Condo Business September 2022

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BEARING THE PRESSURE

A guide to towering construction costs and what managers are facing on the ground

When owners set up shop at home Making dynamic decisions as a team

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September 2022 • Vol. 37 #4Canada’s Most Widely Read Condominium Magazine
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When Condo-Dwellers Open At-Home Businesses

Ross Boncori

Rattle of Rising Construction Costs

Patrick Cutten and Sally Thompson

New Waves

Rebecca Melnyk

FOCUS ON GOVERNANCE

There’s No ‘Eye for an Eye’ in Team

Marc Bhalla

Effective Decision-Making

Laura Lee

The Wild West Governing Condos in Alberta

Sharon Blondin

LEGAL

The Unique Nature of Disputes Between Corporations and Owners

James Davidson and Nancy Houle

MANAGEMENT

Promoting PM as a Career Path

Angel-Marie Reiner

Freeing-Up Time for Capital Projects

Vadim Koyen

& MAINTENANCE

The Truth About Sound Control Underlayments

Steven

Bulk Contracts Post Rogers Outage

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In these unprecedented times, many condo corporations are facing difficult discussions about the future as they plan around the swollen costs of residential construction.

Corporations are balancing the wellbeing of their buildings with the wellbeing of owners, many of whom are facing their own personal financial anxieties. In this issue, beginning on page 24, we explore the various reasons behind the higher costs and what boards can do to prepare, as well as nonconventional ways to make capital projects cost less. Managers also bring their professional perspective to the table to discuss what they’re seeing on the ground. A big factor is that labour shortages have further strained daily operations and building projects of all sizes.

On the subject of labour, we turn to at-home businesses in this newer era of work from home, which includes, in some cases, small business owners who’ve lost their commercial leases during the pandemic and now see their units as potential alternatives.

Further on the topic of work, one condo manager discusses ways that the management profession can be promoted as a career path, with ideas on connecting to younger generations and being in touch with what they value.

Salary expectations inevitably play a role, especially these days with the cost of groceries and home ownership, but meaningful mentorship is also on the minds of Gen Z and millennials. More on that on page 34.

Finally, we bring you stories on effective decision-making, and doing so as a team. With much uncertainty ahead, “good governance is the life blood of successful condo corporations,” as one industry member plainly puts it on page 38.

Happy reading!

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HIGH-RISE POWER FAILURES Prevention, preparedness and emergency response

A crane hit a high-voltage transmission line in Toronto in August and caused thousands to lose power for a prolonged period of time. Numerous high-rise condos were impacted, but ultimately safe.

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However, incidents such as this are often learning experiences. Having an active risk management program available for staff to follow will save time when seconds count. Here are some tips to ensure high-rises are ready for the next power failure.

Have portable lighting ready

Building staff such as superintendents and front desk security should have rapid access to emergency-use flashlights, complete with spare batteries in the event of a power failure. To ensure they are always available and ready, implement a monthly checklist to test batteries.

Check and inspect the emergency generator once every seven days

Emergency generators for residential buildings must be inspected by the building staff every seven days. A

15-point inspection is required that must be documented by the building owner every week to ensure there are no leaks, corrosion, troubles and more. Failing to complete or document these inspections is a violation of the Ontario Fire Code.

In addition to this weekly inspection, your generator will also require a monthly test. The property management team is required to maintain documentation of these tests. When these systems are inspected and tested as required, they will work and better protect everyone in the building.

Keep the fuel level topped up and storage clear

Fuel levels for your building’s emergency generator should be checked every 30 days and documented by either your

We’ve Got You Covered

At Crossbridge, we consistently strive to provide the best possible service to owners and residents alike. As the leading condominium property manager in Ontario, our experienced team focuses on your needs and offers industry-best practices that help to promote operational efficiency and long-term satisfaction.

Great condominium communities don’t just happen on their own. Let our team help.

building superintendent or security guard during routine patrols. The level of fuel for the tank should never go below 80% as this generator fuel provides emergency power to the building’s critical life safety systems during power failures.

Your diesel fuel tank is typically protected by a spill moat that is designed to hold 110% of the volume inside the fuel tank, allowing this moat to be a secondary containment area. In the event the tank leaks or fails, the spill moat is designed to capture all of the spilled diesel. Never store any materials inside the spill moat area as this decreases the area available to safely collect the diesel in the event of a spill.

Keep both staff and residents up-to-date During a power failure, be prepared to update occupants of your condominium via the

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building’s emergency voice communications system. Building staff require training on how to use this system and the correct wording and advice to provide residents during power

failures. A building’s emergency response plan will capture all of these procedures, including what to explain to the residents. Both the fire alarm system and emergency

voice communications system will continue to function during failures as they are backed up by the generator. If the generator fails, the fire alarm system will still protect the building due to local batteries inside the panel.

Introduce domestic water pumps to the emergency generator

Domestic water pumps ensure that water arrives to all the floors as needed to boost municipal water pressure. Some residents won’t receive water during power failures if these booster pumps are not connected to emergency power.

Develop an emergency preparedness and response plan

High-rise power failures are a “reasonable” and “foreseeable” emergency that could occur in a condominium. Having policies, procedures and documented prevention and mitigation efforts is already a requirement for the most common, foreseeable emergencies.

Most property managers develop emergency preparedness and response plans specifically for their building for professional documentation. In Ontario, for example, there is significant legislation such as the Occupational Health & Safety Act, Occupier’s Liability Act and even fire codes that have unique requirements that can be met through documenting and implementing such a plan. Consideration should always focus on the major themes of: prevention, preparedness, mitigation, and response. 1

Jason Reid is the senior adviser for Fire & Emergency Management with National Life Safety Group in Toronto. He has worked with international embassies, government, public and private sector critical infrastructure facilities; commercial/residential high-rise buildings; world class shopping centres and mass assembly facilities. He can be reached at: jason.reid@nationallifesafetygroup.ca Main: 647-794-5505 Toll Free: 1-877-7510508 www.nationallifesafetygroup.ca.

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ASK THE EXPERT
“Emergency generators for residential buildings must be inspected by the building staff every seven days.”

LIVES ON THE LINE: PRIORITIES IN HEALTHCARE PROPERTY RESTORATIONS

There’s zero room for error in healthcare facility restorations. When a fire, flood, or other disaster occurs, quick and comprehensive action is required to bring critical services back online, and with minimal impact on patients and staff. Here’s where calling on a restoration partner with specialized healthcare experience, equipment, and strategies counts.

“It is an understatement to say that healthcare environments are complex, so when an incident disrupts patient care, you need a contractor who knows what they’re walking into and what needs to be done to keep everyone safe,” says Jim Mandeville, senior project manager, large loss, North America, for First Onsite Property Restoration.

Healthcare-related restorations carry several priorities. For Mandeville and the First Onsite team, they include:

• Infection control and prevention: The key to healthcare-related restorations is protecting all facility occupants from potential infections during the restoration and construction process. For First Onsite, doing so involves employing a

broad range of prevention measures, including HEPA air scrubbing and negative air pressurization, indoor air quality (IAQ) and airborne particulate control, biomass reduction (e.g., topdown cleaning, decontamination, and sterilization), proper waste and debris disposal, and ongoing project monitoring and documentation. Importantly, these actions adhere to all infection control policies and procedures.

• Ongoing biocontainment support: Care must be taken to mitigate the risk of biocontainment during a restoration and prevent biocontainment risks through ongoing risk assessments and the development of hazard mitigation response plans.

• HVAC: Fresh and hygienic indoor air quality (IAQ) is critical in a healthcare environment. Herein, says Mandeville, “Restoration efforts must focus on fostering and ensuring healthy IAQ, and we do that by following all national and provincial regulations for Infection Control and Prevention, in addition to industry standards for HVAC cleanliness.”

• Emergency planning and training: Part of healthcare-related restorations is mitigating future incidents. As such, First Onsite’s strategy includes helping healthcare staff prepare for the next incident by providing emergency preparedness planning and training, performing annual inspections and hazard surveys, and conducting facility assessments.

Experience matters

Keeping patients and staff safe is job one during a hospital restoration. Doing so effectively means working with a restoration partner that recognizes the risks and understands the steps necessary to quickly and safely mitigate damage and minimize exposure to areas of the facility not affected by damage.

For First Onsite, that means in-depth training of staff and adherence to strict protocols that ensure restoration work meets the strict standards of a healthcare setting. The company has structured its teams to help healthcare facilities across Canada bounce back from disasters.

“We’ve worked with healthcare clients across Canada over the years, and it’s given our teams the specific skills and insights they need to tackle these uniquely challenging situations,” adds Mandeville.

FIRST ONSITE is a leader in emergency response planning, disaster remediation, property restoration, and reconstruction services, helping North America restore, rebuild, and rise after catastrophic events of every kind. Learn more at www.firstonsite.ca.

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While some strive to achieve it, it is not necessary for every board decision to be unanimous. In fact, a split vote can often be the sign of a healthy operation — where multiple views are considered, members can agree to disagree and move on.

Trouble occurs when boards are unable to conduct business, stuck at a standstill on a split vote, or when grudges are held over past votes. When directors use their vote to retaliate against one another, it is difficult to see how the community can be put first. Often, troubles arise when things get personal between directors.

Members of a condominium board do not need to be friends. They do need to find a way to co-exist. From several mediations conducted to address condominium board “in-fighting”, here are some observations of how a board can operate effectively as a team:

Develop a shared understanding of how business will be conducted

To be clear, this is not imposing an existing structure upon new board members without their input. It is most successful when the process engages all directors to design and agree to a framework. It can be most effective when it is not considered with a

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Most condominium boards have an odd number of directors for a reason.
THERE IS NO ‘EYE FOR AN EYE’ IN TEAM

particular board decision in mind but as a general, high-level approach that considers questions such as:

a. What will the board do when there are different views amongst directors?

b. How can all directors feel heard?

c. How can the board make a decision and move on?

Typically, this involves striking a balance that affords time to dissenters while also allowing for decision-making to take place. This shared understanding should also spell out how dissenting voices can be acknowledged to offer guidance when a split vote occurs and prevent conflict arising about how to go about this.

Agree to disagree

From personal observation, this has been implemented in a number of ways— from demonstration by a board president who would routinely ensure to be outvoted on certain decisions to maintain a culture of

friendly disagreement to assigning leadership roles to a director frequently on the losing side of votes.

The concept is to create a board culture that discourages lingering hard feelings and lets everyone feel included and that they are doing their part. It often ultimately comes down to inviting the sharing of different perspectives so all feel part of decisionmaking, regardless of the outcome, and valued even when votes do not go their way.

Take confidentiality seriously

has broken down. Establishing trust is not always easy but goes a long way.

A starting point in managing conflict in any setting is surfacing what parties have in common and working from there to positively collaborate in everyone’s interest. On paper, that should be easy enough to do on a condominium board comprised of people with a shared investment, volunteering their time in the spirit of community.

DelProperty_Condo_March_2018_torevise.pdf 1 2018-04-13 2:44 PM

It is often preached but not always practiced. Board members have access to sensitive and privileged information that they are not supposed to share outside of the board, including with the non-board members they are closest to. Preserving the confidentiality of the role allows directors to have something in common. It can help establish trust. I have mediated disputes between several boards that fall apart because trust among their members

In practice, it is not always that easy — particularly when difficult decisions have to be made. Making decisions as a team and standing together as a team is a key component to success. Rather than waiting until differences of opinion surface, it can be helpful for boards to develop shared understandings of how they will navigate their challenges before they face them. 1

Marc Bhalla, LL.M. (DR), C.Med, C.Arb, is a mediator and arbitrator. He can be reached at mbhalla@elia.org.

www.REMInetwork.com | September 2022 13 GOVERNANCE 18 50 20 C M Y CM MY CY CMY K

Freehold and lot line condos: WHICH INSURANCE DO YOU NEED?

It’s a common scenario: a homebuyer purchases what appears to be a regular townhome only to be told it classifies as a “freehold condominium.” This can be a confusing descriptor, but it technically holds true. The term “freehold” is frequently used as a marketing strategy to suggest purchasers are getting more than they would ordinarily receive when buying a unit, such as a front or back yard. That being said, a more accurate term for these types of condominiums would be a “lot line” condominium where the owner’s unit includes not just the building but also a portion of the land surrounding it.

Regardless of the marketing terms used to describe your condo unit, when you are setting up your personal insurance you should be most concerned if your condo is classified as a standard registration and what is indicated in your condominium’s unique standard unit description.

It is important to note that the most common kind of condo registration in the province of Ontario is a standard registration. If a condominium is not described as a “Common Element Condominium” or a Vacant Land Condominium” within the registered name of your condominium, then it is highly likely it is a standard registration condo.

WHO INSURES A FREEHOLD?

Freehold or lot line condos carry unique maintenance obligations, and this is where confusion over insurance can set in. Specifically, freehold or lot line condo declarations often hold owners more responsible for the ongoing repair and maintenance of lot elements (e.g., roof, building envelope, driveway, trees, etc.).

Reading this, owners then might assume that they need insurance to cover any sudden or accidental damage that occurs on their lot, but that is often not the case. In truth, the Condominium Act of Ontario states that if a condominium is a “standard registration condominium,” then the condominium corporation is required to insure the common elements and the units, but not any improvements to the units. That includes the actual homes and any other common corporation property such as curbs, roadways, and light standards. Moreover, condominium corporations must insure a basic level of finishes within each home, as described by the condominium’s standard unit bylaw. As such, it is critical to pay attention to your corporation’s standard unit bylaw to understand what materials and finishes are considered part of a standard unit, and thus insured by the condo. Anything over and above those standard finishes and materials need to be

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insured by the owner under a condo unit owner policy and are commonly referred to as betterments or improvements.

THE RIGHT POLICY

One question we get from owners of freehold or lot line condos is “What kind of insurance do I need?” The answer is that you should not be purchasing a standard home insurance policy, but rather a condominium unit owners’ insurance policy. This requires bringing a copy of your standard unit bylaw to your insurance broker and understanding what’s covered.

Overall, anything inside your unit that is not described in the standard unit bylaw is your responsibility to insure. As such, you should be sure to include the replacement value of any of those finishes or features (over and above what is listed in the bylaw) within your own betterments limit of insurance in your unit owners’ insurance policy.

To review, condominium unit owners are responsible for the following:

• Personal Property: such as furniture, clothing, appliances, electronics, any moveable property within the unit, all personal effects stored in lockers, etc.

• Improvements or Betterments: such as moldings, lighting, flooring, upgraded cabinetry, and anything over-and-above what is described in the standard unit bylaw.

• Additional Costs to Live Elsewhere: if your unit is so badly damaged that you cannot occupy it until repairs are complete.

• Personal Liability: condo owners are legally liable for any bodily injury or property damage arising out of their personal activities as a unit owner and from the ownership of your individual property.

• Charge Back of Corporation Deductible: unit owners may be responsible for the deductible under the Corporation’s Insurance Policy if the corporation has a bylaw that dictates this, or if the owner’s act or omission results in damage to any property the corporation is responsible for insuring.

• Loss Assessment Coverage: if there is a major property or liability event that results in a shortfall in your condominium corporation insurance, you may be personally assessed as a unit owner.

• Additional Unit Owner Protection: a unit owner policy should contain additional contingent protection to cover grey areas between the condo’s insurance and your own.

• Special Limits and Extensions of Coverage: there may be other special limits of coverage required for jewelry, bicycles, sewer backup, and other exposures that may exist. Your condo’s standard unit bylaw, like many others, may also indicate that the unit owner must insure all of their floor coverings. If this is the case, be sure to include the replacement cost of all floors above the sub-floor within your betterments limit of your own policy as well.

AVOID MISMATCHED POLICIES

If you purchase a regular homeowners policy to insure your property in a standard registration condo, you are making a big mistake. Not only will you have double coverage for a lot of the property that your condo already insures, but you could also be paying up to four times what you would for a condo unit owner’s policy. Additionally, you will be missing key elements of coverage that you need, based on exposures you have as a condominium unit owner.

IT PAYS TO GET ADVICE

The insurance requirements for a condo unit owner can be complex depending on the unit owner’s needs and their specific condominium bylaws. That’s why we strongly recommend working with an insurance broker that understands the complexities of condominium insurance and can recommend the right protection for you.

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There is a special fiduciary relationship between condo corporations and condo owners.
THE UNIQUE NATURE OF DISPUTES BETWEEN CONDO CORPORATIONS AND OWNERS

Expresses the duty of a condominium corporation to manage and control the common elements and to take reasonable steps to enforce the condo’s governing documents.

Unique obligations between condo corporations and owners can be found in various sections of the Condo Act.

Expresses the duty of condominium directors and officers to be honest and faithful.

Expresses the duties of condominium directors and officers to disclose conflicts of interest.

Along with related regulations, also expresses certain disclosure obligations of director candidates.

Along with related regulations, conveys the responsibilities of condominium corporations to keep adequate records and to make those records available to owners.

Essentially expresses the duties of condominium corporations, owners and others to avoid oppressive conduct.

The precise nature of fiduciary duties varies depending upon the unique aspects of the particular relationship, but in general, it requires being fair and open with the beneficiary and giving precedence to the interest of the individual or organization. Condo boards are likewise entrusted as caretakers of owners’ interests and to maintain harmony within the condo community. They have the duty to manage the common elements and enforce the corporation’s governing documents, as stated in Section 17 of the Condo Act.

This unique relationship will inevitably impact disputes. Corporations must take reasonable steps to enforce the Act, declaration, bylaws and rules, so when an owner (or an owner’s tenant) allegedly violates the governing documents, a dispute may well result.

A condominium corporation may ultimately find itself engaged in a battle with one owner in order to meet the corporation’s enforcement obligations to all owners.

But the “rules of engagement” are somewhat special when it comes to a dispute for such a matter. This can be seen in relevant court decisions and, more recently, in decisions

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Section 17 Section 37 Section 40/41 Section 29 Section 55 Section 135
Building
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of the Condominium Authority Tribunal (CAT).

The basic principles

• When engaged in a dispute, or potential dispute, with an owner, a condominium corporation needs to be completely fair, honest and open. A key goal is to ensure that the owner is fully informed and has any records needed to understand their rights and responsibilities.

• The goal isn’t necessarily to win the battle with the owner, but rather to achieve a result that correctly and fairly interprets and applies the condominium’s governing documents, for the benefit of all owners.

• The corporation should also provide reasonable warnings and reasonable opportunities for discussion and settlement (assuming, of course, the owner is willing).

Duties of fairness and openness apply to all combatants under our system of justice. But these duties are elevated in the case of a dispute between a condo corporation and an owner because of the corporation’s unique authority and responsibilities in relation to the overall community.

If a corporation fails to meet these unique obligations, this can have cost consequences if, and when, the dispute goes to court, the CAT or to arbitration.

Corporations that follow these basic principles can expect to be rewarded when a court, the CAT or an arbitrator decides whether or not to award costs.

Corporations that don’t may be less likely to recover costs, and may even see costs awarded against them.

In some cases, the consequences may go further. Condo corporations may end up losing enforcement rights that would otherwise exist under the corporation’s governing documents.

The CAT has recently expressed these basic principles Rahman v. PSCC 779 (CAT) (February 16, 2021)

“At some point in pursuing this matter, PSCC779 tipped over from aggressively pursuing its claims to harassing one of its condominium unit owners. PSCC779 persistently ignored Mr. Rahman’s claims, brushed off his references to the Act and the Mississauga Parking By-Law. Most egregiously, despite the letter from Mr. Rahman’s doctor testifying to the stress it was causing, PSCC779 registered a lien on Mr. Rahman’s condominium units and is now moving to enforce the lien by selling Mr. Rahman’s home. It is important to underscore that both the lien and the Notice of Sale are being pursued in contravention of subsection 134(5) of the Act, which requires a court order before enforcement costs can be added to Mr. Rahman’s common expenses….”

I find that the amount of $1,500 is fair recompense in the circumstances of this case and I will direct PSCC779 to pay Mr. Rahman this amount.”

PCC 96 v. Psofimis (CAT) (May 20, 2021)

“…PCC 96 was required to seek an order from the Tribunal for compliance only because Mr. Psofimis deliberately and repeatedly ignored the condominium’s numerous attempts to request his voluntary compliance. He disregarded notices, emails and letters and blatantly disregarded the agreement entered into by him, evidently not in good faith, promising to comply, all of which he did without apparent concern for the clear provision of PCC 96’s rules that would make him personally responsible for the condominium’s costs arising from his non-compliance. Therefore, on these facts an award of costs in the amount of $3926.75 is warranted.”

YCC 229 v. Rockson (CAT) (May 10, 2022)

“In the case before me, Mr. Rockson received multiple notices between October 2019 and September 2021 advising him of the corporation’s noise rules and requesting his co-operation and compliance…. He did not participate in this proceeding although he was given multiple opportunities to do so….. I am ordering Mr. Rockson to pay costs of $9,101.02, that is 100% of the legal fees and expenses the corporation incurred with respect to this proceeding.”

Decoste v. HCC 134 (CAT) (May 16, 2022)

“I also accept that the board took the time to hear and discuss Ms. Decoste’s situation, concerns, and request for an exemption with her, and although they ultimately decided that an exemption could not be granted, I find that the board made its decision on how to apply the rule in good faith and with due diligence.”

Disputes can sometimes become nasty and personal. The challenge is to be guided by the principles noted above, and not to let the nastiness knock you off track. 1

18 CONDOBUSINESS | Part of the REMI Network LEGAL
“A condominium corporation may ultimately find itself engaged in a battle with one owner in order to meet the corporation’s enforcement obligations to all owners.”
James Davidson and Nancy Houle are partners at Davidson Houle Allen LLP Condominium Law. dhacondolaw.ca
www.REMInetwork.com | September 2022 19

WHEN CONDO-DWELLERS OPEN AT-HOME BUSINESSES

While many businesses are now integrating ‘work from home’ practices into their daily work week, many of us have now returned to the office. But for some, the landscape has forever changed. During the pandemic, many restaurant owners were forced to cut their losses and close-up shop, while others looked

to shifting business to the new ‘at-home’ market.

This included restaurant owners who decided to take their businesses home with them. Earlier this year, an email came in from a concerned townhouse owner. The writer stated

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that a neighbour was running a takeout restaurant from their unit and was leaving their back and front doors open to let the heat escape.

Numerous cars were seen attending the unit to buy or pick-up food. The writer was frustrated since the intense cooking smells

20 CONDOBUSINESS |
From an ensuite take-out resto to teaching downward facing dog in the common areas, here’s the lowdown on the trendier work-fromhome shift, with some legal and insurance tips.

meant they were forced to close their windows and doors and were worried the additional vehicles on-site presented a danger to children in the community.

When the unit alleged to be operating the restaurant was contacted, they did not deny anything, explaining that since Covid they had closed shop and were cooking and selling from home. The owner stressed their compliance with public health inspectors who had been at the unit just the day before.

Mos t declarations in a residential condominium will have a provision relating to the permitted uses of a unit. It will commonly state that a unit can only be used or occupied as a private single-family residence. However, as stated by Sonja Hodis of Hodis Law, “you have to pay close attention to the exact wording of the declaration, as the definition of “single-family residence” may have different meanings in different condos and in different contexts based on the particular wording of your condo’s governing documents.”

Hodis recommends that if you are trying to ban or control a commercial type of activity at a residential condo, “you would be wise to introduce specific language into your governing documents, beyond just the declaration occupancy provision, to address the types of activities you are trying to control.” She further advises that not all home businesses or working-from-home arrangements are going to create a concern for condos. There may be some types of activity that a board is prepared to allow but there are other types of activity that the board refuses due to increased liabilities or costs for the corporation or a nuisance for other residents.

Hodis recommends that restrictions are focused on the activity that is not permitted rather than any particular type of business. She also advises that it is important to be precise in the language used in order to make it easier for the corporation to enforce

the provisions in the governing documents. “Ambiguous language will make enforcement difficult, and any ambiguity will be held against the corporation as we have seen in recent CAT cases,” she said.

Further to this is the potential impact on insurance. Many declarations will stipulate wording such as, “No unit shall be occupied or used in such a manner as to result in the cancellation or threat of cancellation of any policy of insurance maintained by the Corporation.”

The threat of insurance policy cancellation is a point David Outa, BA, CIP, CRM, Commercial Account Executive, Condominium Practice Lead with Cowan Insurance Group says is particularly poignant when dealing with commercial businesses operating from residential units.

“Clearly someone that owns a restaurant, that’s a commercial operation,” says Outa. “As soon as you bring it home, you’ve transferred a commercial operation to your home and typically, the residential insurance policy does not anticipate exposures relating to commerce. Cooking for your family is different than cooking for take-out deliveries— that means there’s a significant increase for risk of fire. The insurer won’t say, ‘well, we’re going to charge you more,’ they will simply say, ‘this policy is not intended for this type of exposure, therefore we need that to stop or else we are going to cancel the policy.’”

Would a home owner’s personal insurance provide any leeway? Unlikely, says Outa.

“There are two layers of insurance,” he explains. “There’s the corporation’s insurance, but also the unit owner’s. I can guarantee that the unit owner’s insurer will have the same concerns because the liability coverage you get on a home policy does not anticipate the chance of someone suing you because they got food poisoning from your commercial operations. Home insurers are very selective in the type of home/business exposures they will gladly insure—it’s a very limited scope.”

And what about yoga? Can a unit owner hold a yoga class—paid or not—on the common elements?

“Yoga is a little different,” says Outa. “However, remember the corporation is the occupier of the common elements which means that the liability which comes out of that can be assigned to the condo corporation. What the condo corporation’s insurer expects is that anybody using the common elements—if you’re a unit owner— that liability should follow you.”

“Unless the condo is the one putting on the yoga class, that’s a different issue, because then it is sanctioned by the condo. They (the corporation’s insurer) may not say they’re going to cancel the policy, but they will be looking to clarify that if something happens, that liability is going to be pushed back to the individual who is running that lesson.”

In terms of owners using common elements, Hodis cautions that this is another issue that needs to be clearly addressed in your governing documents, and condos must be careful what they allow owners to do on the common elements.

“Condominium corporations are ultimately legally responsible for what happens on their common elements,” she says. “As such, you do not want to permit an owner to carry on any type of activity on the common elements that will increase the corporation’s liability or costs or that will create a nuisance for other owners and occupants.”

Fine-tuning a declaration as well as your other governing documents is particularly important when negotiating commercial activity at your building. Decide if the wording is specific and clear. If you are not sure, it’s time to review with a condominium lawyer. 1

Ross Boncori, RCM, OLCM, has 15 years’ experience of property management and is a licensed condominium manager with The Enfield Group.

www.REMInetwork.com | September 2022 21 FEATURE
“Fine-tuning a declaration as well as your other governing documents is particularly important when negotiating commercial activity at your building.”
FEATURE

UNDER PRESSURE

Condos are on the receiving end of rising construction costs due to a confluence of factors, as Sally Thompson and Patrick Cutten detail on page 24. Property managers are seeing the strain as they navigate daily operations. A few in the industry offer advice on page 28, while Justin Tudor recommends some non-conventional ways to cut costs for capital projects on page 30.

www.REMInetwork.com | September 2022 23
FEATURE

THE RATTLE OF RISING CONSTRUCTION COSTS

Cost increases are a significant concern if a condominium needs to complete work in the next year or so. They may not have sufficient funds available or may deplete their reserve fund to a greater extent than planned for the project. But it’s not just the here and now that condominiums should be worried about.

StatsCan reports that the construction price index for residential buildings, which reflects the cost of new residential construction, has increased by 56% between Q1 2020, the start of COVID, and Q2 2022. While this index is not entirely predictive of cost increases related to repairing existing

residential condominiums, it is likely the best available proxy. Over the same period, most condominium reserve fund studies likely incorporated a predicted cost inflation of 5 to 8%, a difference of almost 50%.

Reserve fund providers typically maintain cost databases for the key unit prices that underpin reserve fund studies. These are being updated as soon as possible based on recently tendered work. Fortunately, in some cases, we are finding the actual cost increases to have increased less than this 56%.

However, for some projects, particularly material-heavy projects like window replacement, we have seen very significant price increases. As reserve fund study updates are completed on their three-year schedule, these new prices will be reflected, resulting in large increases in the required annual contribution and the related condo maintenance fees. Making matters worse, the projects with the largest cost increases are generally also the largest projects covered by a reserve fund and, as such, have an overweight impact on the overall contributions.

FEATURE
This past year has proved difficult to complete major building repairs. Costs are up — significantly. Contractors are hard to come by. Materials may not be available or may have significant lead time prior to delivery.

But what is underpinning the chaos? It seems easy to blame “COVID,” but it is less clear what is really going on. There is a series of unfortunate events combining to contribute to the chaos.

Labour shortage

There seems to be a shortage of labour in almost every industry. Is this because young people can’t be bothered to work after COVID? Seems unlikely. Ongoing impacts of self-isolation during infection? Probably part of the problem but can’t be the whole thing. Employees changed industries due to layoffs due to COVID? Possibly, but every industry seems to be short people, so probably not. Inefficiencies due to new operating procedures such as physically distancing of workers? Probably a contributor. Fewer immigrants? Net migration was down about 1.5% a year for 2020 and 2021, but has come roaring back in Q1 2022, with the highest immigration numbers into Canada since 1946, so that doesn’t seem to be the cause.

Perhaps, like most trends in the last fifty years, the labour shortage also relates to the

baby boomers. The average baby boomer reached age 63 in 2019. And many who were approaching retirement advanced their retirement due to COVID. Now there is pressure to return to the office after two years of working at home, which may trigger further retirements. Many industries rely heavily on these seasoned workers, from elevator mechanics to carpenters. Their experience makes them efficient. They are knowledgeable and train the next generation. And the next generations are simply smaller. Given the demographics, the labour shortage is likely a trend that will continue to haunt us for many years to come.

Material shortage

Material shortages are also having a significant impact. Sometimes the key components of the construction are not available. Early in COVID, it was a shortage of lumber. More recently, it is sealants, fasteners, sheet metal, aluminum, etc. We have become so used to the world operating efficiently on a just-in-time basis that we are not coping well when minor components become unavailable.

The initial reduction in global demand forced some suppliers to go out of business. As demand returned, there were fewer suppliers globally struggling to meet high demand.

Many construction products require multiple raw materials to manufacture. Some chemical ingredients might make up less than 1% of the overall formula of a given product, such as an elastomeric waterproofing membrane, but might still be essential. Manufacturers typically source ingredients from a global range of suppliers. Closures and delays at international factories dramatically decreased the availability of some products. Unfortunately, it isn’t necessarily a simple matter of substituting one ingredient for another with similar characteristics. Systems undergo rigorous testing to achieve performance ratings. Changing the chemistry of a product could require new testing to be completed in accordance with CSA and ASTM standards, which can be a long and costly process.

China’s zero-COVID policy, with mandated government lockdowns, has led to long lockdowns in major cities and

www.REMInetwork.com | September 2022 25
FEATURE

suspended operations in many factories which are still contributing to challenges related to material availability.

Supply chain challenges

North America imports many construction products and raw materials from overseas, particularly from China and India, primarily by container ship. The strict COVID-19 restrictions in Asia also caused widespread closures of port facilities in 2020, 2021 and 2022, resulting in shipping bottlenecks.

Labour shortages at Canadian and U.S. ports continue to delay unloading of the shipping containers. This has been compounded by the increased use of larger shipping vessels, meaning that more volume is being directed to the few ports that can handle these larger ships. Today in the U.S., 40% of all containerized cargo goes through just two ports — Los Angeles and Long Beach. The limited capacity of these ports contributes to the bottleneck.

The rise of e-commerce during COVID has also had an impact. Our global transportation systems were not built for a world where anyone can order anything to be delivered to their door with a couple of taps on their phone. The rapid rise in direct-to-consumer transportation has increased congestion at rail yards and warehouses.

Adding to the chaos, there is a global shortage of truck drivers. According to industry associations, the industry has failed to remain attractive to young employees and is struggling to fill thousands of open positions in every country.

Combined, these factors result in sluggish and expensive movement of goods around the world.

Lack of available contractors

Lots of construction projects were postponed at the start of the pandemic. Contractors are now working through a large backlog of

26 CONDOBUSINESS | Part of the REMI Network
“Our global transportation systemswere not built for a world where anyone can order anything to be delivered to their door with a couple of taps on their phone.”
FEATURE

projects, effectively completing more than one year’s worth of work in a year. This should work itself out over time.

Other global impacts

As if COVID were not enough, there has been a confluence of other global impacts that have also contributed to our challenges. These include Brexit, which created major changes in trade rules, the 2021 Suez Canal obstruction, which froze more than $10B in trade a day, the 2021 “Big Freeze” in Texas, which knocked out many chemical manufacturing plants and refining operations for many months, the 2021 Xinjiang Western Hesheng Silicone plant fire which was large enough to impact production of many products globally, the 2021 extreme weather events in B.C. which impacted cross Canada rail and trucking transport, the drought in Europe which has restricted shipping capacity along Europe’s rivers, and the ongoing Russia-Ukraine war.

Our systems are holding up remarkably well considering these shocks but are creaking under the load.

What can a condo board do?

Plan ahead. Secure contracts and have the contractor order construction materials immediately afterward because there are long lead times that can easily consume our short construction season. Take possession of materials as soon as possible. This approach helps manage a schedule, but also helps mitigate the risk of costs rising further between the time of the contractor bidding the project and securing the materials. Contractors can typically store these materials in their facilities or onsite to ensure they have them available when needed.

Deferral of projects may not be the best plan because there are no guarantees that inflation won’t continue to race ahead of a condominium’s ability to earn interest on their fund balances.

Manufacturers are optimistic that many of the bottlenecks will clear in the near term. There are some underlying demographic trends and climate change- induced weather phenom ena that will continue to drive prices upward. Condominiums must prepare themselves to face significant reserve fund contribution increases at the time of their next update. 1

Sally Thompson is a managing principal at Synergy Partners, past-president of CCI Toronto and director of CAI Canada. Patrick Cutten is a project manager at Synergy Partners.

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www.REMInetwork.com | September 2022 27
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RIDING NEW WAVES

Inflation, supply chain disruption and labour shortages are collectively affecting both capital projects and day-to-day operations, says Yasmeen Nurmohamed, President of Royale Grande Property Management Ltd, based in Toronto.

She is seeing condo boards give additional consideration before embarking on capital projects or pausing on more cosmetic projects. In some cases, bigger ticket items are being phased due to

longer lead times for materials, which also cost more, prompting boards to select base finishes over upgrades.

“The cost of projects is higher than budgeted in the reserve fund study,” she adds. “Contributions will have to be increased to ensure the reserve fund is adequately funded in accordance with the Condominium Act.”

According to Statistics Canada, residential construction costs increased

5.6% in the first quarter of 2022, the highest since the second quarter of 2021.

“Most interestingly, a portion of the costs was attributed to the labour short ages,” says Val Khomenko, Senior Con dominium Manager with Toronto-based ICON Property Management. “With workers taking on more responsibilities, the results are increased salaries due to demand. These costs are, by extension, passed onto the end user.”

28 CONDOBUSINESS | Part of the REMI Network
As condos across Ontario grapple with rising construction costs, property managers on the ground are experiencing the impacts up close.

Contractors are also offloading the increased cost of transporting building materials. “Contractors have begun adding fuel surcharges and other auxiliary costs such as PPE to the invoices,” says Khomenko. “This becomes a difficult conversation with condo boards as we enter the budget season.”

On the ground, he’s also seeing specific pressures on every scale.

“One of our clients is currently planning a major hallway renovation and the original budget estimate from 2021 has skyrocketed by at least 40%,” he says. “On a smaller scale, window and door orders that used to take four to six weeks are now delayed into months. Certain flooring products have seen deliveries pushed to six to eight months. As a result, pricing in these items fluctuates robustly.”

Trades are also less committed to hold prices on quotes, adding to the pressure of long-term financial planning. “Budget figures committed to in long-term planning a couple of years ago are no longer applicable,” he says. “There will be over budget spending in projects and maintenance, no doubt about it.”

Angel-Marie Reiner, President of Kitchenerbased Onyx Condo Management, reflects a similar sentiment. “Where once pricing was held for 30 to 60 days, now it is only held for a few days,” she says. “As a result, it is more challenging to coordinate with a board of directors since more time is required to make decisions than just a few days.”

A lack of expedited services in dayto-day operations is also causing stress among residents. “Longer than normal wait times for regular service calls because of labour shortages and supply chain issues are affecting relationships with boards and owners and residents who are accustomed to prompt and excellent service,” says Nurmohamed.

There are various examples, of which plumbing is one. “Before, when you’d call a plumber, they would come the same day or next day. Now, they’re coming days later because they’re so busy,” she adds. “It’s also taking a while to get parts.”

One building she references, during an interview in mid-September, is still waiting for a chiller relief valve. “It was ordered in

May and we’re still waiting for the part,” she says. “We’ve been able to safely operate our chiller without it, but imagine if the chiller went down? All summer we wouldn’t have had cooling.”

Kirsten Dale is a property manager at MCRS Property Management in Huntsville, which services condos in Simcoe, Muskoka, Parry Sound and Haliburton. She’s finding that besides longer wait times to begin large-scale projects, it’s harder to even complete smaller projects at all.

“Trades are swamped, materials are hard to get, and labour is impossible to find,” she says. “If you have a single railing to get re-painted, you are better off trying to find a few other little tasks to bulk in with this work to make the job more desirable for trades to bid on. Otherwise, you are potentially paying a much higher-than-market rate for the trade to afford to take on such a small task.”

Insurance costs are also affecting the budget. As Nurmohamed explains, in the last couple of years, insurance costs rose because of the hard market, with larger claim payouts and fewer underwriters. “This year, insurance appraisals are increasing the value of buildings because the cost of construction has increased significantly,” she says. “The result is increased premiums.”

“The reprieve we thought we were going to get from the hard market is now being replaced by another issue.”

Consequently, there is an upward pressure on the entire budget; it’s not just one line item, such as insurance costs as well as staffing costs from the minimum wage hikes.

With various issues beyond control, it makes budgeting much more challenging and the future tricky to predict. She advises that budgets remain realistic of the current conditions, while balancing the needs of the owners. “Our goal is to have well-maintained, aesthetically pleasing, and financially healthy communities.”

The trend of keeping annual increases to reserve contributions as low as possible needs to end, adds Dale. “If a board is consciously projecting 2% to 3% increases for inflation, they need to reconsider this strategy.

Low fee increases will only help to maintain popularity to a point.”

“When major funding needs arise and a board has not adequately funded the reserve account in advance, the owners remain on the hook for any difference from what was funded and what is needed.”

A proactive approach to capital projects is also something Reiner’s team stresses, suggesting that corporations complete reserve fund studies earlier than required to build increases into the funding plans, and adding a contingency to the overall budget.

“Depending on the project's scope, we generally suggest 5% to 10%; this helps with the what-ifs," she says. “We also recommend that a preventive maintenance schedule is followed for items like mechanical systems and roofing. This provides a more cost-efficient solution rather than waiting for something to happen and having a costly repair.”

When planning ahead, Khomenko points out there is “no appetite in today’s industry climate to bear higher increases in condo fees or special assessments,” especially thirty years into the future where current owners won’t see returns on such investments.

“We see decisions are being made favourably on the short-term basis,” he says. “With rampant inflation, it would be irresponsible to saddle future owners with costs that can be planned ahead of time.”

Beyond prioritizing, he suggests looking outside traditional methods of raising fees or special assessments.

“With the higher inflation than the interest rates, there has been an increasing trend in borrowing to cover the shortfalls in project costs,” he says. “There are lenders who would provide the analysis of the reserve fund study needs and cash flow projections to ensure that borrowing is a viable option.”

He also urges a clear communication strategy with residents, one beyond the required notice of future funding.

“It is important for the owners to understand the implications of low condo fees on the long-term viability of the physical asset,” he says. “The case of short-term pain for long-term gain has never been more applicable than it is today.” 1

www.REMInetwork.com | September 2022 29 FEATURE

NON-CONVENTIONAL WAYS CONDOS CAN REDUCE CAPITAL PROJECT COSTS

The 2022 condominium-related restoration-construction-inflation issue is even more challenging than it sounds. Ongoing challenges to capital replacement project costs are wreaking havoc on already stressed reserve funds and causing anxiety for boards and property managers throughout the province.

There are tried and true ways to decrease imminent costs of capital projects:

Spend Less: Defer that work. Assess the urgency of the need by way of inspection and, where appropriate,

provide immediate maintenance to extend service life—even if beyond its reasonable payback.

Spend More: Take advantage of the economies of scale to group projects,

where appropriate, to decrease overall unit costs. Replace two roofs, instead of just one. These practices seem simple enough, but where else can we save in the current environment? Everyone is having to think

30 CONDOBUSINESS | Part of the REMI Network
1 2

outside the box to squeeze pennies into hundred-thousand-dollar bills. Here are a few of the non-conventional approaches to limit capital expenditure costs:

Resist the urge to throw in the kitchen sink

Is your corporation replacing a parking podium membrane; and because they’re onsite you’d like the contractor to replace the parking stairwell roofs to minimize overall disruption? Maybe that’s a good plan to limit the amount of construction traffic, but the contractors who perform garage membrane repairs are not the same as those who typically replace conventional flat roofing. By putting two separate projects under the same contract, you’re requiring that one contract to carry a marked-up subtrade to execute the part of the work they are less familiar with. If the project is severable, let’s stop trying to make roofers use jackhammers.

This idea can be extended to projects where the work typically would go together. Envision an asphalt walkway replacement that may typically include landscape reinstatements adjacent to the walkways. Asphalt contractors have been doing landscaping next to the walkways they’ve ripped out for years, but what do asphalt contractors really want to do? Asphalt.

More and more, corporations have found cost savings by taking these slightly trickier components of the projects out of the principal work and discussing and negotiating landscaping touch-ups with their regular landscape maintenance crew. The savings associated with removing the landscaping from the asphalt project far outweigh the cost of performing and coordinating the landscaping repairs with their regular service providers.

Do you actually need that middleperson?

Although construction consultants can form an integral part of protecting a corporation’s interests and providing independent analysis, in some projects, they cannot provide the level of insight that might be necessary for most cost-effective capital projects. Designbuilders in corridor refurbishment projects, for example, have a greater control over initial budget estimates, deliveries, and scheduling than a typical construction consultation can.

When the corporation engages directly with a design-builder, they’re able to see a little more transparency into the decisions and the approach of the contractor. This can be valuable when a project runs into cash-flow and budgetary considerations as the design-builder is able to provide more real-time analysis into how changes will affect costs and offer unique strategies to control them before they snowball.

Like-for-kinda-like

Be creative when interpreting whether an element is required to be replaced with its direct equivalent. For example, silicone caulking is only slightly more expensive than polyurethanes, but has a considerably longer service life. When you’re looking at a $1M polyurethane like-for-like caulking replacement, consider a reasonably comparable $1.05M silicone to save money on the deferred funding obligation.

As polyurethanes breakdown in UV light and silicones do not, the former will be factored into your reserve funding plan with a service life of 3 to 5 years shorter than the

latter. In large enough projects, this decrease in funding requirements will offset the additional capital expenditure in a single year.

These options are not truly zero-cost. They come at the expense of a little more design effort up front or additional time expenditure and attention by building operators to execute. Implementing these scenarios means moving away from the standard design-bid-build model or blurring the line between operating expenses and capital expenditures during projects. But given the financial climate, this may be quite beneficial. Every project is different. To protect buildings, boards, managers, and consultants need to consider unorthodox approaches to cost savings as we ride this roller coaster. 1

Justin Tudor, P. Eng. is president and engineer at Keller Engineering, a building envelope engineering and building science firm that provides building and systems assessment and associated repair and renewal consulting services since 1982. He can be reached at jtudor@kellerengineering.com.

FEATURE

EFFECTIVE DECISION-MAKING

32 CONDOBUSINESS | Part of the REMI Network
The board of directors in a condominium is elected to represent the best interests of the entire community. Once elected, they are required to make some difficult decisions and have a fiduciary responsibility to follow the advice of professionals.

Running a condominium is like running a business with a multi-million-dollar budget. Unfortunately, in many cases, the decisions are personal. For example, if a building needs a budget increase to meet its financial commitments, and a board is adamant about having a zero increase, often the same building will have a deficit the following year, or a few years down the road will require a double-digit increase.

Directors are only board members in a duly called board meeting. They should avoid speaking to residents or contractors on behalf of the board and always refer them to management. This helps avoid personal liability. Directors’ and officers’ insurance will cover board members when they are in a board meeting or making decisions with the entire board for corporation business. However, acting on their own may result in a personal lawsuit.

Look to the professionals. The lawyer, engineer, auditor and property manager (yes, the manager) bring a wealth of experience and knowledge. Ask their opinions before making major decisions. This is another way to shelter yourself from personal liability.

Board members also bring talent, knowledge, and experience and should take the time to get to know one another.

After each annual general meeting, take five minutes for introductions, including education, skills and what they hope to bring to the board.

Engage management

Include the manager in this process. The industry is facing a manager shortage crisis, with more than 11,000-plus condominiums and less than 4,000 licensed managers. Give managers an opportunity to explain their background, education, and experience. Many have worked in a multitude of diverse properties over the years, have immigrated to Canada or have taken on property management as a second career.

In addition to the on-site manager, the management company also has a team of specialized individuals who provide extra services to the corporation behind the

scenes as a free resource. Managers with an RCM designation from the Association of Condominium Managers of Ontario (ACMO) have completed a minimum of four college courses and successfully passed a rigorous exam attaining a minimum of 75%.

An ACMO 2000 Certified management company has been independently audited and successfully demonstrated a solid foundation to guide boards on governance. Working together as a team while treating everyone with respect is essential. Everyone has value.

A board that practices good governance will come prepared to meetings, having read the meeting package in advance, sought answers from management and reviewed the financial position of the building. Meetings should be scheduled between 1.5 to 2 hours as most individuals (board and management) have already put in an 8 to 10-hour day at the office.

Start with a good agenda

To enable full participation of the board, the manager asks at least one week before preparing the board meeting package if anyone wants to add something to the agenda. This will help equip the manager with information so the item can be discussed effectively. Each task on the agenda should have an allotted time assigned to the topic.

In most buildings, the minutes of the previous meeting are circulated to the board within 7 to 10 days of the meeting. Everyone should read and advise management of edits beforehand in order to approve and sign the revised minutes at the meeting quickly.

A highly effective tool is a consent agenda, which would contain items to easily make decisions in a single motion. Samples would include approving the minutes, approving purchases where three quotes have been obtained, and where there is a recommendation from management, and it is within budget. The consent agenda should include items discussed and approved via email between board meetings. These would be called decisions to be ratified.

Some boards will also include changes to policies on a consent agenda. This may be a scary mind shift for some boards. The key to a consent agenda being effective is asking the entire board at the meeting if they want to move anything from the consent agenda to the main agenda for discussion. A consent agenda allows the board to avoid dwelling on the minor items and instead remain focused on discussing important things (or ones in which there will be a debate). Do not hesitate to invite the contractor or another professional to the meeting to better understand the problem and proposed solution.

Read the financial statements

Finally, take the time to understand how to read the corporation’s financial statements and reserve fund study. The balance sheet will provide a snapshot view of the assets (what you own), liabilities (what you owe) and equity (net worth). The income statement provides details of the budget and expenditures and how you are going to budget (variances).

It is essential to have an explanation of variances and have a plan to get back on budget. For example, if there was a particularly hard winter, and the utilities are over by $20,000 to $50,000, determine if one window cleaning, rather than two, will make up the shortfall.

The reserve fund is a plan for long-term expenditures; it is not to be taken lightly and needs to be realistic. Monitoring operating expenditures—for instance, several pinhole leaks— may mean bringing forward that pipe replacement project. The reserve fund and its items should be moved forward or back to ensure financial stability and overall upkeep.

The essential key to good board governance is effective decision-making, both in and out of the board meeting. Be prepared, take time to be informed, and seek the input of others and the counsel of the professionals. 1

Laura Lee, RCM, CCP, GL, is an ACMO Board Member and Executive Assistant at Duka Property Management.

www.REMInetwork.com | September 2022 33 GOVERNANCE

PROMOTING PM AS A CAREER PATH

If you take a moment to research job fairs or review the career paths that guidance counselors share with high-school students, you would be hard-pressed to find much on the topic of property management. Instead, it's often described as an addition to the "main event,” such as real estate agent or asset manager.

34 CONDOBUSINESS | Part of the REMI Network

“Younger people entering the workforce crave mentorship opportunities.”

Condos across Ontario need more property managers in the field. Unfortunately, there are not enough to effectively support the current number of corporations and the constantly growing market.

Property management can be a very rewarding career. As a growth industry, the sky’s the limit, from property administration to vice president of operations.

But in an industry that doesn’t necessarily promote itself as a career path, getting people to join the profession, including young professionals, requires a great deal of awareness, which is currently lacking. How can the industry collectively evolve and bring more attention to property management as a rewarding choice?

Property management professionals oversee homes and communities to ensure they are in good working order— compliant, clean, and safe. Thinking of such responsibilities spotlights the critical aspect of this role, one that is often misunderstood.

Often, the perception is that managers work exclusively for the board of directors. The role can be seen as a bit of a “paper pushing” role when, in fact, there are various facets that shape the everyday reality of a property manager—one that is far from dull. Knowing one is a trusted member of a community, invited into people’s homes, brings a sense of appreciation and accomplishment. Perhaps more people should understand this when considering joining the field.

To attract new hires, those in leadership roles can collectively share success stories, promotions, and their personal growth journeys within the industry. Social media is a great start, and one way to track views is to include meaningful hashtags, such as #wearehiring and #joinourteam.

Try and get front-and-centre at career fairs, held in regions across Ontario, including post-secondary institutions.

When property management firms participate in them, this helps create awareness. Also focus on hiring co-op students from both high-school and post-secondary school. Posting a job as a property administrator in an institution’s job bank may help bring forward interesting candidates.

Another option is to hold virtual career sessions. Ideally, it will attract talent to your firm. However, looking at the larger picture, it may also help shine a light on the career. When sharing with participants the process of becoming licensed, growth potential and salary expectations would be interesting topics to include.

Mindful mentorship

Property management companies looking to attract the best talent should also focus on mentorship opportunities to promote the profession and help young people gain experience.

In fact, younger people entering the workforce crave mentorship opportunities.

In the Colliers Post Pandemic Student

Workplace Preferences Repor t this past summer, post-secondary students surveyed in Canada expressed what they value about the office. Strong bonds with mentor relationships and professional development figured highly into their preferences. The Deloitte Global 2022 Gen Z and Millennial Survey, which offers insight to attract and retain this talent, found the exact same sentiment, with additional insight into reverse-mentoring where young voices want to be listened to as well.

There are also many organizations look ing for speakers to share perspectives on the industries they work within. They are a great place to connect with young profes sionals and those looking to make a career

change. The Dream It, Be It program, for instance, from an organization called Sorop timist, partners business owners with secondary school female students to help them navigate career options. This group also holds a fair where students can learn about each mentor’s business.

Mentorship is also a great way to transfer skills and knowledge in an industry where skilled managers are becoming more scarce, and the generations that follow are keenly interested in upping their skills. Reaching out to vendors and partners and asking them to hold educational sessions or lunch-and-learns can help new hires better understand the many facets of property management and gain confidence to thrive and grow internally. Likewise, various organizations offer free or paid hybrid sessions for this same reason.

Finally, tapping into what drives future managers is key. As the Deloitte survey revealed, Gen Z and millennials are “deeply worried” about the state of the world and such issues like climate change, of which buildings are large contributors. As one example, the property management sector can empower this socially-minded group to drive change and mitigate greenhouse gas emissions in the built environment. Since this group also wants to work for an organization with purpose, one that cares about making a difference, try promoting those green initiatives and charitable events.

Collectively celebrating those who are currently in the condominium property management industry and welcoming with open arms those who are looking to join has never been a more crucial pursuit. 1

Angel-Marie Reiner is the President of Onyx Condo Management, based in Kitchener, Ontario.

www.REMInetwork.com | September 2022 35
MANAGEMENT

WATER IOT:

GAME-CHANGING WATER MONITORING TECHNOLOGY FOR HIGH-RISE CONSTRUCTION PROJECTS

In the insurance world, it’s often said that ‘water’ is the new ‘fire.’ And the new normal for annual catastrophic losses related to water damage is around $2 billion, according to the Insurance Bureau of Canada (IBC).

But the problem is even more acute in highrise construction projects, where it can be hard to pinpoint a leak, or when a leak occurs at night, or on the weekend when the site is unoccupied. That means a small leak can turn into millions of dollars in damage during a project.

Severe water damage causes several challenges for construction companies. Related project delays can translate into increased costs in labour and materials and can also drive up financing costs from lenders to finish the project, heavily impacting developers’ bottom lines. The reality is that water damage during the construction stage of a building is one of the largest risks to completing a project on time and on budget.

“Water damage is a very common occurrence these days with high-rise construction, in both residential and commercial occupancies. Each loss is unique but the common denominator is water and gravity — a destructive combination,” says

Jonathan Graham, Underwriting Director of Construction & Contracting with Northbridge Insurance, a leading Canadian commercial insurance provider.

“We look at the frequency and severity of water losses, and in the last five years both have been trending in the wrong direction,” he says.

The impact on losses and project delays is why both the insurance and construction industries have begun seeking out risk mitigation strategies, such as water leak and flood protection technology. This technology – widely being retrofitted for years into existing buildings and structures — also has applications during the construction phase of a building.

Recently, Northbridge worked with two developers and their brokers to roll out water IoT (Internet of Things) technology during the construction phase of two highrise projects. The goal was to test the technology’s effectiveness in mitigating and reducing water damage. To better support the construction industry, Northbridge has since partnered with a leading water IoT solutions provider to offer discounts to

customers on construction water leak and flood protection.

Here’s how the technology works: Temperature, humidity, moisture, and water detection sensors are strategically placed around a building and communicate via a Long Range Wide Area Network (LoRaWAN) — since construction projects are unlikely to have internet availability. The sensors are connected in real-time to a dashboard and mobile app, providing 24/7 monitoring. If water is detected where it shouldn’t be, or water supply exceeds a predetermined parameter, alerts are sent to key contacts and water valves are shut off automatically or remotely through the app.

The technology is sophisticated enough to sense moisture levels and to differentiate between normal and excess water flow for a duration of time. And while it may not prevent a leak from happening, it can catch a leak in real time to mitigate damage.

On a project in partnership with Northbridge, Jones DesLauriers Insurance Management Inc. (JDIMI), a professional services firm specializing in corporate risk management and employee benefits solutions, worked

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with Tribute Communities, a builder of highrise and low-rise communities.

Together, they tested a water IoT solution in a high-rise construction project which was of particular interest to Tribute, as they’d had to make four water-related claims on a stateof-the-art commercial space about a decade ago. As a result of the damage, they had to rebuild the space three times over the life of that project.

“Those four leak claims cost us close to a year and a half,” says Gus Stavropoulos, Chief Financial Officer with Tribute Communities.

“We learned a lot in that building and we learned there has got to be a better way to do this.”

When they rolled out water IoT sensors during the recent construction project, they didn’t have any significant water claims and credit the risk mitigation benefits of the technology for that outcome.

“We had one case where we got ahead of it,” he says. “There was a report of a pressure leak, and our staff quickly got the alert and dealt with it and it was done. It was a loose valve, but that could have turned into a quarter-of-a-million-dollars in damage— and a couple turns of a wrench saved us a lot of problems.”

He believes water IoT technology will revolutionize loss exposure on high-rise construction projects — and that the industry as a whole needs to be at the forefront.

“I wish this technology was available 10 years ago when we had a $3.5 million water damage loss,” says Michael Kucharuk, Partner and Account Executive with JDIMI. “Overall, I’m glad to hear Northbridge is proactively addressing water damage in construction projects through technology and connecting with GCs and brokers on the issue.”

While there are hundreds of insurance providers registered in Canada, only a handful specialize in course of construction projects.

“There are definitely fewer insurers now than prior to 2020. Of those still available, they may not be comfortable covering 100 per cent of the risk and so multiple insurers are needed to cover a portion of the risk to reduce their exposure in the event of a loss. This means that more negotiations are required due to the nature of having multiple insurers participate — especially on large multi-tower projects,” says Cathy Ciccolini, Partner at Masters Insurance Limited, which also partnered with Northbridge on a water IoT pilot project.

She believes water IoT technology will be useful to the construction industry in the future — it may even become a requirement, like sprinklers or smoke detectors. Future projects will be marketed with ‘no water damage claims’ from past projects, allowing new insurers to offer potentially more capacity, as well as better rates and deductibles.

“I strongly recommend developers adopt this type of protection. Most of them have had a water damage claim — some small, some larger,” says Ciccolini. “I impress upon them that water damage claims will affect the next project I have to place for them.”

“While it is still very much in its infancy in this part of the world, genuine interest from both developers and insurers is prevalent and gaining momentum,” Kucharuk says. “Not that long ago, developers heard about IoT technology as a new ‘thing’ that may come to fruition one day. This clearly isn’t the case anymore — forward thinking developers are familiar with how to use the technology to their benefit.”

Indeed, he says it’s a natural, pragmatic

progression to help reduce both frequency and severity of claims, which is key for insurers and vital to developers — as it will greatly aid in keeping their construction timelines on track and reducing water damage costs.

“There’s a lot of opportunity to reduce the likelihood but also the size of a water leak, so we can prevent or mitigate the risk by using this technology. It’s about identifying where the issues are and also being able to act remotely,” says Christopher Mastro, Director of Risk Services with Northbridge Insurance.

Developers also have the ability to pass on the cost of water IoT technology to the building owner once the project has wrapped up. And building owners can benefit from the technology post-construction, as it can help mitigate potential ongoing risks and insurance costs.

“It’s probably more cost-effective to put it in during construction because you can protect the site and ensure owners occupy the building on time. If your building is 98 per cent done and a hose comes off a toilet on the 12th floor, you could set your whole project back by months,” says Mastro. “But for building owners, it offers ongoing risk management.”

While the technology can’t necessarily prevent the frequency of water-related events, it can have a dramatic impact on severity — providing timely insights to reduce the severity of loss — which is a winwin-win for construction companies, insurers and ultimately building owners.

Northbridge Insurance, Northbridge and the Northbridge Insurance Logo are trademarks of Northbridge Financial Corporation, licensed by Northbridge General Insurance Corporation (insurer of Northbridge Insurance policies). This resource is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.

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THE WILD WEST

Governing Condos in Alberta

Condos are ideally designed to operate with relative simplicity, and in a well-managed complex there is a measure of security and community. But this doesn’t happen organically.

Good governance is truly the life blood of successful condo corporations and requires effective and enforceable provincial and jurisdictional legislation, a thoughtful and transparent board of directors, an active ownership group and a w ell-informed professional management company.

Condos can face devastating circumstanc es, from serious construction deficiencies going unseen for years and insufficient annual contributions to the reserve fund, to a board of directors reluctant to share the results of engi neering investigations and make difficult deci sions. It only takes a couple circumstances to attract the attention of major mortgage lend ers and mortgage insurers, who are increas ingly raising red flags and declining to partici pate in purchase transactions.

A number of commercial condo insurers have dropped out of Alberta’s market due to huge losses, largely related to relatively recent natural disasters and the staggering number of water damage insurance claims. Commercial insurance premiums have increased as much as 400% over the last few years, triggering cash calls and/or devastating monthly contribution increases.

Mortgage lenders and commercial insurers are increasingly concerned about the renter-to-owner ratio, external financing/loans being necessary to complete major repairs and conversions. In response, an increasing number of private/specialist lenders have popped up and are waiting in the wings for a condo to fail and need a large cash infusion.

In addition to hands-on governance and management, condo owners should be well protected in provincial legislation over condominiums’ standards and practices.

Some jurisdictions do much better than others in this regard.

Here in Alberta, there are few industry or community-based organizations to guide new board members or new condo owners in their rights and/or their responsibilities.

Only recently has a system been implemented to regulate condominium managers (who can hold an enormous amount of money in trust), provide ongoing education, issue or withhold licensing and keep them accountable to some form of legislation. Government or community-based resources are increasingly online and if you are of a generation that wasn’t born into our current technological landscape, you can feel left behind. The best approach is multifaceted.

Owners need to be inspired to be interested in the corporation’s documents and its business generally. There’s a lot of information if you want to go and look for it, but how to motivate owners and buyers remains a struggle. Most jurisdictions have implemented some type of dispute resolution/ conflict tribunal for easier and less expensive access to justice and settling disputes. Owners in Alberta are crying out for this type of tribunal because their only option is to file a court case.

Court cases can be very expensive, time consuming and difficult to win because judges ultimately determine that a board of directors “made up of volunteers is doing the best they can”. Conflict resolution tribunals can be made up of a combination of lawyers steeped in the legislation, members of homeowners’ associations (HOA’s) and owner/buyer advocates. A modest $2 to $5 annual contribution from every condominium

door in the province would fund this tribunal, but Alberta has yet to respond to the dire need from the ground level.

Condos are hot; they are always going to buy and sell fairly quickly and will remain a very popular option but they will always require a measure of pro-advocacy and proactiveness.

Confidence is in the details, but only rises to the level in which you are invested and participatory. Harmonious community living is enhanced by a relatively shallow dive into the business of the corporation, supportive legislation and an understanding that when you take your hands off the wheel, you can end up in a ditch.

Good management and governance is key in group ownership endeavours. Recommendations from a study of best practices by the University of Alberta highlight easy accessibility to information, implementation of dispute resolution services, working across all available platforms to engage and communicate with both owners and consumers and providing clear and transparent information in plain language and targeted to the appropriate groups.

For potential condo buyers, the best protection might be a comprehensive review of the corporation’s required disclosure documentation and candid opinions and discussions with appropriate professionals about the state of affairs from both financial and physical perspectives.

Owner apathy and lack of participation can devastate a condo and its owners. 1

Sharon Blondin is the president and owner of CondoQuest and a director of the Condo Owners Council of Alberta.

38 CONDOBUSINESS | Part of the REMI Network
GOVERNANCE
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THE TRUTH ABOUT SOUND CONTROL UNDERLAYMENTS

This is especially true after the pandemic, which has seen a dramatic increase in noise complaints with a large part of the population still working remotely from home. Having the necessary knowledge about building materials and a property’s floor/ ceiling assembly type will help for approving the right acoustic underlayment.

Equally, if not more important, corpo rations should remain skeptical about the claims made by various companies when it comes to their acoustic test ratings.

Perhaps dive a little deeper when that sample and spec sheet lands on the desk

from an eager homeowner looking for a speedy approval. At this stage, it’s not enough to simply approve an acoustic underlayment based on the single sticker value alone, most commonly recognized as an IIC or FIIC value, for example: IIC or FIIC 73.

If the indicated IIC or FIIC rating is over 70, proceed with caution. “F” stands for field tested, opposed to a laboratory test. Both tests follow ASTM

It’s at this critical point when property management can demonstrate due diligence in order to protect its reputation and the integrity of the building it represents. Doing

so can help prevent a corporation from getting into legal trouble, but mainly avoiding a poor reputation and ensuring a better quality of living for all residents.

“Property managers could chime in on their opinions about acoustic underlays however they most often do not have the professional expertise to conclusively opine on whether an acoustical underlay sample is satisfactory and compliant with a corporation’s governing documents,” says Natalia Polis, a condominium lawyer at Lash Condo Law. “Just as owners are not flooring professionals, neither are managers. We would strongly recommend

40 CONDOBUSINESS | Part of the REMI Network
With the increasing number of people living in condominiums, the need for superior sound control underlayment has become more prevalent than ever.

against managers making unilateral, on-thespot decisions like these. Liability lays if the manager signed-off on the acoustic underlay and ultimately the underlay is unsatisfactory.”

Decision-makers should ask two questions

How was the acoustic underlayment tested?

As land price is at a premium in cities, property owners with houses grouped together can demand much higher prices than they could by selling individually. Any contiguous group of properties can become part of a land assembly, but most often land assemblies include properties along or near a major transport conduit.

The first and most common sign that a property manager or condo board might have a problem with an acoustic underlayment is its packaging or literature, which doesn't show the building assembly that was subjected to the testing. This is typically the result of the company's strategy to hide the true IIC or FIIC rating. A sound test report should include a detailed description of the floor and ceiling assembly that it uses. Without this, the results are meaningless.

Older districts with single-family homes are a prime location for this kind of development. One example of a condo or mixed-use land assembly area is the Eglinton corridor in midtown Toronto, with its blocks of small residential properties all grouped together right along the new Eglington LRT.

The properties involved in a land assembly deal aren’t always treated equally, depending on the circumstances and groups involved. The sale price could be an equal share for each owner, or might be per square foot, or even based on where in the assembly that property is located.

Moving onward, the material's composi tion is also important for downstream prob lems. As the product ages, will it harden, crush, or absorb?

What is the product made of?

The new outperformer of all antivibration and acoustic underlayments is

In the case of the Eglinton corridor example, a developer would likely value a property bordering Eglinton Avenue higher than one further from the main road, especially if it would form a corner of the new property.

rubber. Its superior sound control properties and strength make it ideal for mitigating impact and vibration.

Is it Possible to Get Left Out of a Land Assembly Deal?

Yes it is. The property owners have high selling power because the developer can only assemble the land if they buy several adjacent properties, but there are limits to that power.

One of the premium factors why rubber is the premiere choice when it comes to impact and vibration absorption is its high shear modulus. This allows it to handle immense amounts of stress and prevent deformation. Besides its high shear modulus, rubber also has various other characteristics that make it an ideal material for vibration damping. These include its ability to absorb and store energy.

Once the developer has a few properties together, pressure starts mounting on their end to start construction because of how much they’ve already invested. Delays can motivate the developer to change their plans for the site. They might just build the project around holdout properties instead of waiting for a deal.

Whether installing engineered hardwood, laminate, luxury vinyl plank or tiled floors, rubber is an ideal material. Unlike other types of flooring, rubber can't be crushed out. This material can endure the constant loads and still recover completely once the load is removed. A good acoustic underlay should be able to endure the effects of the environment it’s exposed to.

What Challenges Does a Land Assembly Face?

A land assembly has many of the same potential issues as any property purchase, with the added challenge of dealing with multiple vendors. Problems that can arise include:

The future of acoustic underlayments

The environmental impact and health considerations of acoustic underlayments will no doubt play a major role in the future.

• errors in the legal descriptions, • gaps between the lots being assembled,

• encroachments from lots not being purchased, • old easements or rights of way, • old undischarged mortgages or leases, • orphaned laneways.

“If a product has been GREENGUARD Certified, it has been tested and scientifically proven to have low chemical emissions,” says Scott Steady, product manager for indoor air quality at UL. “In other words, it’s guaranteed to give off only low levels of volatile organic compounds, or VOCs.”

Condos completed in 1998 have a median unit size of 979 square feet, while those finished in 2022 are notably smaller, with a median unit size of 596 square feet.

Land assemblies are complex deals, involving the merger of several different titles. Each of the assembled properties may have title or off-title risks that the developer needs to account for. Proper planning, including title insurance, can be key to a project’s success. Every land assembly project is unique, and smart developers are using every tool at their disposal. 1

The truth is, on average, rubber acoustic underlays cost $1.29 per square foot, which amounts to about $774 in a 600 square foot condo. Is it too unreasonable for condo boards to enforce stricter acoustic underlayment rules, which help uphold the integrity and peaceful enjoyment of living for everyone in the building for $774? Especially when these products remain under the floor for an average of 10 to 15 years or $51 per year. What is for certain is the current status quo is not working. 1

Brendan Fagan is FCT’s Chief Underwriter with 14 years of industry expertise. Brendan assesses and advises on developing trends in risk and underwriting, also providing input into the development and implementation of initiatives across the company. Brendan holds a Master of Laws degree from the University of Montreal and has been called to the bars of Ontario and Quebec.

Steven Vasconcelos is the principal of The Floor Studio Inc. and an accredited NWFA Wood Floor Inspector who specializes in wood flooring and acoustical membranes.

www.REMInetwork.com | September 2022 41
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36 CONDOBUSINESS | Part of the REMI Network
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■ Reserve Fund Studies ■ Performance Audits ■ Condition Assessments ■ Specifications & Tendering ■ Forensic Engineering ■ Roof Consulting ■ Construction Review ■ Contract Administration 588 Edward Avenue, Unit 49, Richmond Hill, ON L4C 9Y6 P 905-737-0111 F 905-737-4046 (Guelph) P 519-827-1757 PRACTICAL APPROACHES ■ SENSIBLE RESULTS www.brownbeattie.com Knowledge looks great on you High level decision makers and influencers depend on us to be their trusted information source within the Canadian Real Estate Management Industry Leverage our award-winning insight CO-GENERATION AT CARLETON U OUTSOURCING BANK OF CANADA’S HQ ON THE LEVEL to building long-lasting employee, client rel tionships + What to consider when refreshing COMMON AREA RENOS PRODUCTIVE ENERGY Sustainable Conductors for Cost Savings plus Apartment CO-LIVING CREDIT TRENDS HOUSING SOLUTIONS FOR A BETTER TOMORROW FORWARD THINKINGFORWARD REAL ESTATE MANAGEMENT INDUSTRY remisubscribe.com gon OPERATIONS & MAINTENANCE

BULK CONTRACTS POST ROGERS OUTAGE

On the morning of July 8, 2022, beginning around 5 a.m . eastern time, 12 million Rogers’ subscribers and more than 25% of our nation’s population lost all wireless and wireline connectivity. Some businesses couldn’t take payments, families couldn’t reach their loved ones and many government functions — including the armslength CRTC who oversees our national telecommunication policies — couldn’t be reached.

42 CONDOBUSINESS | Part of the REMI Network
Are single service provider deals making your building vulnerable?

Additionally, if you were part of a growing cohort of condominium corporations who inherited a single service provider contract for your internet communications infrastructure from your developer (otherwise known as a “bulk” contract) — and that contract happened to be with Rogers — your entire community was disconnected. So ubiquitous and vital has our internet connectivity become, being without it brings many of our lives to a standstill. Especially post-pandemic with many working from home, not being able to connect meant loss of income and potential disaster if responsible for critical issues.

While having no internet, TV, or news could be considered a blissful respite from the constant stream of information we consume, for condo corporations that are increasingly using internet connected sensors to monitor water leaks, the internet to connect fire panels and VOIP emergency phones in elevators, this bliss could very quickly become life-endangering and a significant crisis in the making.

Policies and choice

Until relatively recently it was standard development practice to have the major telcos in each region build into every new condo at the telco’s expense. This ensured that: a) each resident had their choice of provider; and b) the building had redundant networks as part of its infrastructure, which provided a level of resiliency the community could count on as outages occur.

Additionally, if a resident wanted a telco that hadn't built in, the corporation had an obligation to work with that resident’s telco of choice and get an appropriate access agreement in place, so the telco could service that resident and community—the end user choice being primary.

Over the past 10 years, however, developers have shifted away from this practice. The reasons for this even being allowed in telecommunications policy and condo law are complicated but the way it works is simple. In exchange for a significant upfront fee from the telco, developers turn to a single provider for all internet communications services, not only for the common areas, but for individual unit owners (and their tenants) as well. The cost for this

service is then passed on through common element fees.

Normally this type of bulk deal for service would require a bylaw and vote by a condo board as it’s usually considered a “substantial change”. By embedding this in the declaration and the common element fees from inception, this democratic provision is avoided. The question remains, however, is this a good thing?

The benefit to the developer is clear. They get a significant extra boost of cash they wouldn’t otherwise receive from the telco. They also reduce their administrative and building costs slightly by not having to build infrastructure to accommodate numerous telcos.

For the telco who has been selected, there is also a huge benefit. While they will lose money for the first few years, they have a guarantee of cash flow and profit at some point in the contract and, effectively, a monopoly. Most consumers are resistant to moving providers so even when the bulk contract is over (if it’s not renewed), then chances are that the incumbent will retain the vast majority of subscribers in perpetuity.

From a consumer standpoint, there is also a benefit in that these bulk internet fees are lower than what would typically be available in the marketplace, potentially saving them money if this was a service they wanted anyway.

So far so good. What’s the problem then?

An overview of issues

First, as was made evidently clear from the Rogers outage, it means an entire condo community — sometimes the size of a small town — can be without connectivity and, if this happens, their safety systems will be affected. This brings into sharp focus numerous liability issues should something go wrong. Outages occur to every telco and if these systems were on another telco’s network that had one, you’d end up with the same result. However, not having other networks available removes the corporation’s choice to divvy up these services amongst various telcos to minimize an outage’s detrimental effects.

Second, buildings and individual condo units are increasingly being valued based on

their communications resiliency and options. Having a single network feed into a building lacks this in spades and potentially lowers its value.

Third, “end user choice” is denied. Most people like to choose the businesses they work with. By inheriting this deal, the condo board is now responsible for locking all their residents into a deal they neither agreed to nor might want. A house owner would never accept a mayor of a town telling them they have to buy from “x”, so why should a condo owner have less autonomy because of the built form of the home they have?

Fourth, as time and innovation marches on, a corporation could be stuck with less than ideal service and no way out.

Finally, while another telco could build into the community if a resident or the condo board requested, there is no incentive for them to do so. What most people want is access to the internet so they can work, browse the internet and stream their favourite shows. If everyone is already paying through their common element fees, a new telco has no hope of making back its investment to bring its network to the community as there’s no market to compete for.

Additionally, most bulk agreements have clauses that allow the incumbent to match or beat any new telco’s offer once the initial agreement has expired. Since the incumbent has already sunk its costs and become profitable, they can do this easily and retain the contract — ensuring a lack of resiliency continues.

Condo boards have a duty to their residents and are always having to balance the good of the collective vs the rights of the individual. Boards are also bound to ensure the ecosystem of their buildings is as resilient as possible. Determining what kinds of services we provide for our residents requires carefully reviewing the opportunity, the risk, the economics and the dexterity with which we can change those decisions as innovation progresses. 1

Todd Hofley is the President of Toronto Standard Condominium Corporation 2164. He is also the VP of Policy and Communications at Beanfield Metroconnect.

www.REMInetwork.com | September 2022 43 OPERATIONS & MAINTENANCE

FREEING-UP TIME FOR CAPITAL PROJECTS

Creating a more symbiotic approach to property management through technology

Achieving a more symbiotic approach to property management requires understanding the crucial tie between leading-edge occupant services and proactive maintenance. Leveraging technology is one strategy corporations can use to reduce resident demand and focus on capital projects

Start with improved occupant services

If you can develop an effective process to handle occupant issues, you can streamline requests. The goal is to ensure all occupant requests and complaints are managed as quickly as possible to freeup the property manager’s time. Using technology helps create a management team who gets a boost from self-serve options. With the right tech, the board and/or managers can ensure requests are answered properly and served into your maintenance or complaint process funnel in a timely manner.

Chatbots and virtual robot assistants answer questions and complaints immediately to create a more resident focused management style. When you can provide a quick answer based on common maintenance questions, you reduce the work required by your team. Chatbots prioritize complaints based on urgency, while fielding questions with auto responses. As a result, teams resolve minor issues almost immediately while also settling more urgent requests.

Improve communication with resident portals

Resident portals and condo management software allow boards and managers to improve communication. Portals can be used to field questions as new information is shared, announce condo meetings, submit service requests, accept common element fees, and book amenities and elevators, thus freeing up time to focus on common elements.

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Using tech to manage lost keys

Depending on how many units a corporation manages, common issues can bog down maintenance and security teams. A good example is lost keys. Every lost key request takes time to resolve. The resident must be authenticated to ensure they actually live there. The pass key must be retrieved or a card re-coded by someone with authority. If you are still using a master key, then someone has to accompany the resident to their door. However, smart lock systems are operated by a key fob or via a smartphone. This allows property managers to grant access from anywhere via their phones, as well as to any area of the property. By operating a centralized management system, you can authorize access for individual residents by sending them an access code via their smartphone, thereby dedicating time to higher value tasks.

Smart sensors to improve maintenance Smart sensors can be used in units as well as

44 CONDOBUSINESS |
Although the prime responsibility of the condo corporation is to manage common elements, many condo boards and property managers find themselves caught up in the minutia of owner/occupant demands.

common areas. For example, sensors maintain comfortable temperatures in common areas, trigger on/off responses to manage garage exhaust fans, and help manage water usage. This reduces utility costs, providing savings to build reserves for capital projects. However, where smart sensors really prove their worth is helping to prevent costly water damage. They can detect leaks and pipe breaks and turn off the water supply. Early leak detection minimizes damage and cost for repairs that can affect multiple units. It also avoids disruption of use in common areas, which can lead to resident complaints.

Proactive maintenance reduces complaints

A proactive approach to maintenance reduces risk for special assessments and ensures funds are available to manage capital projects. Common areas that are in good condition also keep residents happy. But beyond vacuumed carpets and mould-free pool areas are effective budget allocation and ongoing improvements made in smaller, more manageable increments.

Preventative maintenance ensures small problems don’t become costly, unexpected capital projects. If a garage is more than 20-years old, develop a five-year schedule for condition assessments. This helps to understand what repairs are required via testing which, in turn, allows for incremental repairs with manageable costs. There will also be fewer complaints from residents who find the garage unsafe for their vehicles. Managers today must also address climate change risks, including flooding and wind damage. Catastrophe modeling creates a strategy to minimize risk for damage caused by severe weather events. As a result, capital project funding is not impacted by unexpected costs to repair weather-related damage.

Smarter overall condo management

The financial and physical health of a condo should be monitored using key performance indicators (KPIs) to measure and track maintenance costs. Data-driven decisions use factual input to improve condo efficiencies and the happiness of the community.

Taking steps to reduce condo fees through savings such as energy audits, government

grants for retrofits, and effective reserve fund planning keeps more money in the reserve fund for capital projects. Being underfunded poses long-term financial problems that lead to special assessments. As a bonus, owner complaints will decline in absence of common element fee increases.

Technology creates a solid level of condo resident service to reduce time spent on individual unit management. Property managers and condo boards can focus on prime responsibilities to better manage common elements, plan for capital projects, and take a more proactive approach to property maintenance, reducing costs and creating a sustainable, healthy reserve fund. 1

Vadim Koyen is the President of CPO Management Inc., a full-service property management company specializing in residential and commercial condominiums in Toronto and the GTA. With over 10 years in the industry, CPO offers a wide spectrum of services from strategic and financial planning to accounting, building maintenance and capital improvement.

MANAGEMENT

Condos Kick-Start Cloverdale Mall Reboot

Cloverdale Mall was built in 1956 as an open plaza in Etobicoke. In the 1980s, it was converted into an enclosed mall, undertaking major renovations in 2006. Soon, it will take on a different life as a 32-acre shopping centre, with a vibrant, sustainable, and innovative mixed-use urban community.

The latest chapter of QuadReal’s project is that Mattamy Homes will develop condos on a standalone 2.3-acre site at 2 and 10 The East Mall Crescent. A 32-storey tower and an 8-storey mid-rise will total 500-plus condos and 2,400 square feet of retail.

Mattamy will acquire a partial interest in the site and will be the execution partner for development, construction, and sales and marketing for the condo project. QuadReal will maintain long-term ownership of the retail and purpose-built rental components. David Stewart, president of Mattamy Homes GTA Urban Division, said QuadReal is a key partner in the company’s plan to deliver 13,000 condo sales within the next five years. 1

H Mart's Flagship Canadian Store to Anchor M2M Condos

Aoyuan International’s upcoming M2M mixed-use community of nearly nine acres in North York will welcome Asian supermarket H Mart as its anchor tenant.

The Toronto outpost of the world’s largest Korean-American supermarket chain will span 36,000 square feet and offer authentic Asian and international groceries. H Mart, which stands for Han Ah Reum, a Korean phrase meaning “one arm full of groceries,” will be stocked with products that are difficult to find at more conventional stores. This will also be H Mart’s flagship Canadian location.

Plans are unfolding for M2M’s five residential towers, a community centre, public park and a daycare. Fan Yang, general manager of Aoyuan Canada, says he’s thrilled to be welcoming H Mart to the site. “We are seeing increasing demand for cultural diversity in retail, and M2M is a very diverse community,” he says. “This flagship location will offer fresh produce, multicultural goods, and authentic ready-to-eat meals. 1

46 CONDOBUSINESS | Part of the REMI Network NEW AND NOTABLE
T H I N K I N G O F R E N O V A T I N G ? Y O U R S E A R C H E N D S H E R E . C o m m o n A r e a s A m e n i t y S p a c e s B u i l d i n g E n v e l o p e We partner with our clients to understand their goals and interpret their vision, building spaces that are distinctly suited for each environment. Through one contract and one point of responsibility, we outpace traditional expectations. V i s i t u s a t w w w . p a c b u i l d i n g g r o u p . c o m o r c a l l 4 1 6 9 9 9 9 6 2 6 t o g e t s t a r t e d t o d a y !

Expertise. Insight. Trust.

Having the technical expertise and insight to conduct retrofit projects in established buildings without affecting the day-to-day business of occupants is our specialty. It’s what sets us apart.

The truth is, existing buildings are far more complex and challenging than new construction, and require a unique game plan every time. It’s why the process for delivering mechanical and electrical engineering solutions requires more than a cookie cutter approach – it demands that you have a deep insight into the building and how new systems can be integrated into existing systems seamlessly.

All of our projects are reviewed by senior engineers, each with over 25 years of experience in their respective fields, ensuring that our clients always receive engineering services of the highest quality.

1 Concorde Gate, Suite 808, Box 65 Toronto, ON M3C 3N6 Telephone: 416-443-9499 Email: marketing@mcgregor-allsop.com mcgregor-allsop.com

Bill Powell, M.Sc., P.Eng., President & CEO Neil Spence, Director of Electrical Engineering, Building Services Rob Niessl, P.Eng., Director of Engineering, Northern Region Mark Dahmer, P.Eng., PMP Mechanical Engineering Principal Peter LaForme, Executive Vice President Andre Lebedev, P.Eng., Director of Electrical Engineering Robert Borovina, P.Eng., Director of Mechanical Engineering
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