Canada’s Most Widely Read Condominium Magazine
October 2018 • Vol. 33 #5
Fate of outstanding changes to Ontario’s condo laws unknown
PA R T O F T H E
Hosting office hours, preparing for AGMs and starting a community blog
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Contents FOCUS ON: GOVERNANCE
Post-occupancy hitches prompt office hours
So you want to start a community blog
Skin in the game By Marc Bhalla
Condo file changes hands By Michelle Ervin
Legal Medical cannabis a prescription for uncertainty By Barbara Carss
General operating bylaws due for update By Danielle Swartz and Natalia Polis
Why anti-SLAPP provisions should give condo corps pause By Carol Dirks
Management Standing out among licensed professionals By Kristy Joplin
Maintenance Takeaways from #TorontoFlood
Regulation Inclusionary zoning revisited
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Looking ahead What does Ontario’s new Progressive
Conservative (PC) government have in store for the condo sector? It’s hard to know. But the fact that the PCs have been quiet on the condo file so far may be telling in and of itself: clearly, it’s not at the top of the new government’s agenda. In fairness, as condo lawyer Armand Conant pointed out to me in a recent interview, it’s also a complicated policy area. It could well be that once the new government gets up to speed on the condo file, it will come to similar conclusions as its predecessors: an increasing number of Ontarians are living in condos and the legislation that protects these consumers needs to be strengthened. Hopefully the new government doesn’t conflate condo issues with Toronto issues. It would be easy to do so, given the concentration of development in the downtown core, and the PCs paved their way to victory in suburban and rural ridings, not the city proper. What’s more, Premier Doug Ford has never shown a particular fondness for “downtown elites.” Ontarians across the province live in condos of all shapes and sizes — they’re not just high-rise building residents in the downtown core, they’re townhouse residents in Milton and beach house villa residents in Muskoka. One of the most urgent items of business for the new minister of government and consumer services to address on the condo file is the outstanding changes to Ontario’s condo laws planned by the previous government, which are the subject of this issue’s cover story. My specific questions as to the new government’s intentions, priorities and timelines for provisions of the legislative reforms that are not yet in force elicited a general statement affirming its commitment to consumer protection. I also spoke to industry experts, who shared their insights into the outstanding changes, including which provisions the new government ought to prioritize. Also in this governance-themed issue are a number of articles that include the voices of condo board directors. Plus, you will find an excerpt from a REALPAC white paper on inclusionary zoning. REALPAC, which represents Canada’s real property sector, is taking the change in provincial government as an opportunity to ask the new administration to revisit inclusionary zoning with a view to addressing some of the concerns it has with the regulations passed by the previous administration. There may likewise be opportunities to improve upon what the previous administration had in store for the condo sector. Perhaps the PC government will also take a look at issues that have emerged in the interim, such as the recent cancellations of condo developments. Michelle Ervin Editor, CondoBusiness firstname.lastname@example.org JTB_Condo_March_2017_FINAL.pdf
Publisher Maya Merchant Editor Michelle Ervin Advertising Sales Liam Kearney Kelly Nicholls Melissa Valentini Senior Designer Annette Carlucci Production Manager Rachel Selbie Contributing Writers Marc Bhalla, Barbara Carss, Carol Dirks, Kristy Joplin, Natalia Polis, Danielle Swartz, Ben Zelikovitz 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 email@example.com. Circulation Department Anthony Campbell firstname.lastname@example.org (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: email@example.com 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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A cheat sheet for AGM planning Annual general meeting (AGM) season is in full swing, and many corporations are hosting
BY BEN ZELIKOVITZ
their first AGMs under new rules. Ben Zelikovitz, co-founder of GetQuorum, answers: What should boards know about preparing AGM notices? For most people, the CNE, Labour Day weekend and kids going back to school mark the end of summer. For condos, they mark the beginning of AGM season. This fall, many corporations will be holding their first AGM since amendments to the Condominium Act came into effect. A lot of boards have questions about what should be included in the preliminary and AGM packages under the act’s new requirements. What follows is a look at the new requirements for preparing for AGM notices, along with some best practices. Preliminary notice package The preliminary notice package must be sent to owners no later than 35 days before the AGM (or, 20 days prior to the AGM package). The preliminary notice must include a completed Preliminary Notice of Meeting of Owners form as well as a blank Candidate Disclosure form. There is a prescribed Preliminary Notice of Meeting of Owners form, but there is no standardized form for Candidate Disclosure, which must be completed by those interested in becoming a candidate for the board of directors. It’s optional but recommended that the board or property manager include a cover letter in the preliminary notice package. The cover letter can include information owners should know, such as the date of the upcoming meeting, an overview of the candidate nomination process, a summary of the business to be conducted at the meeting and an explanation of the corporation’s legal requirement to provide the preliminary notice. Another optional step is to include a templated Board of Directors Nomination and Resume form. This encourages nominated candidates
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to provide pertinent details about their background and professional experience relevant to their candidacy for a board position. AGM package The AGM package must be sent to owners no later than 15 days prior to the meeting. Many corporations use a roughly 17-day notice period, adding two days to account for the day of mailing and the day of the meeting. AGM packages must include a completed copy of the prescribed Notice of Meeting of Owners form as well as any board candidate resumes and nomination and disclosure forms. In addition, AGM packages should include an itemized agenda for the meeting, the previous year’s AGM minutes, audited financial statements and a blank copy of the prescribed Proxy Form. Many corporations also include a cover letter from the board of directors or property manager to set the tone for the meeting. The cover letter typically summarizes the corporation’s financial status and overall well-being, maintenance and project updates and any other important business being addressed (e.g. bylaws) at the meeting. Including an information circular is recommended as it helps owners understand general meeting protocol, how proxies are used, their individual right to vote and the board positions open for election. Many property management firms have proprietary versions of this circular. Condos may wish to distribute preliminary and AGM notice packages electronically. For corporations that haven’t done so already, they will need to get consent from owners to do so first. 1 Ben Zelikovitz is co-founder of GetQuorum.
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Post-occupancy hitches prompt office hours The condo board was making all the gestures of a governing body committed to transparency.
BY MICHELLE ERVIN
It circulated board
meeting minutes as a standard practice, unprompted by records requests, and it distributed newsletters to keep owners current on the affairs of their condo corporation. But the frustrations of going through the post-occupancy growing pains of getting deficiencies resolved in the more than 400unit building were palpable, said Alexandra Cote, president of the West Queen West condo board. So Cote and her fellow directors decided to offer owners a forum to bring their concerns and suggestions. The board began hosting ‘office hours’ — technically, a half hour — immediately before its monthly closed-door meetings where corporation business gets carried out. “We thought it would be the best way to have some face-to-face time, and let people
meet the board and put a face to a name, express their concerns, their frustrations, and really have an opportunity to feel heard instead of just an email acknowledgment of, ‘Yes, we’re working on it,’” said Cote. Setting up office hours Condo boards are bound by confidentiality in certain matters, so conferring with legal counsel and property management was an important first step in setting up office hours, Cote confirmed. She said that apart from updates that may be available, the board is generally limited to going over information
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that has already been shared with owners in other formats. Every month, a week before the board is due to meet, property management emails owners inviting them to attend office hours. Owners who plan to attend are instructed to submit the issue they’re hoping to discuss, which gives the board a chance to prepare, including doing background research and consulting legal counsel as needed. “To date, there hasn’t been anything t h a t ’s c o m e i n t h a t h a s n’ t b e e n appropriate to talk about, but if there is, that’s why we ask for agenda items in
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advance,” said Cote. “Mostly it’s about privacy, so if they want to complain about another unit specifically, it’s not appropriate for other owners to be hearing about that, so we’re mindful about that.” As board president, Cote kicks off office hours with opening remarks before turning over the floor to the owners who have gathered in the party room, who are invited to address the board similar to the Lionheart_Condo_March_2017_FINAL.pdf way citizens speak to agenda items before
their municipal councils. Different directors will respond to different issues based on their areas of expertise — for example, the treasurer tackles financial topics, she said. Afterward, the board documents what gets discussed during office hours in its meeting minutes, including any follow-up that may be required. Hot topics of interest 2017-02-16 AM In1 their first few 10:40 months, the office hours
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have attracted just a few owners at a time, said Cote. A dysfunctional elevator has been a hot topic, even though, as she pointed out, the West Queen West condo is far from alone in its experience. However, as months passed, owners started to question why it was taking so long to fix the dysfunctional elevator, despite regular email updates, Cote recalled. In addition to allowing owners to air their frustrations, office hours have given the board a platform to dispel misconceptions and explain delays, she said. In the case of the elevator repair, the cost is covered under the new home warranty program, so the corporation is not paying for it — contrary to misconception — and the sources of delays — namely labour and parts shortages — are beyond the board’s control. “I find people come with a lot of energy, and once they see the faces of the people that have been working on this issue, they understand,” said Cote. “We’re all residents of the building, we’re all owners in the building, and they get it, that we are just as frustrated as they are, and we are real people doing our best.” Inviting owners to attend office hours has also helped humanize the volunteer directors, she said, observing that it has provided reassurance that the board is made up of people who have a stake in the corporation following recent news reports of non-owners co-opting boards in other communities. Plus, Cote added, office hours have given owners a chance to bump issues up the to-do list. In one case, the board was able to implement a quick fix — instructing property management to talk to a commercial tenant — after an owner alerted it to the nuisance that was being caused by delivery trucks honking to announce their arrival in the laneway. Measuring the community impact It has only been a few months now, but Cote said hosting office hours has so far been a positive experience, breaking down perceived barriers between the board and owners. “Opening up the door and saying, ‘Listen, we’re here, we’re accessible, you can come speak to us anytime,’ really disarmed a lot of feelings,” she said. “It really helped build more of a sense of community and partnership with the board instead of this othering that was happening.” 1
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So you want to start a community blog Condo boards in Ontario are currently wading
through an alphabet soup of new â€œinformation certificates.â€? PICs, which is short for periodic information certificates, require boards to regularly communicate to owners about key aspects of the affairs of their corporation, such as its financial status.
14 CONDOBUSINESS | Part of the REMI Network
The information certificates, established by recent legislative reforms, arose out of a review of Ontario’s condo laws, which identified a need to improve communication in condo communities. PICs and their counterparts establish a minimum standard of what boards need to communicate to owners and when. But some directors are finding there are benefits to communicating more information, more often. Andreea Birloncea, president of a Toronto-area condo board, is one such director. CondoBusiness recently spoke with Birloncea via email about the blog she started in her community.
that the best way to let everyone know what was happening was not with short notices in the elevators, but by creating a blog that informs, educates, and involves residents. The blogging began on Jan. 5, 2016, and so far has 119 posts. The blog now gets more than a thousand hits per month, so we’re happy to see that residents (and others!) are regularly checking in! I’ve always believed that information and transparency can help people understand why decisions have been made, and once residents understand our reasons and/or requests, they are more likely to happily and positively be a part of our community. When did you start the blog? Why? It’s also a way for us to reassure residents It evolved from the creation and launch of that we’re listening to them. Every time our website, www.EmeraldCityOne.com. At we’ve made a decision that enough residents first, the website was a tool for items such have passionately contested, we’ve been as bookings, corporation documents such enthusiastic about doing further research, as the declaration and bylaws, registration polling residents, and explaining to them why forms, contact information, etc. We then we’ve come to the decision in the end. listened to DelProperty_Condo_March_2018_torevise.pdf feedback from residents, and they Ultimately, it’s a great wayPMto be heard and 1 2018-04-13 2:44 all wanted more communication. I figured make sure that residents also feel heard!
What’s involved: Who posts? How often? About what? Everyone posts! Primarily, the blog has been my responsibility and I’ve posted the most; however, I've often asked staff and contractors to help me out with content when I feel that it would be better coming directly from them. Posts are always written by whomever I consider to be the most knowledgeable on the subject. Most often, my fellow authors are my superintendents, management staff, and security supervisor. We try to keep the blog fresh by posting at least every couple of weeks, but really it’s on an as-needed schedule — sometimes it’s more often and sometimes things are pretty quiet around here! The content of the posts varies a lot; some are necessary posts (for example, our most recent post about people abandoning pets on the property), some are fun posts (such as recipes, local spa discounts and social committee events), and some are follow-up posts or items that we feel our community could use a reminder of.
www.REMInetwork.com | October 2018 15
GOVERNANCE What has your experience been like? Has the blog helped achieve what you intended it to? My experience has been unbelievably positive so far. Maintaining the blog is a huge investment of my time as I try to be as thorough and regular as possible with posts, but it is also highly rewarding when I see residents who are happy. Being a director is often considered to be a thankless job, but I feel like my involvement in the community, website, and especially the blog have made being a director very
pleasant and rewarding. It’s incredibly re-energizing and fulfilling when I’m in the elevator with a neighbour and they thank me for increasing the communication, or discuss the website and the issues that recent blog posts have tackled. It’s especially nice to see that my extra involvement has caused such a ripple-effect and inspired so many residents to also get more involved and become aware of their home and community, and I really do love that I have gotten to know so many of my neighbours in the process. Living in a big
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condo can be ironically lonely, but in our condo, residents have really started to come together as a community thanks to the fact that they feel heard and respected, which has really changed the atmosphere to a truly positive one. Furthermore, the content has been educational for so many, and we’ve started to see a decline in the issues we’ve experienced (such as improper waste disposal). Also, because we discuss so many topics online, it keeps our AGMs shorter and more positive. AGMs are notorious for being the one and only opportunity for residents to “rant” at boards, but I believe that through our website and blog (and general willingness to be open and friendly), our AGMs no longer inspire fear in our hearts. Rather, it’s an opportunity for us to listen to concerns that residents h ave — c onc er ns th at are usu all y presented very nicely and fairly — and it often also serves as inspiration for future blog posts! All in all, I definitely believe that the blog has helped achieve what I intended it to — and more! I think it's one of the most important tools that we have in our community, and I value it tremendously. What advice would you give to other boards considering starting a blog in their community? Starting and regularly maintaining a blog is a commitment. On the one hand, it takes time, and that can sometimes be a challenge for someone who is already volunteering a lot of personal time to be on their board of directors. On the other hand, publishing a blog and being transparent about issues via posts also saves time, because directors will be getting fewer emails and/or complaints about issues, especially around AGM time. It’s also a great method for making sure that suite owners and residents feel heard, and also feel like a part of their community. I especially encourage boards to not just publish functional posts, but also posts that involve their residents (polls, giveaways, events, etc.). No one wants to read a “dry” blog — you’ve got to give it some juice! At first, boards may not see a huge difference, but they shouldn’t let that become discouraging! Little by little, residents will notice and they will appreciate all of the efforts made to inform, educate, and communicate. 1
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Skin in the game Many condominium communities aim to leverage the professional experience of their directors. Matching
BY MARC BHALLA
a director’s role with their expertise makes sense. If, for example, a member of the board has an accounting background, the treasurer’s
role would seem a better fit for them over someone without relatable knowledge to bring to the position. Many prospective directors share their resumes in the course of running for election to highlight how they may be able to apply their professional experience to contribute. What happens, however, when a prospective director has not only professional experience to offer, but professional experience in the condo industry? Are there additional benefits to the community, or drawbacks? An uneven playing field An advantage of having someone with ties to the condo industry serve on the board is that they can bring to the role understanding, connections and experience. No longer is the community limited to its property manager’s
Rolodex. Camaraderie amongst directors at the board level can include a heightened sense of understanding with the director’s condo experience available to draw upon. While there may be risk of stepping on the toes of property management, many managers express appreciation for working with directors who have condo-industry ties, citing their understanding as being helpful to staying on track at meetings and their connection base to offering an additional check and balance in decision making.
18 CONDOBUSINESS | Part of the REMI Network
While the ties a director may have to the condo industry outside of their ow n c ommunit y c an of fer b enefits, t h e y g i v e r i s e to h u r d l e s a s w e l l . Other directors may put the “industry insider” on a pedestal — granting them more control than they should — while other s m ay g row war y of a hid d en agenda. In either instance, the board risks moving away from the mindset of all directors being equal, which can be problematic.
While a condo community may be able to benefit from the insight of a condo expert serving on their board, it can be very important for the rest of the board — not to mention the director themselves — to appreciate their role in the boardroom and work within it. Returning to the example of a lawyer on the board, such a director may most appropriately contribute by helping determine when it may be appropriate to obtain a legal opinion rather than provide one personally.
they will be viewed as a free, in-house option for guidance in place of paid, professional help. For example, a lawyer serving on the board may be asked to provide legal advice to save the condo money. While free legal advice is often as valuable as what is paid for it, the protection offered to directors from attracting personal liability by relying on a qualified professionals under Section 37(3) (b) of the Condominium Act is hampered when the professional opinion comes from a board member.
Giving back or taking? Serving as a condo director can have a polarizing impact for an individual within a community. It is not possible to please everyone. While some will appreciate the effort, it is only natural for directors to make enemies politically. When a director has ties to the condo industry that extend beyond the community they serve, it can be all too easy for someone to allege a conflict of interest, ulterior motives or self-interest guiding board decisions they oppose. This can be exacerbated when there is misunderstanding about the impact the decisions of the board has on the director’s life outside of the community. What’s in it for them? Almost every condo director at some point is either asked or poses this question to themselves. Serving on a condo board can be thankless. Why would someone want to do it? Mistrust can easily be formed when this is not clear. However, when a condo industry expert is personally invested in a community, would it not make sense for them to be tempted to give back? Some may feel an obligation to do so, if not for the collective benefit of all owners, to at least protect their investment. A director is just a director A challenge for anyone with expertise to be leveraged in the boardroom is the risk that
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Professional fallout While some may wonder if the condo expert director could gain professionally from their role on the board, it would be a mistake to ignore what they have to lose. Consider a board that decides to terminate property management. While the average director may care less about the outgoing management company, a director with ties to the industry may face professional backlash if the outgoing manager is upset about their departure. To manage this — as well as to address perceptions of gaining professionally from board decisions — many condo industry exper ts who ser ve on boards excuse themselves from taking part in awarding m ajor c ontrac t s. T hey c an as sist in identif ying appropriate candidates for consideration, and leave the determination as to which one to go with to the balance of the board. This does not entirely prevent the risk of backlash, but it’s one way of allowing a condo to leverage industry expertise while ensuring that the community alone is considered in coming to a decision. While some do not like the notion of a director who is hesitant to fully contribute as a result of external factors, others see great value in what the condo expert director brings and considers steps they take to manage perceptions of conflict as a small price to pay for it. They view the director helping to identify capable prospective service providers as comforting. The delicate balance There i s n o q u e s t i o n t h a t t h e re a re complications when a condo director has ties to the industry, yet communities served by such directors can benefit greatly from their contribution. There are many ways to allow the community to leverage such expertise without crossing lines, but it’s important to establish boundaries to ensure that the contribution of an expert director is made appropriately. 1 Marc Bhalla Hons.B. A , C.Med, Q. Arb, MCIArb is a mediator and arbitrator who focuses his practice on condominium conflict management. He draws on his experience as a former condominium director to help troubled boards navigate internal conflict and otherwise applies his personal condominium experience to empathize with his clients. Marc can be reached at firstname.lastname@example.org.
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CONDO FI CHANGES There’s a different political party in charge at Queen’s Park, and the new PC government had yet to stake out a position on the outstanding Condominium Act reforms as of late October. For now, planned changes to rules for developers and finance remain in limbo BY MICHELLE ERVIN
22 CONDOBUSINESS | Part of the REMI Network
FILE S HANDS (Editorâ€™s note: As CondoBusiness was going to press, Bill Walker, MPP for Bruce-Grey-Owen Sound, was named minister of government and consumer services in a cabinet shuffle.)
www.REMInetwork.com | October 2018 23
COVER STORY The fate of some of the planned changes to Ontario’s condo laws remains unknown following the election of a new provincial government in June. The previous administration, led by the Liberals under Kathleen Wynne, passed and last fall started to phase in legislation reforming the Condominium Act. To date, this has established mandatory licensing for condo managers, new governance requirements, including mandatory training for condo directors, and an online tribunal for disputes over condo records, among other things.
The new administration, led by the Progressive Conservatives under Ontario Premier Doug Ford, has yet to stake out a position on the outstanding provisions of the legislation. Some of these provisions are designed to start condo corporations off with enough money in their reserve fund and stop developers from downloading construction costs onto unit owners. As the new minister of government and consumer services, Todd Smith is the provincial government’s point person on the condo file.
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“Our government recognizes that buying a home is a significant and important financial decision,” Smith said in an emailed statement. “We are committed to making sure that the appropriate protections are in place to protect Ontario consumers.” “Consumer protection is a large and important part of the Ministry of Government and Consumer Services,” Smith added. “We are looking at this policy area along with a number of others to determine how best to strengthen the protection of consumers.” The incoming administration could proceed on the condo file in essentially one of three ways: roll out the rest of the changes to Ontario’s condo laws as planned by their predecessors, change course in a major or minor way, or do nothing. “Obviously the biggest hope is that the PCs will pick up with the amendments, that it doesn’t just languish where it is now,” said engineer Sally Thompson. Outstanding legislative provisions While the Condominium Act reforms that have been phased in to date are now law, the outstanding legislative provisions are sitting on the books awaiting accompanying regulations. After regulations are in place, the outstanding legislative provisions must be proclaimed into force in order to take effect. Thompson, president of CCI Toronto, pointed to provisions that would help to establish and maintain adequate reserve funds in condo corporations as high priorities. An adequate reserve fund, which remains to be defined in regulations, is key to the financial health of condo corporations. The fund is designed to ensure corporations collect enough money from owners through monthly maintenance fees to pay for major repairs and replacements as needed. This helps corporations save up for significant expenses incrementally — rather than having to ask owners to split the sizable bill when, for example, the elevators need to be modernized — and shares capital costs across current and future owners, in proportion to their time spent living in the building using its assets. Also to be defined in regulations is how much money needs to be allocated to the reserve fund in year one of condo corporations. “Right now, we’re still putting condos out on the street at 10 per cent of operating budget,” said Thompson, “and so when the reserve fund study providers come in,
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they’re having to take the boards through a 200 to 300-per-cent increase in the reserve contribution over the first few years.” Underfunded reserves aren’t the only reason boards may have to hike monthly maintenance fees in brand new condo corporations. Some developers compel corporations to buy or lease back assets such as the guest suite or amenity room, and schedule payments to start in year two of the building’s operations, as Armand Conant, partner at Shibley Righton LLP, explained. Conant said he believes these construction costs should be reflected in the purchase price of condo units, where they are t r a n s p a re n t to c o n s u m e r s . To d o otherwise obscures what the true cost of living in a particular community will ultimately be as buyers drawn in by lower unit prices face higher monthly maintenance fees post occupancy. “This is what one of the reforms was going to prohibit, so that you don’t have a nasty wake-up call in year two, with a huge increase in common element fees because a bunch of costs were deferred to year two,” he said. Conant flagged provisions such as this, which deal with consumer protection as it relates to developers, as high priorities. If brought into force, another provision would prohibit developers from limiting their responsibility for common element construction deficiencies to what’s covered under Tarion. “I do hope that we get to the rest of the [Condominium] Act as soon as possible,” added Conant. Challenges to resolve Not everyone is eager to see outstanding legislative reforms rolled out right away. Condo lawyer Denise Lash said that there have been challenges with some of the changes that have been brought into force so far that ought to be resolved before implementation continues. Lash, president of CAI Canada, added that condo corporations are also juggling other issues, including new regulations that have made it harder for boards to reject requests from unit owners to install electric vehicle charging stations. The legislative reforms required condo corporations to file returns with a newly established entity called the Condominium Authority of Ontario — which is responsible for creating a public registry of corporations, among other things — by March 31. Approximately 1,900 of Ontario’s more than 11,300 corporations have yet to do so.
The legislative reforms have also introduced a series of new mandatory forms. Among them are the proxies that owners who are unable to attend meetings use to vote and help their corporation reach quorum — the minimum attendance level required to conduct business. “We can’t get meetings because no one wants to fill out proxies, because they’re so complicated,” said Lash. She said the ministry has indicated that it’s preparing instruction sheets and revising the proxy form for a second time. “I don’t think anyone expected it to be perfect,” Lash added, referring to the legislative reforms generally. “What’s good about it is the ministry’s asking for feedback from the different interest groups.” Dean McCabe, president of Meritus Group Management, said the Association of Condominium Managers of Ontario (ACMO) hopes to see ministry continue to consult the sector and finish rolling out the remaining legislative reforms. McCabe, who sits on ACMO’s board, pointed out that some of the changes to Ontario’s condo laws that have been introduced to date rely on some of the outstanding provisions in order to work properly. For example, he said, there is a new requirement for condo corporations to give owners at least 35 days’ preliminary notice of meetings, which overlaps with the 35 days corporations have to call and hold meetings requisitioned by owners. “We have exactly zero days to send out a preliminary notice. On the day that we receive a requisition, we have to send out a preliminary notice of meeting of owners to all owners,” explained McCabe. “It’s an impossible timeline to meet.” If implemented, one of the outstanding provisions of the legislative reforms would give condo corporations 40 days to call and hold meetings requisitioned by owners, leaving time to satisfy the preliminary notice requirement. As for the Progressive Conservative government’s intentions for this and other planned changes to Ontario’s condo laws, more information appears to be months away, according to the statement provided by the minister of government and consumer services. “We will be working with industry, stakeholders and consumers as we determine next steps,” said Smith. “I look forward to providing further updates in the coming months.” 1
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Medical cannabis a prescription for uncertainty Despite the vast new potential BY BARBARA CARSS pool of recreational cannabis users, tenants and condominium owners with medical authorization to grow and consume cannabis may still
trigger some of the most contentious debates in multi-residential buildings. Landlords and condo corporations have options to prohibit or control smoking within units, while Canadaâ€™s Cannabis Act, coming into force on Oct. 17, limits cultivation for personal use to a maximum of four plants per household. However, residents with medical authorization will remain largely exempt from those conditions.
28 CONDOBUSINESS | Part of the REMI Network
LEGAL Rental housing industry advocates have been urging the Canadian government to review and modify rules for the quantity and/or growing locales of plants that medical users are currently allowed to cultivate. This formula is based on the number of plants deemed necessary to yield a patient’s prescribed daily dosage with few accompanying guidelines beyond some recommended safety and security measures. “In one case, I have seen a Health Canada registration certificate authorizing up to 49 cannabis plants in an apartment unit with no requirement for consent from the landlord,” reports Joe Hoffer, a partner and specialist in municipal and tenancy law with Cohen Highley LLP. “I have seen what amounts to a full blown grow op with high-level lighting, humidity controls, tented areas of the floor duct-taped together and the parquet flooring lifted and scattered about.” “It can lead to absurd situations,” concurs Hans Brouillette, director of public affairs with CORPIQ (Corporation des propriétaires immobiliers du Québec). “We recently heard from one of our members who had to contend with a tenant who was authorized by Health Canada to grow up to 244 cannabis plants for personal use.” Quebec, along with Manitoba, is one of two Canadian provinces where it will be prohibited to cultivate recreational cannabis in any residence. Fines for doing so have been set at $250 to $750 in Quebec and $2,542 in Manitoba, although both provincial stipulations contravene federal legislation and are vulnerable to a court challenge. Setting terms for in-suite cultivation Regardless, Hoffer advises that landlords and condo boards should still have room to manoeuvre. In most cases, residents will have other medical cannabis supply options so a prohibition on growing it in their homes would not obstruct their access to the product. Additionally, medical users’ rights have to be balanced against those of their neighbours. “In my view, it would be an abdication of duty of care for landlords to permit grow ops in a multi-residential setting because they have to protect the property, health and safety of all residents,” he submits. “Fire and mould threats — and also security issues, in the case of 49 plants sitting there tempting miscreants — warrant imposing a rule.”
Alternatively, landlords can employ special lease conditions for circumstances in which they must accommodate plant cultivation on a larger scale. “They should have a set of terms and conditions in place, usually implemented via an amendment to the tenancy agreement,” Hoffer says. “For example, that would require the tenant to have proper liability insurance with coverage for damage from grow operations, and indemnify the landlord for any damage caused. It should also cover compliance with property
standards and environmental regulations, permission for regulatory officials to inspect and reimbursement for the cost of any environmental compliance orders.” In the new recreational regime, he predicts landlords and condo boards will respond with varying degrees of discretion if residents overstep limits — either the four-plant ceiling in the Cannabis Act or a total embargo imposed through lease agreements or condo bylaws — for in-suite cultivation. “Start with a letter telling them to cease the operation,” Hoffer says. “If there is no
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compliance, you can issue an N5 (to notify termination of tenancy) in an apartment context or threaten a court proceeding in a condo context.” Nevertheless, rule breakers may be difficult to detect. Property managers will be able to inspect units, after giving advance notice, if there is a lease term or condo bylaw in place to prohibit cultivation. Otherwise, rental housing landlords would have the opportunity to check during annual or semi-annual unit inspections. Officials authorized to enforce the Cannabis Act — typically government inspectors or police — can only enter a dwelling unit with the resident’s consent or a warrant. Moving smokers outdoors Multi-residential dwellers with medical authorization to smoke cannabis could stand out from their neighbours simply by staying inside, since they will be exempt from any ban on smoking in units. In contrast, both Quebec legislation and Ontario’s Bill 36, the Cannabis Statute Law Amendment Act, which is now progressing toward adoption, effectively push most residents of non -smoking buildings outdoors if they want to light up — where they will have to stay at least nine metres away from any premises where smoking is prohibited. Beginning with the Oct. 17 legalization date, Quebec landlords will have 90 days, until Jan. 15, 2019, to invoke a cannabis smoking ban in tenants’ units. Notably, the newly elected Coalition Avenir Québec (CAQ) government is on record supporting CORPIQ’s position that tenants who claim exempt status should be required to provide their landlords with documented proof of their medical prescriptions. The former Liberal government had rejected that proposal as an invasion of privacy. Nearly half of the respondents to a June 2018 CORPIQ survey allow tobacco smoking in their buildings, but only 14 per cent of that group intend to be similarly lenient about cannabis. Recent communications in the September 2018 issue of the association’s publication, PROPRIO, reminds members they must consider all tenants even while accommodating medical cannabis users. That includes a legal opinion predicting the provincial tenancy regulator, la Régie du logement, will be called upon to mediate. “In theory, even if a tenant obtains the right to smoke cannabis for medical reasons,
he or she should not cause problems for the building’s other tenants,” reasons Damarys Pineda Machado, a lawyer with Gagnon & Associés Avocats. “If the owner notes that the tenant is disturbing other tenants’ peaceful enjoyment, the owner must send a formal notice to the tenant concerned. The owner could also suggest alternatives to smoking cannabis, such as using it in edible form, which would eliminate the secondhand smoke and resolve the complaint.” CORPIQ will host seven educational seminars — six in French; one in English — in Quebec’s six largest cities between Oct. 9 and 24 to explore details of the provincial and federal legislation that affect housing providers. Health and safety vigilance Adults will be allowed to smoke cannabis in almost every area of Quebec and Ontario where tobacco cigarettes are permitted. How that translates to multi-residential living will become more apparent in the days, weeks and months after Oct. 17. Fire safety experts note that balconies, doors and windows will be the primary exit and entry points for smoke and/or pungent odours since smoke cannot travel through fire separations between units. It’s plausible to expect formerly covert cannabis smokers will have an atmospheric impact, but that might happen somewhere outdoors in the prescribed range for smokers at least nine metres from any building entrance. “Some people who were previously hiding it inside their suites might now be smoking it on their balconies,” hypothesizes Michele Farley, president and senior code consultant with FCS Fire Consulting Services Ltd. “However, if you consider the experience with tobacco, it seems like fewer people are smoking in their units.” She suggests property managers may want to step up vigilance in common areas where smoking of any kind has long been prohibited. In particular, some buildings are already plagued with scofflaws smoking tobacco in the stairwells. “I guess the question is, how much worse is this going to get?” Farley muses. “It’s also a good time to remind people that butts of any kind should never be thrown from a balcony.” 1 Barbara Carss is editor-in-chief of Canadian Property Management.
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General operating bylaws due for update
Every condominium corporation has a general operating bylaw which
BY DANIELLE SWARTZ AND NATALIA POLIS
regulates the affairs of the corporation and provides a roadmap for how corporations are to govern themselves. Older condo
corporations may still have the original general operating bylaw prepared by the declarant. Others may have amended their general operating bylaw in 2001, after amendments to the Condominium Act in 1998. In N ovember 2017, many more recent amendments to the Condominium Act were brought into force, affecting the g over nance of c ond o c or p orations. D espite these amendments, many corporations have not updated their ex istin g g ener al o p er atin g by l aws. A s a result , m any corporations’ operating bylaws contain provisions that are either inoperative or inconsistent with the latest amendments to the Condominium Act. Under section 56(8) of the Condominium Act, a bylaw provision that is inconsistent with the provisions of the act will be deemed amended. Updating general operating bylaws will ensure managers, directors and owners can find all of the amended provisions in one comprehensive document, rather than having to navigate through the complex web of changes in the Condominium Act and its regulations. Corporations can also avoid potential challenges from owners who mistakenly rely on contrary provisions in their current general operating bylaws. As such, now is a good time for corporations to update their general operating bylaws.
A core record of a condo corporation includes: • Declaration, bylaws, rules and current budget; • Shared facilities agreements; • Recent financial statements, auditor’s report and reserve fund plan; • Periodic information certificates issued in the last 12 months; • Minutes from meetings of owners held in the last 12 months after Nov. 1, 2017; • Record of owners, mortgagees and leases; and • Any other record that is specified as a core record in the corporation’s bylaws.
Changes to condo records C ondo corporations a r e r e q u i r e d to m a i n t a i n c e r t a i n documents as records of the corporation. The amendments to the Condominium Act classify these records as either core records or non- core records. With the new recordsrequest process, it is impor tant that condo corporations understand which documents fall under each category, as the timeframes and procedures for providing these records to requesting owners differs. Failure to abide by the new re c o rd s - re q u e s t p ro c e s s c a n l e a d to a C o n d o miniu m A u t h o r i t y Tr i b u n a l a p p li c at i o n a n d a f in e of u pw a rd s of $5,000. A revised general operating bylaw may serve as a useful tool for condo corporations by outlining the different categories of records, and may greatly assist condo corporations when a records request is submitted.
New duties and obligations Amongst other things, general operating bylaws outline condo corporations’ duties and obligations. The amendments have expanded these obligations to include preparing and delivering “information certifications” to owners, including periodic information certificates, information certificate updates and new owner information certificates. These new information certificates must be sent to owners at different times in a condo corporation’s fiscal year and when certain events occur. Most notably, the periodic information certificate must be sent to owners within 60 days of the last day of the first quarter of the corporation’s fiscal year and within 60 days of the last day of the third quarter of the corporation’s fiscal year. Information certificate updates must be sent to owners upon “triggering” events such as changes in the composition of
Any record that is not a core record is a non-core record. The amendments also implemented new retention periods for financial records. Specifically, all financial records of a corporation must be retained for a period of at least seven years, as opposed to the prior six-year requirement. Again, most corporations’ existing operating bylaws will reflect this six-year retention period.
www.REMInetwork.com | October 2018 33
The amendments push for greater transparency on the board level and provide
new qualifications and disqualifications that should be reflected in a corporation’s general operating bylaw. the board of directors or changes to the corporation’s insurance policies. By reflecting condo corporations’ duties and obligations, including the information certificate requirements, within general operating bylaws, managers and directors have a one-stop-shop for understanding their responsibilities and acting according to the Condominium Act, thus avoiding any potential liability that could stem from their failure to do so. Changes to board of directors General operating bylaws stipulate director qualifications and disqualifications. The amendments push for greater transparency on the board level and provide new qualifications and disqualifications that should be reflected in a corporation’s general operating bylaw. Most significantly, any person running for a seat on the board of directors must provide certain disclosure statements prior to their election or appointment. Candidates must disclose: • If they are a registered owner of a unit in the corporation; • If they are a resident of a unit in the corporation; • If they, their spouse, child, parent, spouse’s child or parent, an occupier of a unit in the corporation, is/are a party to a legal action to which the corporation is also a party and a brief general description; • If they have been convicted of an offence under the Condominium Act or under the regulations within the last 10 years; • If they have a direct or material interest in a contract or transaction to which the declarant (i.e. the developer) or an affiliate of the declarant is a party (other than in the capacity as a purchaser, mortgagee, owner or occupier of a unit); and • Any other disclosure requirements outlined in a corporation’s bylaw. Any director who fails to abide by these new disclosure requirements will be disqualified from the board. Another amendment is the mandatory director training. Every director appointed or elected to the board of directors after Nov. 1, 2017, must complete mandatory director training. The director training is offered online through the Condominium Authority of Ontario’s website and covers all facets of condo governance. Directors have six months from their election or appointment to complete this training. Otherwise, they will be disqualified from the board.
34 CONDOBUSINESS | Part of the REMI Network
Changes to owners’ meetings General operating bylaws further outline the procedures for calling and holding owners’ meetings. The amendments provide new notice obligations for corporations as well as quorum requirements. Specifically, the amendments require corporations to send out two sets of notices: the preliminary notice and the notice of meeting. For all owners’ meetings except requisitioned meetings, the preliminary notice is to be sent out at least 35 days before the meeting and at least 20 days before the notice. The preliminary notice outlines the purpose of the meeting and stipulates a deadline for owners to request that additional material be included in the notice package — for instance, their candidate disclosure statements and resumes. The notice of meeting must be sent out at least 15 days before the meeting and includes any materials that owners have requested be included in the notice package. Corporations are not obligated to include any additional material unless 15 per cent of owners have requested the material to be included and the material is not contrary to the Condominium Act. The amendments also provide new quorum thresholds that may assist corporations in obtaining quorum at meetings. Particularly, the amendments provide that quorum at any first and second attempt to hold an owners’ meeting is 25 per cent of the units. If quorum is not present at the first and second attempt to hold the owners’ meeting, the quorum threshold decreases to 15 per cent of the units for any third or subsequent attempt to hold the meeting. Updating general operating bylaws to reflect these recent amendments will help to clarify how corporations’ affairs will be conducted going forward. Experience to date suggests that passing an electronic voting bylaw first, to permit the use of electronic voting, can make it easier to get these important updates to a corporation’s bylaws approved by owners, which requires a favourable majority vote at a duly constituted meeting. 1 Danielle Swartz is a second year associate with Lash Condo Law. She is building a practice in condo development, corporate governance, and representing condo corporations in court proceedings and dispute resolution. Natalia Polis summered and articled with Lash Condo Law and has returned as a first year associate. As counsel for condo corporations, she draws upon her past experience as an assistant condo manager at her family’s condo management company.
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Why anti-SLAPP provisions should give condo corps pause Condominium communities can certainly be a lively forum for negative
and destructive comments.
BY CAROL DIRKS
Board members and managers are frequently accused
of “receiving kickbacks” or “being on the take,” or “acting in bad faith” and engaging in “illegal” methods. Condo bylaws t ypically contain a p rov i s i o n e nt i t l i n g d i re c to r s to b e in d emnifie d by the c or p oration for damage or harm sustained to them in the c ourse of c ar r ying out their duties as directors. Previously, condo corporations have justified proceeding with a defamation action against owners on this basis.
However, since 2015, there have been a flood of court cases where “antiSLAPP” provisions have been invoked to halt defamation claims at the outset. In late 2015, the Ontario government passed the Protection of Public Participation Act. Its objective was to provide a mechanism to quickly identify and eliminate “strategic litigation against
36 CONDOBUSINESS | Part of the REMI Network
public participation,” or “SL APP” for short. The act seeks to preser ve an individual’s right to freedom of expression on issues of public interest without the fear of legal action. SLAPP refers to a court action brought by a well-resourced litigant, such as a corporation, against an individual with the intent to silence or dissuade that individual
from voicing an opinion in public. Because of the high costs of defending a lawsuit, the individual may be forced to capitulate and forego expressing their opinion as a result. The overall impact is to discourage or decrease public discourse, debate, and criticism. One recent case shed light on how these newly available SL APP provisions may apply in the condo context. Here is what boards of directors and their managers need to know: How do the anti-SLAPP provisions work? Section 137.1 of the Ontario Courts of Justice Act permits a defendant to a defamation action to bring a motion to a judge to dismiss the court action “if the person satisfies the judge that the proceeding arises from an expression made by the person that relates to a matter of public interest.” The filing of the
motion freezes any further steps in the action until the motion is heard. The term “expression” is defined to mean “any communication, regardless of whether it is made verbally or nonverbally, whether it is made publicly or privately, and whether or not it is directed at a person or entity.” The Court of Appeal for Ontario recently clarified the appropriate interpretation of the test for an anti-SLAPP motion. First, the onus is on the defendant (individual) to establish that the “expression” (whatever he or she said) relates to a matter of public interest. The Court of Appeal called this the “threshold requirement.” If the defendant satisfies the threshold requirement, the onus then shifts to the plaintiff to clear a “merits based hurdle” and a “public interest hurdle.” A failure by the plaintiff to clear both hurdles will result in a dismissal of the action.
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SLAPP refers to a court action brought by a
well-resourced litigant, such as a corporation, against an individual with the intent to silence or dissuade that individual from voicing an opinion in public. The initial threshold requirement The initial onus is on the defendant to prove that the action arose from an expression made by the defendant that “relates to a matter of public interest.” The term public interest is not statutorily defined. The Court of Appeal confirmed that it must be determined “objectively, having regard to the context in which the expression was made and the entirety of the relevant communication.” There is no hard or fast rule as to what communications will qualify as being of “public interest.” It may be enough that a segment of the community has a genuine interest in receiving the information. A curiosity interest is not enough. Recently, in Small Claims Court, a condo owner brought a motion to dismiss a defamation action pursuant to section 137.1. In that case, a director of a condo corporation sent a series of emails to other board members containing false and damaging statements about property management. The board member argued that the management company’s legal action was a SLAPP to prevent him from discussing legitimate and necessar y condo matters in the public interest. In that c ase (released before the Court of Appeal decisions), the court found that “communications related to matters involving the everyday affairs at the Condo” did not fall within the meaning of public interest as defined by section 137.1(1). It remains to be seen whether this viewpoint will be upheld in the higher courts. The statements at issue in that case appeared to be a personalized attack on management as opposed to broader criticisms about the corporation governance.
Merits based and public interest hurdles Once the threshold requirement is satisfied, the plaintiff has to then satisfy the judge, on a balance of probabilities, that the action has substantial merit. The judge must look at the evidence filed on the motion and decide if there are reasonable grounds to find that a trial judge could accept the plaintiff’s evidence. In addition to showing the action has substantial merit, the plaintiff also has to show that there are reasonable grounds to believe that none of the defences asserted by the defendant would succeed. Finally, the plaintiff must show that the harm suffered by it is sufficiently serious that the public interest of allowing the action to continue outweighs the public interest in protecting the individual’s right of expression. The harm to the plaintiff can be monetary or non-monetary. The plaintiff is not required to “present a fully-developed damage brief.” However, there should be some evidence to reasonably draw a connection between the defamator y st atement and the damages claimed. The damage must not be nominal. In one case where the individual had retracted the defamator y statements immediately thereafter and issued an apology letter, the court dismissed the action because “there is nothing to be gained by proceeding.” What if the action is dismissed? If the defendant individual is successful on the motion and the action is ordered by the ju d g e to b e d ismis se d , the individual is presumptively entitled to their full indemnity costs of the motion. This means the plaintif f corporation has to pay all of the individual’s legal
38 CONDOBUSINESS | Part of the REMI Network
costs for the motion, which could be thousands of dollars. Even if the judge decides not to dismiss the action at this stage, there is a legal presumption that the plaintiff corporation is not entitled to any of its costs of having to defend the SLAPP motion. This means that there are no cost consequences to the individual bringing the SLAPP motion if he or she loses, and the corporation has to foot the bill for its own costs. In special cases, if the defendant individual convinces the judge that the action was brought by the corporation in bad faith, the judge can also award payment of damages to the individual to effectively penalize the corporation for bringing the action in the first place. What should boards of directors and managers take away from this? As a result of section 137.1 of the Courts of Justice Act and the significant cost consequences to an unsuccessful plaintiff, it’s extremely important that boards of directors consult with legal counsel before embarking on any legal action to address negative or defamatory statements made by an owner or resident. In deciding whether it’s appropriate to initiate legal action using condo corporation funds, all of the potential consequences will need to be carefully considered. Sometimes, as difficult as it may be, the best course of action might be to take the “slap” in the face, and move on. 1 Carol Dirks is a partner at Fogler, Rubinoff LLP. Since being called to the bar in 1996, Carol’s legal practice has been focused on all matters related to condominiums, with a focus on condominium related litigation.
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Standing out among licensed professionals As of November 2017, every BY KRISTY JOPLIN condominium manager in Ontario is required to hold a valid licence issued by the Condominium
Management Regulatory Authority of Ontario (CMRAO). The licensing requirement brings many benefits for the condo management profession, including establishing credibility, providing oversight, and protecting consumers. However, now that licensing is the new norm, condo managers may struggle to set themselves apart from their peers in the industry.
40 CONDOBUSINESS | Part of the REMI Network
Here are four tips for standing out in a crowded industry:
Pursue a professional designation Even with licensing in play, professional designations still have value. Achieving the Registered Condominium Manager (RCM) credential or another designation shows condo managers will go above and beyond what is required in order to be better and achieve more than their colleagues in the field. Choosing to pursue specialization or sit for an unrequired exam demonstrates commitment to the profession. Yes, it’s extra work. Yes, it’s difficult. However, these are the very reasons to pursue a professional designation, because not everyone can or will do it. Take continuing education courses Every condo manager is required to take the same education courses in order to obtain a licence. But top professional managers strive for continuous learning opportunities and seek out ways to remain knowledgeable about industr y trends and best practices. Policies, procedures, and building materials are almost constantly changing; being able to demonstrate competency in a changing environment shows that managers are not stuck in the material they learned to become licensed, but rather they recognize the importance of evolving with new information.
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Join a professional association Professional associations are valuable but often underutilized resources available to managers looking to get ahead in the industry. However, it is not enough to simply join; managers need to become active participants in the organization. There are many opportunities to take full advantage of membership in a professional association: Network, network, network – As the familiar saying goes, “it’s not what you know, but who you know that counts,” and networking is a good way to get to know the top people within an industry. Most associations understand the importance of making connections and will build networking opportunities into each event.
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Education – As discussed, continuing education can give professionals the edge in the industry, and professional associations often provide high-quality, relevant education for managers. 588 Edward Avenue, Unit 49, Richmond Hill, ON L4C 9Y6 P 905-737-0111 F 905-737-4046 (Guelph) P 519-827-1757
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Industry awards – Most associations recognize leaders in the industry through annual awards. Getting to know the award winners, or at least learning about their careers, can provide valuable insight into what it takes to rise to the top of the field. Communications – The best associations strive to keep their members informed on the latest industry news whether it per tains to trends, best practices, or new regulations. Members should make a point to read articles, blogs, e-blasts, and newsletters published by their association with a view to incorporating new ideas into their daily work. This will boost condo managers’ credibility and set them apart as leaders within their company or organization. Include everything on resumes Finally, condo managers can show potential employers or clients that they are a rising star by including everything on their resume. Took an extra course to learn a new skill? Include it. Joined a professional association committee (and became a contributing member)? Include it. Saved a corporation money by implementing an innovative process? Include it. Some people find it difficult to toot their own horn, but resumes are condo managers’ one opportunity to shine and show they’re different from the competition. Be sure to phrase everything as an achievement that brought value to the position. Do not simply talk about managing day-to-day operations; condo managers should explain why day-to-day operations ran more smoothly under their leadership. A career is an investment, and it should be cared for as such. A condo manager won’t rise to the top without a proper strategy for getting there. Want to be considered a leader in the industry? Map out the steps it will take to achieve this goal and move forward. No one stands above the crowd by sitting on the sidelines. 1 Kristy Joplin is the manager, marketing and communications for the Association of Condominium Managers of Ontario (ACMO).
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Takeaways from #TorontoFlood At least one condo corporation is facing what is likely to be a steep repair tab
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KITCHEN STACK PRESSURE CLEANING Kevin Vuong, past condo board president and recent candidate in the municipal elections, estimates that the collapse of a fourth-floor storm drain caused six figures in damage in the Southcore community he calls home. He said so much water was released so quickly that the buildingâ€™s first four floors were flooded, including the lobby, elevators, amenities and units. After a persistent fire alarm signaled that something was amiss, Vuong soon learned through social media that many other downtown communities had been affected by what was trending on Twitter as #TorontoFlood. In the immediate aftermath, it was too early to know the full impact of the downpour, but the event serves as a reminder of the strategies available to condo corporations to streamline recovery and manage risks as extreme weather inflicts an increasing amount of destruction.
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“In Ontario alone this year — the year’s just well over half done — we’ve almost hit that $1-billion mark, so there is a definite impact of severe weather on properties that we’re seeing.”
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Extreme weather claims on the rise It would be at least a few weeks before preliminary estimates of the property damage caused by August's heavy rainfall became available, said Pete Karageorgos, director of consumer and industry relations, Insurance Bureau of Canada, Ontario. Not including this figure, insurers have already paid out $800 million in claims connected to extreme weather across the province in 2018 to date, he said, which has Ontario closing in on the country-wide total for recent years. “In Ontario alone this year — the year’s just well over half done — we’ve almost hit that $1-billion mark, so there is a definite impact of severe weather on properties that we’re seeing,” said Karageorgos. 8:59 What AM impact, if any, August’s storm might have on insurance premiums is unclear at this point, he said in August. “It would depend on what the long-term trend is that the companies are seeing that would perhaps impact rates,” said Karageorgos. Vuong, citing the increasing prevalence of extreme weather events, predicted that both condo corporations and unit owners can expect to see higher insurance premiums coming down the pipe. Stop-gap measures after the storm Vuong also anticipated that restoration efforts in condo communities affected by August’s storm could get slowed down by the volume of demand for contractors — a common experience of property owners affected by extreme weather events, Karageorgos confirmed. Meanwhile, after August’s flooding, Vuong’s building was down to two out of five elevators, which prompted his condo board to deploy a protocol it developed in response to past elevator problems, unrelated to flooding. He explained that while one elevator continued to service all floors, the other elevator was only stopping at every third floor, ensuring residents, and particularly people with mobility issues, have a way to get to and from their units. Both elevators were being manned by additional security staff, as was the stairwell, which was open for use as an alternative route. It’s important for boards to communicate with residents during these types of situations, said Vuong. “Those kinds of things, though minor, are very important in actually ensuring people understand why decisions have been made the way
46 CONDOBUSINESS | Part of the REMI Network
they are, why things are inconvenient for them, and it helps alleviate that frustration,” he said.
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“I hope that every board, going forward, whether they’re affected or not, will be asking the question of their property management: ‘If we have another Toronto flood, what are some problem areas that we should be keeping an eye out on?”
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Past events lead to expanded coverage In condo communities, having a clear definition of what the corporation is responsible for restoring and what the unit owner is responsible for restoring helps streamline the claims process, said Karageorgos. This is normally captured in a standard unit bylaw, which boards require majority support from owners to pass. “Insurance companies will want some clarity, and if that isn’t spelled out within those bylaws, of the standard unit, it takes a bit of work on the [part of] the adjuster and the unit owner to try and get through the appropriate paperwork,” said Karageorgos. “And so that could cause a delay in the repair starting, someone being out of their unit longer.” Condo residents require individual insurance policies to cover their personal contents as well as any unit upgrades, which is not always well-known, Vuong observed. He said boards can take events such as August’s downpour as an opportunity to make residents aware of this. Boards should also regularly review the sufficiency of their corporation’s policy, said Karageorgos, who pointed out that offerings evolve, with expanded water-damage coverage becoming available after another significant summer rainfall soaked Toronto, back in 2013. Said Vuong: “I hope that every board, going forward, whether they’re affected or not, will be asking the question of their property management: ‘If we have another Toronto flood, what are some problem areas that we should be keeping an eye out on? And what can we do to protect ourselves against that going forward?” 1
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Inclusionary zoning revisited Editor’s note: There is a shortage of affordable housing in Ontario. The province has responded by paving the way for inclusionary zoning, which requires developers to offer a percentage of units in projects of a certain size at below-market rates. But is this policy tool the answer? In a recently released white paper, REALPAC finds that inclusionary zoning needs to be applied consistently and in partnership with the private sector in order to be effective, and that it can’t be the only answer. To that end, the national industry association for Canada’s real property sector makes recommendations to the new government for resolving issues it identifies with the regulation passed by the previous government. Herewith is an excerpt from the white paper, Does Inclusionary Zoning Work? Investigating the Efficacy of Inclusionary Zoning as a Housing Supply Tool, which is reprinted with permission from REALPAC.
When the Government of Ontario enacted O.Reg 232/18: Inclusionary Zoning, many industry stakeholders were surprised by the drastic changes that the originally proposed regulation under the Promoting Affordable Housing Act had undergone. Industry stakeholders such as the Building Industry and Land Development Association of the Greater Toronto Area and the Ontario Home Builders’ Association have asserted that the changes download authority and responsibility to the municipalities and undermine the partnership balance originally inscribed into the Long-Term Affordable Housing Strategy Update.1 The fear is that, in revising legislation to give municipalities more agency, the process has become more political rather than ensuring the establishment of a partnership model that can deliver government-mandated affordable housing to market in an expedient manner. M ay 2 016 – I n c l u s i o n a r y Z o n i n g Consultation Discussion Guide Released in May 2016, the proposed policy framework for updates to the Planning Act through the Long-Term Affordable Housing Strategy recognized the role of the private sector in increasing the supply of a wide range and mix of housing that includes affordable options. The proposed amendments to the Planning Act were designed to allow municipalities to pass inclusionary zoning bylaws, but were subject to certain requirements, to increase the supply of affordable housing in order to meet objectives and targets set out in housing and official plans.
Bill 204, which passed first reading on May 18, 2016, drafted by the Minister of M unic ip al Af fair s an d H ousin g , expressly detailed the inclusionary zoning requirements. These stipulations were put out to the industry for comment and feedback, which REALPAC participated in, al o n g sid e m any other in dustr y stakeholders. In December 2017, the prop osed re gul ation was fur ther c l ar ifie d in the definition of inclusionary policies proposed under Environmental Registry number 013-1977. The province proposed that zoning bylaws authorizing inclusionary zoning could apply to developments with at least 20 units. At the
48 CONDOBUSINESS | Part of the REMI Network
time REALPAC’s suggestion was raising this threshold to 50 or 100 so as not to disperse inclusionary zoning units too sporadically across the city. Use of Municipal Assessment Reports to be used as a data-driven policy development tool was supported by REALPAC, as it doubled as an accountability tool for municipalities to ensure that the bylaws enabled through legislation were being used responsibly and appropriately through municipalities. A well-defined five per cent ‘set-aside’ of units, with 10 per cent required in highdensity transit station areas, was wellsuppor ted by RE A LPAC if this was defined as the maximum set aside. At
the time REALPAC cautioned that should the maximum required contribution of units be raised, the economic viability of the housing market could be at risk if municipalities did not consequently provide height and density bonuses. T he prov ince’s proposal included a draft 40/60 cost-sharing model for paying for inclusionary zoning units. This model would have made municipalities responsible for 40 per cent of the cost and private developers responsible for the remaining 60 per cent. At the time REALPAC advocated for a 50/50 sharing of the burden, so as to represent an even split and partnership between the two sectors. Mandatory reporting by council of the success of inclusionary zoning initiatives was supported by REALPAC, which cautioned that use of inclusionary zoning should be considered as a last option policy when municipalities found themselves unable to provide appropriate affordable housing within their existing policy toolkit. REALPAC also cautioned the province a g ains t im p l e m e ntin g in c lu si o n a r y zoning policy and Section 37 exactions simultaneously due to the fact that this creates a dual burden on developers and carries the potential to impact project viability. It was emphasized that municipalities should not be permitted to extract housing through inclusionary zoning and extract section 37 payments from the same development. This would decrease economic viability and reduce the number of inclusionary zoning units realized in the housing market. After receiving feedback from both the development community and municipal councils, the Province drafted and released its finalized amendments to the Planning Act.
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January 2018 – Introduction of O.Reg 232/18 In Januar y 2018, the G o v e r n m e n t of Ontario released the updated version of its inclusionar y zoning p o l i c y. D e s p i t e i n d u s t r y i n p u t o n the Environmental Registr y draf t in suppor t of well - defined inclusionar y zoning requirements, O.Reg 2 3 2 /18 ef fe c ti vel y rem ove d all d efinitions, giving municipalities explicit permission to design their own requirements. The circulated Environmental Registry draft was amended for final enactment. In removing all clarity from the regulation, the province has given municipalities carte blanche to interpret the tenets of inclusionary zoning policy as they please. Allowing municipalities to self-define their inclusionary zoning requirements is not necessarily in the public interest, may lead to severe inconsistencies in its applications, and is furthermore not reflective of industry feedback, nor prior drafts of the legislation that were generally supported by REALPAC. Given a lack of opportunity for input on the regulation’s final draft, it should be stated that there are two related but opposite concerns with how this legislation was implemented. The first is that O.Reg 232/18 may end up being entirely toothless. By not mandating adoption or defining requirements in any meaningful way, the sum result of the legislation may be that no municipality adopts it. This would be similar to the case in New York, in which council consensus did not lead to individual district adoption. As documented by City Lab, when New York’s Mandatory Inclusionary Housing program was enacted, neighborhoods designated for inclusionary zoning units
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met development up-zoning incentives with resistance. Neighborhood organizations actively advocated against the additional density. Despite a council majority in approving the city-wide program, individual councillors in Queens and Manhattan withdrew their support for the first two proposals to capitalize on the program, due to neighbourhood opposition. 2 Similarly, Ontario’s municipalities may not see any political merit in actually using the inclusionary zoning policies implemented in their official plans. Second, and more concerning, is that the province has given municipalities far too much power in determining inclusionary zoning regulations. Lack of provincial oversight and well-defined legislation may cause many of the scenarios REALPAC cautioned against in comments submitted to the Minister prior to the O.Reg 232/18 being enacted. REALPAC’s position is that inclusionary zoning should be a last resort for providing affordable housing, but there is still value in exploring it as an option, if it is standardized across the province and designed to actively promote a partnership model where it is being implemented. References 1. Vaccaro, J., & Provenzano, J. (2018). Province Adds More Politics When We Need Partnerships for More Homes [Press Release]. Greater Toronto: BILD and Ontario Home Builders' Association. 2. Cortright, J. (2018). There Will Be No Exit From California's Housing Hell. Retrieved from https://www.citylab.com/ equity/2018/05/there-will-be-no-exit-fromcalifornias-housing-hell/559706/
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NEW AND NOTABLE
Solution amps up EV charging capacity One Bedford Condo in Toronto is now equipped to support electric vehicle (EV) charging in just about every exclusive-use space in its parking garage, says board president David Forgione. The condo corporation has inked a contract with a San Francisco-based company called EverCharge, whose fully managed solution is touted as increasing the EV charging capacity of buildings by 10 fold. At One Bedford Condo, that means being able to support as many as 200 EVs on Level 2 chargers versus just 20. The feat comes at a time when a new provincial regulation is forcing condo corporations in Ontario to figure out how to accommodate requests from owners to have EV charging stations installed in spite of electrical capacity challenges. (Although the new government may have slowed down demand when it cancelled incentives to buy EVs, Forgione observes.) It was two Tesla owners who triggered One Bedford Condo’s search for an EV charging solution. Forgione says he believes EverCharge’s solution, which has been up and running at his building since September, could have applications in other condos. “When something works in practice like this, I like to share it because it’s not easy to implement large-scale projects in the context of a condo corporation, and we made it work and we wanted to help other condo corporations do the same,” he says. One Bedford Condo may be EverCharge’s first residential installation in Canada, but it’s one of thousands of across North America. The solution runs on proprietary SmartPower technology, which helps increase EV charging capacity by managing loads in real time. “What that means is when a charger’s not in use, which is a substantial part of time, that available 50 CONDOBUSINESS | Part of the REMI Network
capacity can then be used by other charge stations,” explains Kyle Lyons, director of member services. He says condo corporations typically bear the costs associated with any shared infrastructure required to support the installation of individual EV charging stations. “Most buildings you’re going to often need a transformer installed to access some of the building power, so it’s usually a small transformer upgrade, distribution panel, and then we wire from the resident’s parking space to those breaker panels,” says Lyons. Forgione counts One Bedford Condo as lucky in that it didn’t require electrical upgrades to accommodate the solution and faced no upfront costs, meaning no need to seek owner approval or potentially issue a special assessment to fund the project. He explains that the condo corporation negotiated a deal that effectively gave EverCharge exclusive rights as a service provider to a set amount of the building’s transformer capacity. Once any shared infrastructure is in place, Lyons says owners pay for the installation of their personal EV charging station, which typically ranges from $2,500 to $4,500, depending largely on how far the wire needs to be run to reach the distribution panel. Under the fully managed solution, the board and property manager handle the basic paperwork associated with registering individual installations while EverCharge handles requests from owners for EV charging stations, along with their set-up, submetering and billing, which includes a monthly service fee. More information is available at https://evercharge.net. One Bedford can be reached via email@example.com.
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