes of renters as the resident trouble-makers.

“It’s not like they just showed up one day hoping to make problems for the property manager,” said Zander. “Most of them chose to live in that building.”

He spoke, for example, of Elise, a divorcée who, after falling in love with the Lakeshore area while visiting a friend, opted to rent in a pet-friendly condo building there as she sorts out her retirement plans in the next several years. And of Lee and Jessica, newlywed professionals who decided to rent downtown while their house is being built in Oakville — and for whom only a new condo could offer the amenities on their must-have list. As well as of Michel, who moved into a North York condo after being transplanted from Montreal to Toronto in just weeks for a new job, and who faced the possibility of having to relocate again in the indeterminate future.

These tenants hardly fit the caricature of renters as hardpartying transients. They are professionals who have something to offer their condo community, said Zander, whether that’s in a formal or informal capacity.

“Not every tenant is going to be super excited about participating on the board or in a committee,” he acknowledged, “but if you get to know them as people … I think that would help with engagement and help them feel like they’re respected, and they will in turn respect the rules of the corporation.”

Why are renters breaking the rules?

Tenants have to be aware of a building’s rules to be able to follow them, as Thompson illustrated with some “fictional but familiar” examples that, on passing glance, might be easy to write off as renters behaving badly.

Consider the case of a condo board that creates and regularly updates a community website, which includes a copy of the corporation’s rules, he said. If the board restricts access to owners, is the ensuing parade of complaints about rulebreaking tenants surprising?

Or, he said, take an owner who neglects to share their condo community’s regulations, exposing their unwitting tenant to a flurry of enforcement by building management and security staff. In his first few days, the tenant feels targeted after receiving written warnings cautioning against parking in the visitor spaces (people helping him move) and to follow recycling protocol for disposing of cardboard boxes (his last building’s rules were different), along with a verbal warning from security to shut down a late-night get together due to noise complaints (housewarming party).

And there are instances where tenants are living with mental illness, unbeknownst to building management. Thompson painted a scenario involving unexplained banging noises, yelling and a broken window, which were ultimately traced back to a renter suffering from schizophrenia and who was put up in the unit by a family member.

“I find more and more often these days that people are leaving their relatives in a condo environment thinking that this is a relatively safe environment for the semi-vulnerable,” he said. “Well, semivulnerable generally means disruptive to the community.”

People living with mental illness are protected from discrimination under the Ontario Human Rights Code, although there are rare cases when efforts by condo corporations to

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MANAGEMENT

accommodate individual needs cross the legal threshold of undue hardship.

Courts weigh in on tenant issues Of course, there are instances when tenants are well aware of the rules and choose to flout them. Greg M arley, partner at Deacon, Spears, Fedson & Montizambert, recommended looping in owners as soon as possible when addressing rule - breaking renters.

Not only can owners act as allies in obtaining compliance, but this positions the condo corporation to recover its enforcement costs.

Marley observed that in the recent case of TSCC No. 2032 v. Boudair, et al., the judge cited the over-eagerness of the condo corporation to bring a compliance application.

The tenants, who were willfully ignoring the community’s smoking ban despite the owner’s best efforts to get them to follow the rules, were ordered to pay fixed costs to the corporation and the owner. However, Marley added, the corporation retained the right to charge back the owner for its costs because it had laid the groundwork to lean on

a provision of the Condominium Act that is the only order capable of compelling leaves owners on the hook for the actions compliance.

“There’s no guidance yet as to what of their occupants.

In the Boudair case, the tenants agreed another order that would be adequate to to an order terminating their lease. address the situation is,” he explained, Another recent case, NNCC v. Temedio, “so we’re in a grey zone right now and confirmed that eviction orders, like forced we’re going to have to wait until we have unit sales, are “draconian” and “extreme.” some condos that unfortunately have to In the Temedio case, the tenant was take this through the court system.” found to have violated a rule prohibiting excessive noise over a period of two More work to be done on inclusion years. For Marley, it was notable that Thompson suggested there’s more work the judge denied the Niagara condo to be done to include tenants in condo corporation’s request for an eviction order communities, pointing out that there is an in favour of a compliance order despite economic imperative to do so: it will help improve property values by making them the length of the infraction.

However, Marley added, recent reforms more attractive places to live and thereby to the Condominium Act, which are not making it possible for owners to charge yet in force, might streamline the process higher rents.

“What changes would you make in of obtaining eviction orders. The reforms call into question the existing two-step your management style to help make this process of obtaining a compliance order, change possible?” he asked.

Choosing to call the people who live in and then returning to court to ask for an eviction order following continuing non- a condo community residents rather than compliance. New wording will restrict categorizing them as owners and tenants the availabilit y of eviction orders to might be a simple place to start. 1 1 2017-02-01 10:36 cases where a judge determinesBrownBeattie_GTA_March_2017_FINAL.pdf that it

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Rich amenities make up for shrinking suites Investors, developers, and builders are

scrambling to keep pace with surging demand

BY DOMINIC DEFREITAS

for multi-family housing as condominium sales hit an all-time-high last October.

The economic realities of development today have meant that suite sizes have had to shrink, and multi-family developers are creating amenity-laden buildings to compensate. It’s clear that residents across multiple generations are willing to trade in-unit square footage for common area spaces that complement their lifestyles.

Design should be leveraged to create holistic living spaces that transcend passing fads and recognize that residents want

more than just four walls and a roof over their head. Here are four key lifestyle trends that will shape how builders, developers, and architects approach their projects in 2018: Parcel pending The rise of online shopping is disrupting more than just bricks and mortar retail; it’s quickly become the consternation of condo concierges across Toronto.

46 CONDOBUSINESS | Part of the REMI Network

Piles of packages and parcels mount up behind desks, creating a mess and chaos.

The design solution? Factor in dedicated storage to handle the daily stream of deliveries, including cold storage lockers so groceries can be delivered at any time and remain fresh when residents collect them. Alongside this, mobile apps have allowed couriers and concierge desks to alert residents to deliveries.

Recognizing this, developer CentreCourt is creating Toronto’s first condo tower with a co-working space as part of the building’s amenities. The 4,000-square-foot space, complete with printers and private meeting rooms, will remain open 24 hours a day.

Flexible amenity spaces With millennials now outnumbering other generations in Canada, by default they’re the largest group in the multi-family residential sector too. They’ve grown up with the ability to customize almost everything in their lives.

Not surprisingly, they want to be able to customize their physical environments too.

Increasingly this is reflected in how lobbies and amenity spaces are being considered.

These spaces should have flexibility built into them with demountable walls and screens, along with smart layouts that let residents book different areas without the whole area suddenly being off-limits to everyone else.

Fitzrovia Capital, the developer behind 390 Dufferin St., is taking this approach to its amenity spaces. Fluid, flexible spaces create a democratic common space that signals to all residents they’re welcome to use it how they like.

The hassles of storing and managing, the problem of loss or theft, and the everyday frustration of having to rush home before the management office closes are now a thing of the past.

The Well, a transformative mixed-use redevelopment in downtown Toronto, has given over ample space to meet the realities of the way urbanites shop today.

Co-working spaces The boundaries between work and home have never been more blurred. The rise of the freelance life, the portfolio career, and the side gig means that today’s condo residents want something different from their building’s public spaces. They want flexible arrangements that let them work from home on their laptop and mobile phone; they just don't want to do that alone in their living room.

Elevated fitness facilities People want to feel connected to each other, to their neighbourhood and to their homes.

They also want their homes to provide respite from the world and to recharge them.

What better way to meet both of these deeply held needs than a spectacular gym and fitness facility?

Take, for example, RioCan and Woodbine’s joint venture at The Well, which will be providing residents with a 6,000-squarefoot gym on the 46th floor of the building. In addition to a spectacular view, the gym will offer a flexible workout space designed to be able to offer residents a wealth of classes, from yoga to Crossfit, and in so doing allowing neighbours to connect with one another in their vertical village.

Relegating the gym to a below-grade, joyless bunker no longer passes muster.

Solving for the challenges of how people live now results in developments that rise above the faddish, and instead meet the deeply held needs of what residents really want from their homes. 1 Dominic DeFreitas is VP of residential development at figure3.

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REGULATIONS

Condos look for energy reporting loopholes Some condo boards in Ontario are looking for loopholes to the coming

BY MICHELLE ERVIN

requirement to annually report the overall energy

and water use of large buildings, but there are none to be found for those captured by the new regulation under the Green Energy Act. Owners of multi-residential buildings that house more than 10 units and span more than 100,000 square feet will be obligated to file their first report by July 1, 2019, for the 2018 calendar year. Owners of multi-residential buildings that span more than 50,000 square feet will be obligated to file their first report by July 1, 2020, for the 2019 calendar year.

Nancy Houle, partner at Davidson Allen Houle, sympathized with condo boards and managers who have to add this to their to-do list, pointing out that they are wading through a sea of change ushered in by recent condo law reforms, which introduced some annual reporting requirements of their own.

“While it’s [the requirement to report energy and water use] good for the environment, it’s an additional burden on condo boards and managers who are just trying to get done everything that they have to,” she said. “The theme of the questions is really: Is there any way our condo doesn’t have to report?”

The short answer, from the Ottawa-based condo law firm, is no. The requirement for large building owners to annually report their overall energy and water use is just that — a requirement, said David Lu, an articling student at Davidson Allen Houle.

“Although the regulations don’t include enforcement mechanisms at this time,

48 CONDOBUSINESS | Part of the REMI Network

this does not mean that condominium corporations can pick and choose as to whether to comply,” he said.

L u e x p l aine d th at ig n o r in g le g al obligations could constitute a breach of condo board directors’ duty to perform t h e i r ro l e d i l i g e nt l y, h o n e s t l y a n d prudently. What’s more, he said, an owner could force them to comply by taking them to court — and it may be relatively easy to find out whether a particular condo corporation has been filing.

The Ministry of Energy said in an email that ‘non-filers’ could be named and prevented from accessing money set aside to offset the

REGULATIONS

upfront costs faced by building owners who undertake utility bill-lowering projects.

“Buildings that fail to report may be listed publicly on Ontario’s Open Data catalogue as a non-filer,” said the ministry. “Non-filers may be ineligible for energy efficiency incentives in the future.”

Ontario’s Open Data catalogue will also house information about the buildings whose owners have fulfilled the requirement to report their energy and water use, including their address and measures of their energy performance. The data that building owners report in their first year of filing will remain private as they establish their baseline results.

Mandatory energy and water use reporting will give owners a sense of how their building is performing compared to other buildings of the same type as data is publicly shared. This visibility may also motivate poor performers in particular to take steps to improve their building’s operations.

“By identifying and benchmarking a condominium’s energy and water use, condominium corporations can identity cost effective opportunities to reduce energy costs which can benefit all condominium owners,” said the ministry.

Ontario is following the example set by jurisdictions including Chicago and New York. The provincial government introduced energy and water use reporting requirements to public sector buildings first and will now roll out the requirement to large commercial, industrial and residential buildings over the next three years.

Owners of the largest commercial and industrial ConRep_Condo_April_2016_FINAL.pdf buildings will be the first private sector group to face the filing obligation

416 230 1132 conrep@sympatico.ca

2576 Dunwin Drive Unit 7 Mississauga, ON

1

this year, and the requirement will ultimately apply to around 18,000 buildings.

Rob Detta Colli, manager of energy and sustainability with Crossbridge Condominium Services, said the vast majority of the buildings in his employer’s portfolio, which are concentrated in the GTA, will likely face the filing obligation in 2019. He said condo corporations can get a rough idea of whether their buildings are considered large for the purposes of mandatory energy and water use reporting by using 50 units as a yardstick for the 50,000-square-foot threshold and 100 units for the 100,000-square-foot threshold.

Whether a quick way to calculate gross floor area will be made available to condo corporations is one of the logistical considerations that have yet to be worked out, as is the process for obtaining energy and water use data from utility companies, who will be legally obligated to supply this information.

In the meantime, Detta Colli said he is advising condo corporations to wait for commercial and industrial building owners go through their first reporting period this year and details like these to get ironed out.

What does appear to be clear at this point is that, while condo corporations may instinctively look to their condo managers to fulfill this requirement on their behalf, managers likely lack the technical expertise to do so. Detta Colli explained that this is an area where, much like condo corporations engage lawyers in legal issues, they will likely need to engage consultants with the knowhow to help them report the overall energy and water use of their buildings. He said it’s not as2016-04-29 simple as looking at utility bills and using a 11:12 AM tape measure — the data must be input using

ENERGY STAR Portfolio Manager, an industry standard software tool developed by the U.S. Environmental Protection Agency specifically for benchmarking.

A nkush Randhawa, new product development manager at Enercare, said that whomever condo corporations work with, it’s important to leave time for building data to be collected and verified to avoid a last-minute scramble to meet the filing deadline.

“The opportunity here is not just to be compliant, but also to use this exercise for better understanding your building’s energy use,” Randhawa added. “Apart from the compliance and the environmental concerns, the financial benefits of energy management can be quite attractive.”

Energy and water use represent major costs for condo corporations, generally accounting for around half of maintenance fees, Detta Colli observed. It follows that the public sharing of consumption data could have a positive impact on property values in high - per forming buildings, which are likely to be more attractive to prospective buyers not just from an environmental perspective but also from a financial perspective.

More broadly, he said mandatory energy and water use reporting could shift the focus of condo corporations from replacing equipment to running equipment more efficiently, noting that incentives that have long prioritized retrofits, leaving operations-oriented energysaving opportunities untapped.

“The analogy is the efficient car,” Detta Colli explained. “If you’re not an efficient driver, then your car won’t be as efficient as it was designed to be.” 1

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NEW AND NOTABLE

Misin(form)ation Responding to a records request? There’s a mandatory form for that now. In fact, there are more than a dozen new mandatory forms for carrying out the affairs of condo corporations.

They’re meant to standardize processes such as appointing proxies, but in their current, well, form, they’re causing headaches for board directors and their legal counsel New mandatory forms for carrying out certain activities in condo corporations in Ontario have attracted criticism from board directors and lawyers for being hard to find, understand and use. These frustrations were on full display at a CAI Canada seminar held Feb. 28 in Toronto on understanding the recent changes to Ontario’s condo laws that introduced the forms.

David Crawford, a condo owner and director, said he liked the idea behind the forms — of communicating with owners about the corporation, including alerting them to board vacancies and inviting them to submit agenda items for upcoming annual general meetings.

However, he said the way the forms present this information is confusing.

“My problem as an owner is I’m going to receive forms which I don’t understand,” said Crawford. “My problem as a board director is I’m going to have to try and explain forms which, frankly, I don’t understand, so please, please, please: fix the forms, and fix them soon.”

Condo lawyer Rod Escayola, partner at Gowling WLG, drew particular attention to the proxy form.

Escayola said the two check-box choices given to owners appointing people to attend meetings on their behalf, one for quorum and one for voting, have raised questions about whether proxies authorized to vote can do so if the owner fails to provide voting instructions.

“When you look at the instructions, it says here, ‘Your proxy may only vote for the individuals whose names are set out above,’ so if you left it blank, what to do you do?” he said.

“Some people say, if there’s no name, that counts only as quorum, but we have a box already for quorum.”

Despite the early challenges, which have included finding and viewing the forms online, Escayola said that he’s confident that these details will get resolved, adding that the forms are meant to standardize processes such as responding to records requests, which should bring predictability and peace.

Andrew Fortin, senior vice president of external affairs at Associa, a condo management company that has gone through similar legislative changes in other jurisdictions, said providing feedback to regulators is an important part of the process.

“If they don’t hear the feedback about what’s working and not working, then we’re going to be stuck with what we have,” said Fortin.

Marko Djurdjevac, counsel in the civil law division at the Ministry of the Attorney General, told seminar attendees that his colleagues at the Ministry of Government and Consumer Services, including one who was in the audience taking notes, are listening to feedback about the forms.

“Everything that I hear today will be relayed back to my client groups in the government, the policy folks working on the condominium reforms,” said Djurdjevac.

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