a million pieces of glass36 game changers - an interview with the honourable margarett best, m.p.p.,...

www.ccitoronto.org VOL. 17, NO.1 • FALL 2012

PM #40047055

PUBLICATION OF THE CANADIAN CONDOMINIUM INSTITUTE - TORONTO & AREA CHAPTERPUBLICATION DE L’ INSTITUT CANADIEN DES CONDOMINIUMS - CHAPITRE DE TORONTO ET RÉGION

AMillionPieces of

Glass

Features8 Accuracy in Audited Financial Statements

by John M. Warren

12 Six Common Approaches of Successful and Effective Boardsby Patricia Elia

14 Security in a Start-up Condo - Our Approach at Heintzman Placeby Betty Dondertman

17 Balcony Glass Breakage… DON’T PANIC!by Gerald R. Genge

26 What is a Reserve Fund? Back to the Basicsby Cathy Lee

33 Tarion Overhaul of Major Structural Defect Proceduresby Shawn Pulver

36 GAME CHANGERS - An Interview with The Honourable MargarettBest, M.P.P., Minister of Consumer Servicesby Armand Conant & James Russell

47 Parrots, Dogs and Parking: Best Practice Tips from the Courts inCompliance Mattersby John De Vellis

51 Look Out Below! Some Thoughts on Falling Balcony Glassby Brian Horlick

55 Owners’ Code of Ethicsby J. Robert Gardiner

58 Conflict Between Condominium Declaration and Religious Practicesby Joseph Salmon

60 Proposal to Ensure the Proper Maintenance and Repair of theCommon Elements of Condominium Corporationsby Mario Deo

Fall 2012 thecondovoice 3

Canadian Condominium Institute / Institut canadien

des condominiumsToronto & Area Chapter

2175 Sheppard Ave. E., Suite 310, Toronto, ON M2J 1W8

Tel.: (416) 491-6216 Fax: (416) 491-1670E-mail: [email protected]

Website: www.ccitoronto.org

2011/2012 Board of DirectorsPRESIDENT

Bill Thompson, BA, RCM, ACCI, FCCI(Member, Education Committee, Co-Chair, Conference Committee)

Malvern Condominium Property Management

VICE-PRESIDENTSBrian Horlick, B.Comm., B.C.L., LL.B., ACCI

(Member, Legislative Committee,Member, Government Relations Committee,

Member, Conference Committee)Horlick Levitt Di Lella LLP

Mario Deo, BA, LL.B.(Member, Communications CommitteeMember, Conference Committee)

Fine & Deo LLP

SECRETARY/TREASURERBob Girard, B.Comm, RCM, ACCI, FCCI

(Chair, Special Projects Committee/President’sClub Sessions, Member, Education Committee)

YCC #50

PAST PRESIDENTArmand Conant, B.Eng., LL.B., D.E.S.S.

(Chair, Legislative Committee, Co-Chair, Government Relations Committee)

Shibley Righton LLP

BOARD MEMBERS

Jeff Jeffcoatt, P.Eng, BDS, RCM(Member, Education Committee,

Liaison of Health and Safety Committee)Construction Control Inc.

Lisa Kay, BA, CCI (Hons)(Co-Chair, Communications Committee,Member, Conference Committee,

Member, Special Projects Committee)JCO & Associates

Vic Persaud, BA(Chair, Membership Committee,

Member, Special Projects Committee)Suncorp Valuations Ltd.

Brian Shedden, BSSO(Co-Chair, Communications CommitteeMember, Special Projects Committee)

GRG Building Consultants Inc.

Sally Thompson, P.Eng.(Member, Education CommitteeMember, Legislative Committee)

Halsall Associates Ltd.

John Warren, C.A.(Chair, Education Committee

Member, Legislative Committee)Adams & Miles LLP

OPERATIONS MANAGER - Lynn MorrovatADMINISTRATOR - Rebecca Harvey

EDUCATION COORDINATOR - Josee Lefebvre

Contents

One City Hall Condo of the Year 1st Quarter Finalist!

CCI News5 President’s Message6 From the Editor28 Condo of the Year 1st Quarter Finalist42 New Members43 In Memoriam - Ronald Stephen Danks44 Mark Your Calendars45 Member’s Corner66 CCI-T Educational Program

ise and experience in areas such as contract review and drafting,negotiation and litigation support for our condominium clients.

J. ROBERT GARDINER, B.A., LL.B., ACCI,FCCI, (Owners Code of Ethics, page 54) isthe senior partner of Gardiner MillerArnold LLP, practising condominium lawin Toronto. He has written or edited 10books and 260 articles on condo law and isa past president of the Canadian

Condominium Institute – Toronto.

GERALD R. GENGE, P.ENG. C.ENG. BDS,BSSO, C.ARB. Q.MED., (Balcony GlassBreakage… Don’t Panic!, page 17) is abuilding science specialist with over 30-years’ experience in assessing and repairingbuildings across Canada.

BRIAN HORLICK, B.COMM., B.C.L. LL.B.,ACCI (Look Out Below! Some Thoughtson Falling Balcony Glass, page 51) hasbeen successfully engaged in the practice oflaw for 25 years. He is a senior partnerwith the law firm of Horlick Levitt Di LellaLLP and is an expert in the area of condo-

minium law. He is the 1st Vice President on the CCI TorontoBoard and is a member of its Legislative Committee. Brian isalso a member of the CCI/ACMO Government RelationsCommittee and is Chair of the ACMO Associates ExecutiveCommun ications Committee.

CATHY LEE, P.ENG (What is a ReserveFund? – Back to Basics, page 26) is aSenior Principal with Halsall Associates.Over the past 14 years, she has preparedreserve fund studies for hundreds of condo-minium corporations across Ontario.

SHAWN PULVER (Tarion Overhaul of MajorStructural Defect Procedures, page 33) isthe Head of Heenan Blaikie’s condomini-um litigation practice, which forms part ofthe firm’s Condominium group. Shawnrepresents condominium corporations, landdevelopers, and others and also has signif-

icant experience advising clients on the Ontario New HomeWarranties Plan Act and disputes relating to condominium defi-ciencies. Shawn is a contributor to condoreporter.com, and is afrequent speaker on various condominium related issues.

JOSEPH SALMON (Conflict BetweenCondominium Declaration and ReligiousPractices, page 58) is is a member ofHeenan Blaikie’s litigation and condomini-um groups and has experience in compli-ance and construction deficiency matters,and representing condominium corpora-

tions in court proceedings, mediations and arbitrations.

JOHN WARREN (Accuracy in AuditedFinancial Statements, page 8) is a partnerwith Adams & Miles LLP, CharteredAccountants, whose clients include over300 condominiums. He is a Director andPast President of the CanadianCondominium Institute – Toronto and AreaChapter and has served on a number of

Committees of the Association of Condominium Managers ofOntario. He is currently Chair of the committee of the Instituteof Chartered Accountants of Ontario that periodically publish-es guidelines on accounting and auditing for OntarioCondominiums.. He writes regularly on financial matters incondominiums and is a frequent speaker at educational programsfor managers and directors and at condominium conferencesand seminars.

thecondovoice Fall 20124

“TheCondoVoice” is published 4times per year – Spring, Summer,Fall and Winter, by TaylorEnterprises Ltd. on behalf of theCanadian Condominium Institute -Toronto & Area Chapter.

EDITOR: Mario DeoMAGAZINE DIRECTORS: Lisa Kay and Brian SheddenADVERTISING: Michelle RomanukCOMPOSITION: E-Graphics

All advertising enquiries should be directed to Michelle Romanuk at(416) 491-6216 ext.111 or [email protected]

If you are interested in writing articles for TheCondoVoice magazine, please contactLynn Morrovat at (416) 491-6216 Ext 110 orat [email protected]. Article topics must be on issues of interest to Condominium Directors and must beinformative rather than commercial innature.

The authors, the Canadian CondominiumInstitute and its representatives will not beheld liable in any respect whatsoever for any statement or advice contained herein.Articles should not be relied upon as aprofessional opinion or as an authoritative or comprehensive answer in any case.Professional advice should be obtained afterdiscussing all particulars applicable in thespecific circumstances in order to obtain anopinion or report capable of absolvingcondominium directors from liability [unders. 37 (3) (b) of the Condominium Act, 1998].Authors’ views expressed in any article arenot necessarily those of the CanadianCondominium Institute. All contributors aredeemed to have consented to publication ofany information provided by them, includingbusiness or personal contact information.

Consider supporting the advertisers and service providers referred to in this magazine, recognizing that they havebeen supporters of CCI.

Advertisements are paid advertising and donot imply endorsement of or any liabilitywhatsoever on the part of CCI with respectto any product, service or statement.

Publications Mail Agreement #40047055 -Return undeliverable Canadian addressesto Circulation Dept. 2175 Sheppard Ave. E.,Suite 310, Toronto, ON M2J 1W8

ContributorsARMAND CONANT, B.ENG., LL.B.,D.E.S.S. (SORBONNE) & JAMES RUSSELL(Interview with Minister Best, page 36)Armand Conant heads the condominiumdepartment of the law firm of ShibleyRighton LLP and represents condominiumcorporations across central Ontario.Armand is Past President of CCI(Toronto), and also Chairs the LegislativeCommittee and Co-Chairs the GovernmentRelations Committee. Armand is a mem-ber of CCI National’s GovernmentRelations Committee He is the first lawyer

in Ontario to be a court appointed Administrator. Armand isalso an engineer and having received a Masters of Law degreefrom the Sorbonne (France), he is bilingual.James Russell is a Toronto based corporate communications spe-cialist and filmmaker. He is currenting producing a TV moviebased on the Giller-winning novel “The Polished Hoe” starring theStratford Festival's Yanna McIntosh and Star Trek's LeVar Burton.

MARIO DEO LL.B. (Proposal to Ensurethe Proper Maintenance and Repair of theCommon Elements of CondominiumCorporations, page 60) is a partner withthe law firm of Fine & Deo, which focus-es its practice on condominium law andreal estate matters. Called to the bar in

1988, Marioís practice has centred on condominiums and realrestate; he advises condominium corporations, developers, unitowners and purchasers and vendors of units. Mario, a popularpresenter and lecturer, currently sits on the CCI Toronto Boardof Directors.

JOHN DE VELLIS (Parrots, Dogs andParking: Best Practice Tips from theCourts in Compliance Matters, page 47) isa lawyer at Shibley Righton LLP and amember of the firm’s condominium practicegroup. John has acted in numerous disputesinvolving condominium corporations and

unit owners, including condominium rule enforcement applica-tions, lien enforcement proceedings, professional negligenceclaims, and contractual disputes including employment matters.John has appeared before various levels of court in Ontario aswell as the License Appeal Tribunal and the Ontario Energy Board.John also provides expert advice to condominium corporationsregarding governance issues, and contract review and drafting.

BETTY DONDERTMAN (Security in a Start-up Condo – Our Approach at HeintzmanPlace, page 14) was elected to the firstBoard of TSCC 2136 at the transition meet-ing in June 2011. Her other volunteer activ-ities include being treasurer for the GallaLake Road Association and a Board mem-

ber for the Revue Cinema, a not-for-profit community cinema inToronto. Betty’s professional background is in education admin-istration. At this stage of her life, Betty is enjoying condo livingand the Junction neighbourhood and is happy to volunteer onbehalf of issues she cares about.

PATRICIA E. ELIA B. COMM., LL.B.(Where Were the Directors?, page 12)Patricia Elia is a lawyer, mediator and pro-fessional coach. She practices law with EliaAssociates Professional Corporation. Herlaw practice in Toronto, Oakville andBarrie encompasses primarily the areas of

corporate/commercial and condominium law. Patricia has beena regular speaker and participant for ACMO and the Toronto, theGolden Horseshoe and Huronia Chapters of CCI. She contributesarticles to well-known industry publications.As a corporate commercial lawyer, Patricia has complimentedthe condominium focus at Elia Associates by providing expert-


President’s Message

A Simple “Thank You”

I cannot believe how fast time flies! It seems like just last month that I was accepting the role asPresident of the Toronto Chapter, yet somehow, this is my last message in that role.

Over the last two years, I have tried to keep our members informed via this forum about all of theactivities and objectives that we have taken on at CCI-Toronto. Believe me when I say that these havebeen very busy years at CCI. Most of the work done on your behalf has been done quietly and with-out a lot of fanfare or hype. We have taken the “head down”, “get it done” approach, and not the “lookat me” approach because we believe that the value in your membership comes from making the con-

dominium world a better place to live, a better place to work, and a better industry to support. We have not chasedmedia attention, or made unsubstantiated claims of our importance. We have simply done the tasks that needed to bedone for our members.

Some of those tasks, as a review, have been;

1/ Created and provided the Legislative Amendments recommendations to the Provincial government together witha targeted brief or executive summary, in cooperation with the Association of Condominium Managers of Ontario.Our legislative Committee has followed up on that submission and helped to open the Act for review. A whole stake-holder review will be taking place as you read this article.

2/ Carried out cooperation and outreach efforts to other Non Profit Organizations. We met with the Association ofCondominium Managers of Ontario (ACMO), the Toronto Real Estate Board (TREB), the Condominium OwnersAssociation (COA), and the Community Associations Institute (CAI). We were successful in creating agreements ofunderstanding with both ACMO and the Toronto Real Estate Board (TREB). We also furthered our cooperation withCAI which is the CCI equivalent from the USA, and are sharing resources, conferences and materials under a nation-al memorandum of understanding. Our outreach efforts have created a more unified and stronger voice. We haveshown that cooperation is the key to a successful Condominium community.

3/ We have rewritten our Level 300 Course material, and are in the process of rewriting all other courses to bring apredictable level of education to all of the attendees of education courses. We have been successful in teaching hun-dreds of Directors and Owners about the rights, roles and responsibilities of condominium living.

4/ We have run the largest Condominium Conference and Trade Show in Canada, in conjunction with ACMO, withmore than 1000 attendees. The participants have been able to hear from the leading experts in the Condominium worldabout many current issues. Boards and Owners have been able to have direct access to the experts to find answersthat they need to run effective condominiums. The trades that service the condominium sector have been able to show-case the latest and greatest to those who need their products. Solutions to many problems have been found at this venue.

5/ We have taken a public stance on the fairness in taxation that is missing from the current property tax system. Wehave cooperated with other chapters in CCI and funded challenges to the double tax inequity involved with amenityunits such as superintendent suites or guest suites. Many municipalities are reconsidering their position on propertytaxes, and MPAC has allowed reduction in taxation of amenity units to near zero values.

Continued on page 67


It’s About Time!

You have decided that you want to move into a condominium, again. You have previously lived in acondominium, so you know what you want. You have carefully selected the building in which you wantto live. You have used the usual criteria of most purchasers: price, location, amenities, the quality andstyle of the building and its common elements. For now, you're hoping that this will be your lastmove. If you are like most purchasers, you will want to know that the quality of the building will bekept the same or better for many years to come. This is your main concern in the long term. You have

also experienced many years as a director at another condominium corporation. That condominium corporation wasgoverned quite well, but you are fully aware of the potential issues involving the governance of a condominium. Asan experienced director, you know that you will be fully advised of the corporation’s reserve fund health by the peri-odic notices to owners that are required by the Condominium Act, 1998. You are comfortable with that part of gov-ernance because of all of the legislative controls around the right amount to be put in the reserve fund. You are moreapprehensive about the corporation maintaining its present look and quality. You know that you could do a great jobas a director, and this will give you more security in your investment, but you have done your duty and that’s not anoption.

To your surprise, there are two identical buildings that you like. One is governed by the present standards and legis-lation regarding maintenance of the common elements. The other building interests you because the board’s perform-ance, in maintaining the look and quality of the common elements, is evaluated, in detail, by a third party every threeyears. If the board fails in the evaluation and if the board does not correct the problem, the board of directors is auto-matically removed.

As a previous board member, this is a no brainer. You choose the second building because you understand that not allboards are able to satisfactorily maintain a building at all times. You absolutely love and feel secure in a third partyevaluation of the board's performance, that actually has teeth. You buy in the second building, hands down, becauseyou feel really secure about the future maintenance and the look and quality of your building.

In addition to the reasons that the above purchaser relied upon, there are many, many other good reasons for the leg-islative changes that are required to produce and implement a third party of evaluation of the performance of theboard of directors in maintaining a condominium corporation. It is really about time that this happens. Directors andowners will all benefit from such a change to the Act.

I have written an article explaining my proposal and the process thereunder. It is prudent to note that this legislativeproposal is the author’s own, and is not, at the present time, part of the CCI (Toronto)/ACMO Legislative Brief. Seepage ___ of this issue for the article.

In my opinion that this is the greatest missing link in the present legislation. Directors are not all equal but an owner’srights are – owner’s have a right to ensure a properly maintained building, not just when the board is able, but all thetime.

Mario Deo, BA, LL.B. ■

From the Editor


Accuracy in AuditedFinancial Statements

Some owners and directors think that the audited financial statements oftheir condominium should not contain any errors, no matter how smalland that the auditor should verify every transaction and audit every invoice,not only for accuracy but also for value to the corporation.

BY JOHN M. WARREN, C.A. ADAMS & MILES LLP


Auditors could do these things, theycould audit every transaction and theycould perform a value for money audit,but they do not perform either of thesefunctions as part of the annual audit ofcondominiums because even if theydid, 1) 100% assurance that the finan-cial statements are free from error,whether or not material, is not possiblein the time frame allowed by theCondominium Act and 2) 100% verifi-cation and value for money auditswould cost too much and, 3) moreimportantly, the result of these auditprocedures would not provide signifi-cant value to owners.

In conducting an annual audit, auditors’use samples; that is they do not look atevery entry, invoice, bank statement,etc. but rather audit samples and extrap-olate the results of the sample to thefinancial statements as a whole.Consider political polling as perhaps amore understandable use of sampling;experience and statistical mathematicshave shown that if political pollsters askquestions of a sample of about 1,000people properly chosen then theiranswers will yield much the same resultas asking the population at large,though when the votes are actually cast,pollsters do get surprised once in awhile. That is why poll results alwayscontain a comment that says somethinglike “these results are deemed accurateplus or minus 3%, 19 times out of 20”.Audit sampling follows much the sameprocess, select appropriate samples,examine those documents and assumethe entire population will produce muchthe same result. Statistically, an annu-al audit following generally acceptedaudit standards provides about 95% to97% assurance that the financial state-ments are free from material error.

So, why can’t auditors just look ateverything and provide 100% assurancethat the financial statements are freefrom error of any amount?Unfortunately, even if every transactionwere audited, 100% assurance wouldstill not be provided unless the auditwere to take place a very long time afteryear end, because the accuracy of someamounts could still be in doubt at the

date that audits are normally conducted.At that date, such items as the collec-tion of certain receivables, the amountof disputed payables or the results oflegal actions may not be determinable;their determination may only becomeknown from events that will occur afterthe audit date; some may take monthsor even years to sort out and if the auditis delayed too long after the year endof the condominium, those financialstatements become irrelevant. TheCondominium Act recognizes the needfor timeliness and requires that auditedfinancial statements be presented at theAnnual General Meeting which mustbe held within six months after year endand the audit therefore has to be com-pleted in time to meet this deadline. Soeven if auditors did look at everythingit would only move the assurance thatthe financial statements were free fromerror, material or not, up to about 99%or 99.5%.

As to value for money auditing, the rea-son that auditors do not perform thisfunction in annual audits of condomini-ums is that, in addition to the cost, itwould have very limited usefulness.The best known examples of value formoney auditing are probably the reportsissued by Auditors General, either ofCanada or a province. In their reports,the Auditors General consider not onlywhether the accounting rules, record-keeping standards and governmentprocesses and procedures have beenfollowed but also whether programexpenditures meet program objectivesand whether the salaries, costs andother expenditures provide value formoney spent. In the large and complex

world of government, with its manydepartments, agencies, boards and com-missions, it is easy for usefulness andvalue considerations to be obscured andso value for money auditing is impor-tant and useful. Value for money audit-ing has limited usefulness in condo-miniums because owners can see dailyhow well or poorly their building isoperated and maintained and the annu-al audited financial statements set outall costs of any significance, enablingowners to decide on the value receivedfor money spent and to do so far moreeffectively and far more cheaply thanan auditor ever could.

If annual audits were to audit everytransaction and also to audit for valuefor money, they would cost a staggeringamount - significantly more than audit-ing samples - many multiples more. Ifregular annual audit costs are $3,000,an audit of every transaction could cost3, 4 or 5 times as much or even more.The cost of value for money auditingwould be in addition to the cost of100% verification and it is not far-fetched that total costs could be$25,000 or more each year. The ques-tion boils down to what is the best valueto the owners for the money spent;$3,000 for 95% to 97% assurance with-out value for money auditing or$25,000 or perhaps even more for 99%to 99.5% assurance together with anaudit of value for money. The answeris clear, at least to me, accept a littleless assurance, make your own evalua-tion of the value received for moneyspent and spend a lot less money for theaudit.



So, if owners accept a little less assur-ance of accuracy, how do they knowhow much error would be consideredacceptable or, in accounting talk, whatis the total of potential errors that theauditor would consider to be less thanmaterial? Materiality is normallydefined as an amount that, if omitted ormisstated, would influence or change adecision. In condominiums, I thinkthere are only two common decisionsthat might be influenced or changed bymaterial error or misstatement; 1)whether to purchase a unit (mortgagelenders seldom, if ever, look at the con-dominium’s financial statements whenassessing whether to provide financingto purchase a unit) and 2) who to votefor at owners meetings. Materiality ina condominium with a $1,000,000budget could be as much as $20,000and that, in my opinion is about theamount that might change either of thedecisions above, but materiality as anumber does not tell the whole story.Auditors are required to accumulate all

non-trivial adjustments that theyencounter during their audit and to askthe Directors to record those entries. Asa practical matter these adjustments willalways be recorded because theDirectors also want the financial state-ments to be as accurate as possible. Atrivial adjustment would be one from afew dollars to a few hundred dollarsand Boards will typically record eventrivial adjustments and so owners, witha simple question at the Annual GeneralMeeting, can determine whether alladjustments encountered, no matterhow small, have been recorded and ifnot, why not.

Now if this discussion of materialityand cost/benefit is a bit confusing, con-sider that most condominiums are notlarge, complex organizations with mul-tiple divisions and hundreds of thou-sands or millions of transactions eachyear; most condominiums issue lessthan 1,000 cheques a year. While audi-tors do not look at the detail behind

every transaction they do review thecontents of all but the tiniest accountsand an experienced condominium audi-tor will quickly determine whichamounts, large or small, require furtherinvestigation. Bank accounts andreserve investments are pretty straight-forward, owners’ receivables aresecured by lien rights, payables are paidsubsequent to year end unless disput-ed; owners’ assessments should be thesame as budget; contract accountsshould contain only 12 monthly entriesand should be close to budget. Salary,utility and repair and maintenanceaccounts are easily verifiable; insuranceis what it is and office, professional andother administrative costs are typicallysmall. So even though auditors don’tlook at everything and can’t guaranteeperfection, owners should be prettyconfident that not much, big or small,has been missed in the audited finan-cial statements. ■


Six Common Approaches ofSuccessful and EffectiveBoards BY PATRICIA ELIA, ELIA ASSOCIATES PROFESSIONAL CORPORATION

In our last issue of the CondoVoice, Patricia Elia wrote about some of the behaviours, mindsetsand values that hinder boards from being effective. We are pleased to include the flip side of thatarticle – that being… the approaches used by successful and effective boards.

As a lawyer, coach and boardmember, I know many boardsthat are brilliantly successful.

This article is dedicated to the manygreat boards we have worked with whojust get it right, I have articulated thetop six behaviours of effective boardsthat I have seen in action and that getthe results.

1. Getting and Staying Focused on aShared Vision

Have you ever noticed how effectivepeople with a common goal are? Oneof the reasons why so many rides andwalks are effective fundraisers andawareness raisers is because everyoneis focused on the same goal. The mostimpressive boards I have worked withknow what their vision is and worktogether to achieve it. A board thatfocuses on the “best interests of the cor-poration” is one that puts the corpora-tion first in the context of decision mak-

ing. Recently, I heard about one condo-minium corporation that has won land-mark decisions but is now not enforcingthem. Why? Because the peopleagainst whom the Corporation won thedecision are now on the Board and theyare collectively working against thecondominium corporation’s best inter-ests to enforce the judgments won.Aside from creating personal liabilityfor directors by not enforcing judg-ments (i.e. the law), condominiumboards must stay focused from boardto board or maintaining the condomini-um corporation’s best interests.

2. Practicing Safe Communication

Facilitating meaningful communicationamongst a diverse group with a goal ofachieving consensus – is a mouthfuland challenge – but it can be done.Decorum in the boardroom creates aproductive and safe space in which toexpress opinions and explore issues and

solutions for the condominium that arein the condominium’s best interests.Respecting fellow board members,their time and their opinions allows fora more intelligent and critical dialogueabout the Corporation. Directors needto have openness at the board table.This means all directors’ communica-tions must be held in confidence. Greatboards adhere to a Code of Ethics likethat of Canadian CondominiumInstitute and agree that confidentialityis the key. “What happens in Vegas…stays in Vegas”.

3. Relying on Professional Opinions

An intelligent board, often with the helpof strong management, will know whenan opinion is required by an appropri-ately qualified professional. The Actclearly defines who the professionalsare whose opinions may be relied on byBoards. The interpretation of the inter-connected relationships of laws and the


condominium corporation is a highlydeveloped set of skills. Professionalssupport the critical thinking process thatBoards must go through in makingdecisions for the communities.

Generally, board members do not haveall of the expertise that auditors, engi-neers, lawyers etcetera have in the con-text of Ontario and federal laws. Thusinvesting in professional opinions pro-vides the Board with more informationupon which to make an informed deci-sion.

4. Committing to Transparency

Boards that are focused on the best inter-est of the Corporation will operate theCorporation transparently, that is thatthere will be clear information availableto unit owners about those topics thatunit owners need to know about.Litigation records, employee records, asarticulated under Section 55, are “out-of-bounds”. However, where it is rea-sonable to do so, Corporations shouldprovide records. Transparency isenhanced through well-structured infor-mation sessions, newsletters, websitesand meaningful AGMS. Transparencyenhances trust of the Board.

5. Being Informed

Every board member of a condomini-um corporation that engages profes-

sional management should receive atleast an agenda and a detailed boardpackage prior to each board meeting.Directors usually meet once a month.This means they need to be inundatedwith RELEVANT information so thatthey can make efficient and informeddecisions.

An ideal condominium corporationpackage, in my opinion, includes, themost recent monthly financial state-ments, the budget statement outliningpresent and historical expenditures, anup-to-date arrears list, percentages indi-cating where the corporation is on eachline item in the budget and a manage-ment report of the issues requiringboard decisions. Of course there arevariations but the point is that directorsneed to educate themselves so as to crit-ically think through their decisions onbehalf of the Corporation.

6. Protecting the Corporation

This is otherwise known asCOURAGE. Boards need to takeactive steps to protect their communi-ties. Effective boards know the rulesand ensure that everyone plays by them.This does not mean beating anyonewith a stick. It means courteously let-ting residents know what the rules are. However, if after doing so this does nothappen then they should engage the

Corporation’s solicitors to effect com-pliance. Alternatively, it may also meanhaving the courage to change rulesfrom time to time that may not reflectthe changing character of the communi-ty. Corporations have a duty to enforceand thus they should be budgeting forenforcement.

I find it disturbing when people repeat-edly do not comply once being advised.This is unfair to the community andeach individual who makes up the com-munity. As a taxpayer, is it alright withyou if other tax payers decide not topay? Failing to pay means you are ask-ing your fellow taxpayers to pay yourshare – that is not fair. Similarly, notabiding by the rules means that unitowner is not being fair after agreeingto comply by the rules at the time ofpurchase.

The role of a director is hard work. Icommend all of those directors ofboards, who roll up their sleeves andimmerse themselves in caring abouttheir communities and investments withintegrity. It is not always a glamorousjob, the pay is rather low, but therewards of great community, service,great fiscal health, marketability and agreat living environment can make iteasier to sleep at night and make itseem all worthwhile. ■


Security in a Start-up Condo Our Approach at Heintzman Place

BY BETTY DONDERTMANBOARD MEMBER, TSCC 2136

When my husband and I pur-chased a condo in January2010, I did not expect to find

myself a year and a half later at a meet-ing of the Community Police LiaisonCommittee (CPLC) of our localToronto Police Service! So, how did Iget there?

I was elected to the first Board of ourbrand new condo in June 2011. One ofthe first things we did as a new Boardwas to survey our residents about theirpriorities. Heintzman Place was devel-oped by Options for Homes, whosenon-profit model seems to producemore owner-occupied units than docomparable condo development mod-els. We recognized that community wasimportant to our residents, most ofwhom had purchased a home to live inrather than as an investment. In fact,our mission statement reads “TheBoard of Directors of Heintzman Placeis dedicated to creating and maintaininga healthy, secure and vibrant condo-minium community”.


But what was the role of the Board increating a safe and secure communi-ty—and where should we start?

When the Board surveyed residents inthe summer of 2011, we found thatsecurity was the highest priority for theBoard to focus on in our first year (94%of respondents indicated that securitywas either somewhat or a high priori-ty)1. People were concerned about firesafety, parking garage safety, blindspots around corners, the lack of secu-rity guards and sufficiency of securitycameras, locker room safety, and airquality.

The Board formed a Security Working

Group to “advise the Board regardingsafety and security in and aroundHeintzman Place”. I was the Boardliaison to that group. Rather than focus-ing on reacting when things happen, weasked ourselves: What is the bestapproach to enhance safety and securi-ty in our condo?

Our management company takes careof the day-to-day operations such assecurity personnel, cameras, and locks.The Board took a long view rather thanan operational one, and we decided anappropriate role for us with respect tosecurity was to liaise with local com-munity-police groups, with our police,and with other security professionals;to research community safety strategiessuch as “vertical watch”; and to findout what other condo and tenant asso-ciations do about security.

When our Security Working Group wasforming in the fall of 2011, thanks to

‘The idea behind CPTEDis that the design and useof the built environmentcan reduce the incidence

and fear of crime andimprove quality of life.’

outreach by John Dixon of 11Division’s CPLC and the Division’sCrime Prevention Officer, RussGolding, we had the opportunity to tour11 Division’s brand new Station. Thiswas a great way to be introduced to thelocal police service. We also learnedabout 11 Division’s CPLC, which ismade up of community volunteers and11 Division police officers. They worktogether to identify, prioritize, andproblem-solve around local policingissues. Each of the seventeen police

divisions in the City of Toronto has aCPLC to “provide advice and assis-tance to the local unit commander andto work in partnership with local policetowards safe and secure communities.”2

A few of us from Heintzman Placeattended an 11 Division CPLC (11CPLC) meeting in early 2012. Therewere several presentations by commu-nity members as well as presentationsby the Division’s commanding officers,from whom we learned about 11


Division’s Service Priorities for 2012.Attending these meetings is a good wayto learn about what’s going on in thecommunity.

Our condo subsequently hosted aCPLC meeting in April. We were inter-ested in the police take on graffiti, localcrime rates, neighbourhood issues, ver-tical watch, a local half-way house, andhelpful safety tips for residents. Themany police officers who attended tookquestions and presented information.One of our residents now sits on 11CPLC.

Through 11 CPLC, I learned aboutCPTED (Crime Prevention throughEnvironmental Design), which fits per-fectly with our focus on maintaining ahealthy, secure and vibrant condomini-um community. Fortunately for us,encouraging a strong community is aproven crime prevention strategy. Theidea behind CPTED is that the designand use of the built environment canreduce the incidence and fear of crimeand improve quality of life. The under-lying CPTED concepts are natural sur-veillance, natural access control, terri-torial reinforcement, and maintenance.

These concepts encourage people totake care of and use the built environ-ment (in a manner I find reminiscent ofJane Jacobs!). At a basic level, weknow that the presence of other peoplehelps to keep us safe. Eyes on the streethelp keep us safe. Space that encour-ages people to gather and watch out foreach other, that directs movementthrough a building and its grounds, andthat signals where private space beginsand ends helps to keep us safe.

CPTED involves architects, police,urban planners and security profession-als, all working together. You can visitwww.cptedontario.ca/ for more infor-mation.

What is the appropriate role for a condoBoard or committee with respect tosecurity? What can other condos takeaway from our experience? Less thana year after we formed our SecurityWorking Group, we are very much a

work-in-progress. There are still manypossible initiatives we can take, but wehave few metrics. Safety measures aredifficult to evaluate, but this itself is anarea we can explore. What are our nextsteps?

Our Security Working Group is busyplanning activities for neighbours toget to know each other (such as‘Neighbours’ Night Out’, developed bythe Crime Prevention Association ofToronto). We may look further at theCPTED principles and assess how oursite can be improved. We continue tohave a rep on the local CPLC. TheDirector of the nearby CommunityCorrectional Centre has offered toattend a residents’ meeting and answerour questions and concerns. We hopeto send a representative to our localneighbourhood residents’ association.

In summary, strategies your Boardcould use to enhance security in yourcondo might include:• Forming a working group to help

determine and realize security pri-orities (and separate perceived vs.real issues).

• Liaising with your local CPLC, aswell as your local residents’ associ-ation and your city councillor.

• Looking at your own building withan eye to strengthening the elementsthat deter crime, using CPTED prin-ciples.

We are very interested in learning whatother condos and tenant associationsare doing with respect to security.We’d love to hear from you [email protected] ■

1 Survey Question 1. To what extent should the Boardfocus on the following issues in our first year? Pleaserate how high a priority this is for you. Security:Address systemic safety and security issues. Not at alla priority 5%; somewhat of a priority 26%; high prior-ity 68%; not sure 1%.2 http://www.torontopolice.on.ca/community/ccc.php


Balcony Glass Breakage…

DON’T PANIC!BY GERALD R. GENGE, P.ENG. C.ENG. BDS, BSSO, C.ARB. Q.MED.GRG BUILDING CONSULTANTS INC.

Glass Breaks

Yes, glass breaks. That’s not just meglibly stating the obvious. Glass is abrittle material that is quite differentfrom the metal panel and picket mate-rials that once were the norm for bal-cony guards. So what do you do to pro-tect yourself from harm if your glassbreaks? First, you make sure the mostdangerous aspect of glass breakage isdealt with. You treat it so that if itbreaks, it fails in a “safe” manner.

In Canada, we have used tempered glassfor balcony guards and we have a stan-dard for tempered glass that has beenaround for the past 20 years -CAN/CGSB 12.1 M90. It doesn’t saythat tempered glass won’t break. It saysthat if the glass breaks it will break intolittle pieces. That’s fine if it’s used as ina glass door or a sidelight panel becauseit just falls in place; but, if it’s a balconyguard panel it could fall from quite a dis-tance. That is the bottom line. It’s notthat the glass in several balcony panelsin Toronto (and some other NorthAmerican cities) has been breaking – it’sthat when it breaks there is a risk ofinjury or damage due to falling.

But Why Now?

Designers for balcony guards in mod-ern buildings are more-and-moreFigure 1: Shattered tempered glass panel over slab edge

News Flash!

There’s been a lot of press about the ‘summer of falling glass’. There have been alot of allegations too about “bad glass”, “bad design”, “bad construction”, “badstandards”. What’s the real story? If anyone says they know, they’re pulling yourleg. Nobody has the complete answer. But there are a few things that you shouldknow about glass panels in balconies and maybe these things will help you makesome decisions about whether or not you should be worried.


turning to glass panels. Glass is archi-tecturally appealing and relatively inex-pensive. It provides an open feeling tothe balcony area compared to pastdesigns that employed solid panels orpicket panels. Glass does not corrodeor require painting. From a marketingperspective and for aesthetics, it is anideal material for the purpose.

Size

Over the past 20 or so years the amountand prominence of glazing hasincreased in several ways:• Balcony length is increasing such

that rather than units having individ-ual balconies, the balcony is becom-ing a continuous perimeter elementon some faces.

• Individual glass panels are longer,higher, and thicker. Guard framinghas moved from smaller panelsmounted on the top of the slab tolarger panels mounted on the face ofthe balcony slab. To sustain speci-fied loads from wind and softimpact, this increase in the area of

each glass panel requires an increasein thickness. The thicker the glass,the more likely it is to include animpurity that can cause breakage(more on impurities below).

• Framing around glass panels isbeing reduced or eliminated in someinstances. This requires even greaterglass thickness to compensate forthe reduced structural contributionfrom framing.

Constructability Issues

With each step in the evolution of glassbalcony panel design, there has been acompensating increase in the glass areaand, thus, thickness. From a purelystructural perspective, the increase inglass thickness and area is not a seri-ous issue. All aspects of the glass per-formance in regard to strength anddeflection can be accommodated.However, the larger and thicker glasspanels are heavier. Previously, an older,smaller panel of 6 mm thick (1/4-in.)glass weighed about 30 lb.; whereas,the newer, larger 12 mm (1/2-in.) panel

of glass can weigh over 100 lb. Thedifficulty in handling of such largepieces of glass on the building, situatingthose pieces in frames, and assuringappropriate clearances are maintainedbetween glass and metal framing com-ponents increases as the mass of glassincreases.

Glass Manufacturing Basics

Glass used in buildings is manufacturedby heating silica sand and variousmetallic oxides and fining agents likesodium sulphate (which is intended tocause small bubbles to agglomerate intolarger bubbles which have the ability tovent to the surface). The mixture isheated to about 1,500 deg. C, drawn offin viscous form, and “floated” overmolten tin to produce a sheet of uni-form thickness. As the glass cools anddevitrifies it crystalizes and can be cutinto plate glass. The slower the glass iscooled, the less stress is retained in theglass. Annealed glass is cooled slowlyto relieve stresses in the glass that can



form after initial manufacture so it isn’tas brittle.

Tempered Glass

When annealed glass breaks, it formslong sharp shards. Where that isn’t tol-erable, tempering or surface hardeningis done by reheating the cut plates andpassing them through a zone in a fur-nace where cold air is blown over thesurface. The rapid cooling contractsthe surface and compresses the glassunderneath. This tempering not onlytoughens the glass against breakage, itputs stress into the glass that causes theentire piece of glass to break into smallcrystals with blunt edges should break-age occur. Balcony guard glass has typ-ically been tempered glass. Temperedglass cannot be cut so all panels aresized, edges eased and any holes cutbefore it is tempered.

Heat Soaked Glass

Heat soaking of tempered glass is rec-ommended because heat soaking forces

the majority of the glass panels thathave inclusions to break the panelbefore it is put into use. There are no“heat soaking” standards in our build-ing code but the European standards arereadily applicable.

Heat Strengthened Glass

Heat strengthened glass is float glassthat is reheated but not quenched aswhen tempered and, while it is strongerthan annealed glass, it doesn`t have thesame degree of tempering as fully tem-pered glass and does break into shards.

Laminated Glass

Supplementary safety can be incorpo-rated by laminating two or more piecesof glass together with an interlayer film,which bonds the sheets together shouldthey break. Automobile windshieldsfor example are laminated glass.Different types of glass can be laminat-ed and lamination can be multi-layerand essentially bullet-proof. For themost part though, one interlayer film is

used between two sheets of glass.

Design Issues

Glass SelectionMany glass guard panels installedrecently are retained only at the top andbottom and then only within aluminumchannels rather than by fastenersthrough holes in the glass. Thus, theglass panel is not fully captured in theframe by retaining on all sides. Heatstrengthened glass is preferred overtempered glass when laminated becausethe breaking of laminated temperedglass would result in a heavy blanketof shattered glass that may fall unlessfully-captured in the balcony frame.On the other hand longer shards of heatstrengthened laminated glass are morereadily retained in the frames.

Building Code RequirementsIn 2006, the Ontario Building Codechanged. Now, load from wind and liveload from impact have to be consideredtogether. In prior years, some design-


ers may not have considered live loadsand wind loads in combination and as aresult, overall guard design may havebeen weaker. Fortunately, nowadayswith those larger panels, the buildingcode does require designers to consid-er combined loads.

As of July 1, 2012, the OntarioBuilding Code changed again. Now allglass guard panels mounted over theslab edge to as much as 50 mm back ofthe slab edge must be laminated heatstrengthened glass. Glass panelsbetween 50 and 150 mm back from theslab edge can be the aforementionedlaminated glass or heat-soaked tem-pered glass. Glass set back more than150 mm can be just tempered glass.

Causes of glass breakage

Obviously glass can break by impact.What we`re talking about is sponta-neous breakage that seems to occur forno reason. Basically, the cause is impu-rities in the glass. These come from the

Figure 2: NiS with microcracks at perimeter [source Barry 2006]

raw materials used to manufacture glassand most are not a problem. Nickel isa problem. When combined with thesulphur (from the sodium sulphate usedto help eliminate bubbles) it createsNickel Sulphide (NiS) [NiS is just anabbreviation. There are various possi-ble chemical proportions of the Ni andS]. A single gram of nickel can con-taminate thousands of tonnes of glassand while it has been recognized as an

issue since the 1940s and reasonablywell managed, minor amounts of nick-el cannot be eliminated. Like all cool-ing liquids, the NiS inclusion forms intodifferent “phases” at different temper-atures. At higher temperatures, NiSforms an “alpha phase” and, at lowertemperature, it forms a slightly larger“beta phase” particle.

The rapid cooling caused by temperingglass can trap NiS in the alpha phase.Over a period of anywhere from a fewmonths to a few years, the NiS tries toconvert to the beta phase and since thebeta particle is 2% to 4% larger thanthe alpha phase particle, it expandscausing microcracks at the edge of theparticle (Figure 2). If the NiS inclusionis near the face of the glass in theperimeter compression zone caused bytempering, the glass may survive theexpansion forces; but, if it is in the ten-sion zone in the body of the glass, it cancause the characteristic spontaneousbreakage.


How do I know if my glass hasimpurities?

You can’t look at a panel and simplysee NiS with the naked eye. There arenon-destructive methods to look forNiS but they are costly, time consum-ing, and largely impractical.

You could take a reasonable samplingof panels and heat soak those panels toforce beta conversion to assess whetheror not the sample indicates a higherthan acceptable breakage rate but thatalso weakens the glass and that too istime consuming and expensive. It isalso only a sample and is not 100% cer-tain.

One way is to examine and monitor thebreaks you do get. Suppose you have ashattered tempered glass panel. Firstthing you do is clean up the glass, right?That’s a good, safe, practice; but, itwon’t help you determine if the break-age was caused by an impurity or ahockey stick.

If the glass can be recovered in a rela-tively intact form, the characteristic“Double D” or butterfly pattern ofbreakage about a NiS impurity may beseen at the point of the inclusion(Figure 3) – if you can find it. Thereyou may want a trained eye to help you.In the end though, just because yourglass panels include NiS impurities,

doesn’t mean that the glass is doomedto break. The impurity size, location,and other stresses from wind load allcontribute to the likelihood of the glasssuddenly shattering.

Glass on my building is 10years old. Do I still need toworry about breakage?The conversion of NiS from alpha tobeta phase noted above tends to occurbetween a few months and a few yearsafter manufacturing. If it is going tohappen, the overwhelming proportionof failures occur in 2 to 7 years with thelikelihood decreasing thereafter. Butpossible breakage from glass-to-metalcontact when an exposed edge of aglass guard panel rubs against a mount-ing plate, a guard post, or the edge of anadjacent glass panel can increase withage. The deterioration of the strength ofthe glass edge from this sort of rubbingcan take years. If the glass undergoeswind or physical forces greater thannormal, it can suddenly break.

Figure 3: NiS inclusion with Double Dfragments visible

[source Barry 2006]


So, the possibility of breakage due toimpurities decreases as the panel agesbut breakage due to construction ordesign problems and simple wear andtear increases with age.

If we should expect somebreakage, how much isnormal?

There’s a wide range of opinion on this.Opinion on “acceptable” glass panelfailure rates range from 2 in 10,000 to 2in 100. Absolute certainty on failurerates caused by NiS inclusions is notpossible, as reliable data on inclusion-induced failure is not available. Glassfalling from buildings is newsworthy;but, the media and the misinformed mayhave lead people to believe that glassbreakage shouldn’t happen at all. Asthis article attempts to illustrate, break-age of glass is both allowed and withinnorms, is acceptable. Reasonable opin-ion though is that if you have around 2breaks in 1,000 panels you should notconsider that to be unusual.

What can be done to preventinjury form from happening?

The current Canadian standards forglass don’t eliminate possible breakagefrom NiS inclusions because to do sowould simply eliminate glass from usein buildings. But, as long as the socialimperative is that public safety is para-mount irrespective of the technical hur-dles involved in achieving absolutesafety, steps should be taken to reducethe risk of injury. Here are a few ideasfor mitigating risk.

On new buildings with large near edgeguards and guards that pass by the edgeof the slab, builders are using heat-strengthened laminated glass. It is nowa requirement in Ontario. Hopefullyother Provinces follow suit. This rec-ognizes that laminated glass will staytogether if broken for any reason. Thatglass still must be fully captured by thefasteners, framing, or a barrier so thebroken glass doesn’t fall. Sometimesstructural silicone adhesive can be usedon the exposed edges of the glass toadhere the glass to adjacent metal posts.

Some capturing methods also reducechatter of the panel from wind shearand should prolong the life of the glass. On some buildings, there may be little-to-no risk of injury or damage if theglass falls. If you have a property in adense urban area with public sidewalksall around, the possibility of injury ismuch greater than if the glass falls intoa 20-ft wide planter where pedestriantraffic is unlikely. These buffer zones

are a reasonable precaution that doesn’tincur the same expense as changing thetempered glass to laminated glass.

Finally, if you are still worried aboutyour tempered glass guard panels, thereare films that can be applied that canhold it together. Unlike laminated glasswhere the film is between glass layers,these films are applied to the surface.



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The better approach to retrofit lamina-tion is to apply the surface film in acontrolled environment and that meansremoving the glass panels, taking themsomewhere to work on, cleaning theglass, and applying the film using theproduct supplier’s process. This couldrequire setting up a quasi-factory set-ting somewhere in the building. Thesesurface-applied films can degrade withexposure to ultraviolet light and maybe scuffed and cut but that may be areasonable trade off in some cases toreplacement with laminated glass.

Replacement of tempered glass withlaminated glass may not be feasibleeither. Laminated heat strengthenedglass would be thicker and likely weak-er than tempered glass which wouldmean modifications to the framing sys-tem.

A more likely option, if possible con-sidering the new code requirementsassociated with positioning of the glass,

would be to replace the glass with heatsoaked tempered glass of the same sizeand thickness.

Summary

In summary, if your tempered glassguards are over 7 to 8 years old and youhave had no spontaneous breaks or only1 or 2 breaks in 1000 panels, your riskis low that there will be an ongoingbreakage problem. If your glass guardsare small in size and only 6 mm thick,you have less glass mass to house inclu-sions so your risk of breakage is lowerthan if you have large panels with 12mm glass. If you have a wide land-scaped area and gardens around yourbuilding, your risk of injury or damageis obviously far less than a buildingwith public areas below.

As mentioned earlier, some panels areretained only at the top and bottomchannels and are not restrained from in-plane movement. In those cases, glass

can move around in the frame due towind effects and changes in tempera-ture. If you have guards that areretained only top and bottom and haveexposed edges, you may also wish tohave the panels reviewed to see if thereis risk of glass to metal or glass to glasscontact and take steps to correct poten-tial movement.

If you must replace the glass, there aredesign considerations that must be dealtwith to assure that wind loads andbreakage potential are dealt with appro-priately.

So, if you are an owner of a manager ofa building with glass guards, the issueis about managing risk and protectingagainst possible breaks rather thanbeing given some guarantee that glasswon`t break. Odds are, it`ll happen.When it does, now you`ll have a betterunderstanding of why and what you cando about it. ■


What is a reserve fund, andwhy do we need a reservefund study? The Condo -

minium Act, 1998 requires all Ontariocondominium corporations to maintaina dedicated fund (called a reserve fund)to pay for the major repair and replace-ment of the common elements andassets of the Corporation. A reservefund study is an independent study pre-pared by a qualified reserve fund plan-ner. It identifies the future major repairand replacement needs of the commonelements, and determines how muchmoney should be set aside each year toadequately cover the projected expendi-tures.

The Condominium Act outlines the fre-quency and general methodology forreserve fund studies, and identifies whois qualified to prepare them. However,there can be significant variations in theexperience level and approach betweenconsultants. As the outcome of thestudy is influenced, in part, by theapproach and judgement of the reservefund planner, it is important that youchoose an experienced and reputableconsultant to prepare your study.

A reserve fund balance is not a goodindicator of the fund’s health. A reservefund study calculates a schedule of con-tributions based on project expendi-tures. A reserve fund balance will, andshould, fluctuate from year to year. Acorporation that has recently investedin significant component renewal maycorrectly have a low reserve fund bal-ance, while a corporation with a heftybalance, but several large projectsplanned in the upcoming year or two,may actually be underfunded.

A reserve fund is meant to be spent. Itis not a rainy day fund that is meant tobe guarded. If the study has been pre-pared correctly, the funding plan willhave optimized contribution levelsagainst the forecasted expenses, assum-ing that the projects in the plan will becarried out generally as planned.Obviously, there will be variations inthe timing, scope, and cost of each proj-ect and this is normal. However, annu-al contributions are set based on theexpenditures included in the plan, soBoards should not have reservationsabout implementing legitimate reservefund projects that are included in the

plan simply for fear of depleting thebalance.

Interior refurbishments are discre-tionary, but necessary to maintain prop-erty value. Boards have an obligationnot only to repair or replace buildingcomponents that are worn or broken,but to maintain the property value onbehalf of all unit owners. While interi-or finishes and decorative elements arenot critical to building operation, theycan significantly affect the marketabil-ity of the units. Interior refurbishmentprojects may have more flexibility intiming and scope, but they are no lesslegitimate a reserve expenditure than aboiler replacement.

There is a wide range in the scope andcost of interior refurbishments, andhigher-end or design-intensive finisheswill have a different cost, durability,and impact than modest or less design-intensive schemes. It is the Board’sresponsibility, on behalf of all unit own-ers, to make prudent decisions that bal-ance costs with the benefits.

Not all common element repairs/

What is aReserve Fund?

BACK TO THE BASICS

BY CATHY LEE, P.ENG., HALSALL ASSOCIATES


replacements are legitimate reservefund expenditures. The CondominiumAct specifically states that the reservefund may not be used for additions,alterations, or improvements. The Actdoes provide for replacement usingmaterials that are appropriate in accor-dance with current construction stan-dards. As construction standards changeover time, this provision can be opento interpretation. It is the Board’sresponsibility, working with their prop-erty manager, auditor, and/or legalcounsel, to interpret these requirementsresponsibly, and ensure that only thoseexpenses allowed by the Act are drawnfrom the Reserve.

The study requires routine updates. Thereserve fund study is based on a num-ber of assumptions, based on the condi-tions observed at a specific point intime, and the input provided by theboard and management of the day. Theperformance of certain building com-ponents, the cost of certain materials,the long-term vision for the property,etc., can all change over time. For thisreason, the Condominium Act requiresthat the study be updated every threeyears, alternating with and without sitevisits. Generally speaking, interimupdates are not required unless, per-haps, a large unexpected expenditurearises when the fund balance is rela-tively low.

A well-developed funding model willset the stage for financial stability anda well-maintained and marketable con-dominium in future years. ■


CONDO OF THE YEAR – 1st Quarter FinalistCondo TSCC #1888

BY JAMES M. RUSSELL

One City Hall is One Great Condo!

Congratulations are extended to One City Hall who been selected as the 1st quarter finalist of CCI Toronto’s annual Condo ofthe Year Award!

The 2012-2013 annual grand prize winner will be selected from amongst the quarter finalists in the late summer of 2013 andwill be announced at the CCI Toronto Annual General Meeting in the fall of 2013. Further details on this contest may be foundon the CCI-T website at www.ccitoronto.org.

In five short years, One City Hallhas gained a reputation as one ofthe best managed and governed

condominiums in the G.T.A. With itsinnovative design, original art atstreet level, and quality construction,it has become one of Toronto’s pre-miere addresses and a Mecca foryoung professionals who want tolive at the very heart of our great city.

“For me, one of the best thingsabout living in the building is therooftop,” says Board Member MarkoStevelic. And he’s right. The pala-tial 13,000 square foot rooftop patio,with its spectacular 360o view ofToronto’s skyline, is skilfully fur-nished with comfortable loungesofas, tables, and umbrellas.

But what strikes visitors to One CityHall first are the two 16-foot greenwalls that grace the building’s lobby.


Board Member Beatrix Bérczi movedin even before construction was com-pleted. “I loved the neighbourhood andthe fact that it was situated in the com-mercial hub of the city.” With bustlingDumas Street East to the north, theEaton Centre to the east, and Toronto’sCity Hall and the financial district tothe south, One City Hall is withinwalking distance of shopping, tran-sit, entertainment and work.” About 50percent of our 522 units are occu-pied by renters and many of themare students, doctors, dentists, andyoung professionals who work orattend school in the downtown area,”says Nadim Kiani, a Board Member.Under new leadership, One City Hallhas begun purchasing their leasedHVAC equipment, has resolved thegym issue, made the cleaning staff full-time, and transformed that $35,000deficit into a $500,000-plus operat-ing surplus.

Management Team - Aleksandra and Chidi inlobby of Condo Board Members - front to

rear: Beatrix, Marko,Nadim, Keith and Marta

Front of building

LOCATION, LOCATION,LOCATION

Built by Diamante DevelopmentCorporation, a company whose web-site boasts proudly that they have“earned an international reputation forconstructing, designing and develop-ing projects of superior quality andesthetic excellence, “One City Hall wascompleted in early 2007. It rose froma neighbourhood of hundred-year-oldstore fronts that was once a predom-inately Jewish commercial area, andlater China Town.

Board Member Beatrix Bérczi movedin even before construction was com-

pleted. “I loved the neighbourhood andthe fact that it was situated in the com-mercial hub of the city.“

With bustling Dundas East to the north,the Eaton Centre to the east, andToronto’s City Hall and the financialdistrict to the south, One City Hall iswithin walking distance of shopping,transit, entertainment and work. “About50 percent of our 522 units are occu-pied by renters and many of them arestudents, doctors, dentists, and youngprofessionals who work or attendschool in the downtown area,” saysNadim Kiani, a Board Member.

The 19-floor building is home to a mixof units, from 375 square foot bache-lors, to 1,949 square foot, a three-bed-room unit, being the largest. Due to thelarge number of active residents, inaddition to the pool, wet and drysaunas, party room and two patios.

STORM CLOUDS

Sadly, One City Hall’s managementand governance health was not alwaysrobust. “When Brookfield took overthe site four years ago, there was trou-ble identifying where the building was(financially and operationally), nevermind where it was going,” saysProperty Manager AleksandraHomesin, R.C.M. She adds that notonly was the corporation strugglingwith an operating deficit of $35,000,but also the part-time-only cleaningstaff had been unable to keep up withthe full-time job of maintaining thebuilding and grounds.

“On top of that, the new managementcompany, and the new Board found thatthey had inherited a million dollar pluslease-to-own agreement for the build-ing’s HVAC equipment, a heavy guestsuite mortgage, and a gym that had an‘ownership issue’,” says Aleksandra.

Green walls, or vertical planting sys-tems, appeal not only to the eyes butalso to the environment and the budg-et. The plants serve as bio-filtrationunits to clean the indoor air and regulateheat and humidity. The concept ofgreen walls is rooted in the HangingGardens of Babylon (600BC), one ofthe Seven Wonders of the AncientWorld.


CAPTAINCY

One City Hall is gov-erned by five commit-ted, stylish, and smartBoard Members, all intheir 20s and 30s, allof them rising stars intheir respective pro-fessions. “We’vestructured our Boardmuch differently fromother boards in thatwe have no hierar-chy,” says Nadim. Inaddition to the novelorganizational structure, One CityHall’s Board doesn’t settle for a sim-ple majority of votes when reachingdecisions. “We always strive to reach

a consensus,” saysNadim.

An excellent workingrelationship with theirmanagement company isalso a key factor in CityOne’s success. “Ourmanagement team freesus from day-to-day con-cerns and allows us tofocus on the big picture,”adds Board memberKeith Chung. Some ofthose recent ‘big picture’projects include greeninitiatives such as:

• Energy upgrades and retrofits of theboiler pumps;

• Installation of carbon monoxidedetectors in the garage to reduce fanuse while ensuring residents’ safety;

• Installing motion sensors in all thegarbage rooms;

• Paperless Board meetings and themove to eliminate the traditionalmailing of budget and AGM pack-ages.

• Completely replanting both of thelobby’s green walls; and,

• The creation of a recycling aware-ness campaign that resulted inreducing the number of trash binssent to landfill from eighteen toseven bins per month, well withinthe City’s guidelines.

That level of environmental savvy, inpart, resulted in One City Hall beinggiven the opportunity to participate inthe City’s exciting Green Bin PilotProgram for Multi-Unit Residents. TheGreen Bin Program allows condo andapartment dwellers to put organicmaterial (fruit and vegetable scraps,paper towels, coffee grounds, etc.) Outfor separate collection along withgarbage and recycling. When the pilotended, the Board and management ofOne City Hall continued and expandedthe recycling program so that now, inaddition to a green bin, each floor’sgarbage room contains one blue bin forliquor bottles, one bin for hazardouswaste, and one bin for all other recy-clables. In 2010, Mayor David Millerpresented One City Hall andBrookfield Residential Services withthe Better Buildings Partnership Award“to recognize your leadership and com-mitment to our community and ourenvironment.”

DOLLARS AND SENSE

Today, the guest suite is mortgage-freeafter the outstanding amount was con-solidated with the building’s mechani-cal equipment loan. The move signif-icantly decreased the corporation’sinterest rate load. A similar saving, thistime to One City Hall’s overall utilitybill, was realized when the Board,undertook a substantial energy retrofitproject.

Further cost reductions have been realized or planned in the area of patio

A portion of the green wall in the lobby.

A resident working out in the gym

One City Hall offers residents the useof two gyms—one on the first floor andthe other on the third.

MANAGEMENT

Helming the day-to-day operations ofOne City Hall is the dynamic team ofProperty Manager AleksandraHomesin and Site Administrator ChidiEgwim. Aleksandra has nine years ofcondominium management experienceand shares the neat, efficiently laid-outoffice with Chidi, who started off onthe security desk and worked his wayup to Site Administrator. Chidi arrivedin Canada just three years ago with aM.B.A. from the University of Nigeriaand a burning desire to succeed.

Although fiscal management is at thetop of her personal mandate,Aleksandra is very team-centred. Sheensures that every employee’s birthdayis recognized and celebrated, whetherthey are a contract or direct-hireemployee. She and Chidi also organizeweekly BBQs for staff and encouragestaff to attend the many residents’events so that employees and residentshave the opportunity to get to knoweach other. “Community is important,”Aleksandra says. And so is information,which is why every new resident(owner or tenants) is given a mandato-ry information session at the time of aunit turnover. “The sessions go a longway toward minimizing conflicts andmisunderstandings,” says Aleksandra.


furniture purchases, reduced rates forresidents’ ATM transactions, and sourc-ing even further opportunities to reducegreenhouse gas emissions and increaseenergy efficiencies. Aleksandra enthu-siastically points out that, “Current pro-grams to educate owners and monitorenergy costs are already producingamazing results.”

When investigating options related torefinancing their current mortgages andleases, the Board and Managementdecided to look beyond the usual cast ofsuppliers and decided to work withLaurentian Bank. The resulting dealenabled One City Hall to refinance theirentire $4 million debt, freeing up dol-lars for further energy retrofits. To date,those retrofits and refinancing initia-tives have removed more than$100,000 from the annual expensesbudget.

Residents were told at their AGM lastMarch that condo fees would notincrease for the next five years, barringany real emergency. And that in year

six, the Board would notincrease fees by more than the currentrate of inflation.

Other capital projects include furtherenergy upgrades and, in recognition ofthe growing number of residents wholove their Downward Dogs, the instal-lation of a Yoga workout area adjacentto the pool.

With a progressive and forward-think-ing Board, a hard-working and devotedmanagement team and a vibrant resi-dent base, One City Hall is already agreat place to live and is poised tobecome even better as it approaches itssecond half-decade at the centre of thecity. ■

Rooftop patio and waterfall


Tarion Overhaul of Major StructuralDefect ProceduresBY: SHAWN PULVERHEENAN BLAIKIE LLP

Tarion has introduced significantchanges to the major structuraldefect claims process. These

changes will affect all condominiumprojects where the first arm’s lengthagreement of purchase and sale wassigned after July 1, 2012. All of thechanges are currently reflected inRegulation 992 to the Ontario NewHome Warranties Plan Act, and sum-marized in Builder Bulletin 24(revised).

After consulting with the condomini-um industry for the past several years,Tarion has expanded the definition of“major structural defect ” (“MSD”) toprovide further direction to owners,builders and condominium corporationsas to which deficiencies do in fact con-stitute a MSD.

The definition of MSD in theRegulations now refers to three sepa-rate “tests.”

The “failure” test looks at whether thedefects in work or materials wouldresult in “failure of a structural load-bearing element of a building.” Tariondescribes this as a “fairly stringent testthat contemplates actual structural fail-ure.”

The “function” test looks at a struc-tural load-bearing element and its func-tion. Accordingly, any defect in workor materials that materially andadversely affects the ability of eachstructural load-bearing element of thebuilding to carry, bear and resist appli-cable structural loads for the usual andordinary service life of such elementwill be a MSD.

The “use” test was referenced in theprevious definition of MSD, althoughthe current language has been revised.In order to constitute a MSD, the “usetest” requires that a “significant portionof the home (or common elements) is

materially or adversely affected.”The use test is an objective standardwhich looks at the usual and ordinarypurposes of a residential dwelling.Accordingly, in the condominium con-text, if a load bearing related deficien-cy significantly affects the use of acommon element lobby, then presum-ably Tarion would constitute this as aMSD.

As was the case under the previous pro-cedure, an MSD claim has to beadvanced by a condominium corpora-tion within 7 years of registration. Themajor difference is that if the deficien-cy does constitute a MSD under the


new definition, the builder now has anopportunity to either take full responsi-bility for the MSD, or reimburse Tarionan amount referred to as a “co-sharepayment.”

Builders will continue to have fullresponsibility for any MSD claimsmade in years 1-2 following registra-tion. However, for MSD claims madebetween years 3 and 7, builders are nowrequired to elect to either: a) take full responsibility for the

MSD; or b) re-imburse Tarion for a “co-share

payment.” For condominium com-mon elements, the co-share pay-ment is the least of i) Tarion’s costof resolving the MSD, ii) 5% of theaggregate sale price of all of all ofthe units, and iii) $750,000.00.These payments would also be sub-ject to any liability caps that areprovided in the Act.

Another significant change is that if anMSD claim is beyond the builder’s con-

trol, and constitutes an “industry wideissue,” then Tarion’s board of directorswould review this issue on a case bycase basis.

Under the new regime, Tarion has alsoclarified which types of deficiencies areexcluded from MSD coverage (even ifthe deficiency would otherwise fit with-in one of the three “tests” set outabove). The exclusions relate mainly todefects in design, work and materials.MSD coverage will not, for example,pertain to defects in work or materialsrelated to heating or cooling appliancessuch as furnace, air conditioner or heatpumps.

It will be interesting to see how thesechanges affect condominium corpora-tions, and whether the “three test” def-inition will give rise to more MSDclaims being approved by Tarion. It willalso be interesting to see whetherbuilders are more likely to assume fullresponsibility for a MSD (as was thecase before), or agree to a co-share pay-

ment, with the belief that they maypotentially limit their financial expo-sure. As we see more MSD claimsbeing brought under the new procedure,we will follow up with our assessmentof how the new process appears to beworking.

It should be stressed, however, thatsince this new process only applies toagreements entered into after July 1,2012, it could be years before newhome owners see the effect of thesechanges. For example, if on August 1,2012, a purchaser enters into an agree-ment of purchase and sale for a condo-minium unit in a building that has notyet commenced construction, it couldbe another 3-4 years before registrationof the Declaration and creation of thecondominium corporation. Once regis-tration occurs, there would be a sevenyear period for any MSD claims to beadvanced by the condominium corpora-tion. ■


GAME CHANGERS

An Interview withThe Honourable Margarett Best, M.P.P.,

Minister of Consumer ServicesBY: ARMAND CONANT AND JAMES RUSSELL

ABOUT MINISTER BEST

A lawyer, advocate and life-long com-munity volunteer, Ms. Best, was re-elected as the MPP in Scarborough-Guildwood in last year’s Provincialelection. Some of you may rememberthat Ms. Best was the lead Minister inOntario’s successful bid for the 2015Pan/Parapan American Games.

Ms. Best is an alumnus of theUniversity of Toronto and Osgood HallLaw School and holds an HonoraryDoctors of Law Degree from NorthernCaribbean University in her nativecountry of Jamaica.

She is a mother of three adult children,some of whom live in condos, and is anavid gardener.

On August 29, the day before this inter-view took place; Minister Bestannounced details of process for thereview of the Condominium Act, 1998including the Public EngagementReview Process and the formation ofthe Residents’ Panel to Review theCondominium Act. For further detailsplease visit the government website orthe news releases by both CCI(Toronto)and ACMO and their respective web-sites.

THE INTERVIEW

AC: As a lawyer, did you ever have theopportunity to practice condominiumlaw?

MB: I practiced real estate law, so cer-tainly an element of that included con-

dominium work; people purchasingcondominiums and people purchasingresidential homes.

AC: Now in your Riding, I believe youhave a number of condominium corpo-rations. Is that true?

MB: Yes, we have quite a number ofcondominiums in the Riding and I haveto steer clear of any conflicts-of-inter-

Our Past President and Chair of the Joint LegislativeCommittee, Armand Conant, Partner at ShibleyRighton LLP recently had the opportunity to chat withMinister Best about her Ministry’s plans for the CondoAct Review. Below is an edited and condensed versionof their conversation.

CCI Legislative Chair Armand Conant with thethe Hon. Minister Margarett Best


est because I have to wear two differenthats: one as MPP for Scarborough-Guildwood and one for Minister ofConsumer Services, so I have to becareful not to get involved in condo-minium issues in my own Riding.

AC: Could you tell us a little aboutyour philosophy as Minister? What doyou see as your role in terms of con-sumer services, protection and interac-tion with industry, particularly the con-dominium industry? How will your phi-losophy impact all condominium stake-holders?

MB: Well you know, in my role as theMinister of Consumer Services I cer-tainly feel that I have been given a man-date by Premier Dalton McGuinty,which is to protect the consumer’sinterests in the province. In that rolethere are different aspects of that pro-tection and the Condominium Reviewis certainly a part of that role. I alsohave to be very cognizant of the factthat condominium owners and residentsdo not exist in a vacuum; they exist inrelation with the other players in thecondominium marketplace. We alwayshave to remain mindful of all the vari-ous people who are our consumers inthe province and the roles that theyplay.

AC: With the support of the Premier,you have been the first Minister whohas been able to move forward condo-minium legislative review. CCI(Toronto) and ACMO have jointly beenadvocating for this, and we met withthe government over the years but theAct was never opened for review. Whydo you think it is so timely now, and canyou tell us how you were able to do thatwhich others were not?

MB: The Premier did say prior to evenappointing me to the position ofMinister of Consumer Services that hewas looking to open the Act and heincluded that in the platform for the2011 election. I was appointed as theMinister subsequently, and that promisebecame part of the mandate I was givenas the Minister of Consumer Services.

Certainly I believe that the Premier issomeone who is very well-tuned towhat is happening in Ontario with thevarious sectors that he as the Premierhas the privilege to represent. I believethat the Premier is very cognizant of thefact that the Condominium Act has beenin place now for almost eleven years,that the condominium marketplace hasreally exploded over the last ten years.It is a very complex marketplace andthe initial Act perhaps no longer reflectsthe many, many changes that haveoccurred in the condominium industryover the last decade.

There were issues that had beenbrought to the Ministry of ConsumerServices but in general we saw themany buildings going up across Ontarioand realized that the time has come forus to make the changes. The time hadcome for us to really have a detaileddiscussion with the people whose livesare most affected by condominium liv-ing and to see how we can look to for-mulate a new Act, an amended Act, sothat we can make the Act current. Not

just to make it current, but to make itforward-looking in terms of where thecondominium industry is at the presenttime and where it is going in the future.

You are well aware that condominiumsrepresent half of the new homes that arebuilt in the province and that over onemillion Ontario residents call condo-miniums their home and that number iscertainly rising at a very rapid rate.There are many young people comingout of school, my twenty-five-year olddaughter included. When she finishedher first degree and came home she did-n’t want to live with me she wanted tobe right downtown in a condominium.She stayed downtown working for ayear then went back to school and isnow living in a condominium near theUniversity of Western Ontario whereshe goes to school at the SchulichSchool of Medicine and Dentistry.

We felt that the timing was right to lookinto making changes to the Act and toprovide the kinds of protection that we



need to protect the consumers but alsoto ensure that we have the best market-place for the all various playersinvolved in the condominium sector.

AC: Now going to the legislative review,we understand from our meetings withthe government, and the announcementthat was on the government’s websiteyesterday that there is going to be a newstreamlined legislative review and con-sultation process. Can you explain to ushow that developed and how this newprocess will work?

MB: Certainly. Well, you know we livein a democracy and in this particularsector so many people are affected by it(the Condominium Act). When some-one purchases a home it is perhaps thebiggest purchase they will make in theirentire life, so we want to make sure thatwe engage in a process that is verydemocratic. This is a public engage-ment process and it is a collaborativeprocess and we want to have input from

the various players, such as the resi-dents and owners concerning changesto the Act, rather than prescribing toindividuals that ‘this is what we aregoing to do as a government’.

We want to engage the public in a verycollaborative way. We are looking forthe condo-residents and other stake-holder groups to actively participateand provide information in the processof the review of the Act so that we canbegin to build a shared and durablesolution. I think that what we plan todo will be very different from howthings were done in the past. It willallow us to provide the kind of resultsthat we feel will better protect pur-chasers, and better protect the residents,owners and everyone involved in termsof the governance and the managementof condominium corporations. It willbe an effort to modernize the Act toreflect today’s reality of what the con-dominium sector is and how fast it hasevolved.

AC: I understand from the announce-ment on the Ministry’s website thatthere are three stages? And that the firststage is the Residents’ Panel to Reviewthe Condominium Act? Could youexplain that just a bit?

MB: Yes, we are going to have threestages and the first stage will be ourMinister’s Public Information Session.Residents, owners, developers, proper-ty managers and other stakeholders willbe given the opportunity to learn moreabout the review and also at the sametime to share their views and theirissues at a series of Minister’s PublicInformation Sessions to be heldthroughout the province.

The Residents’ Panel is a body ofimpartial residents who are broadly rep-resentative of a community. The mem-bers of the Residents’ Panel will learnabout public policy issues and provideinformed advice to public authoritiesand decision-makers. The Residents’


Panel will provide opportunities forindividuals who are selected from con-dominiums across the province to meetduring the month of October andNovember to learn about theCondominium Act and to agree on a setof priorities to bring forward to the gov-ernment to make potential changes tothe Act. They will also meet for a fullweekend in September next year toreview and provide feedback on theproposed changes to the CondominiumAct before the report is completed andpresented to us as a government.

The Residents’ Panel involves a num-ber of residents. We have mailed out10,000 letters — in kind of a randomlottery — to recruit condominium res-idents for the panel. The letters havegone out to residents throughout theprovince of Ontario and basically it isan invitation to the residents to partici-pate on the panel. We are looking tohave them provide information on theissues and advise on how we can goabout improving the Act.

At the end of Stage One the work of theResidents’ Panel and stakeholders andsubmissions received will be combinedinto a report and the report will beavailable for public comment, which istargeted for release in early 2013. InStage Two, we will have experts in con-dominium issues who will review thefindings of the Residents’ Panel andwill bring forward recommendations toupdate the legislation. This report willavailable for public comment by theend of the summer of 2013.

Then we have Stage Three, when theResidents’ Panel will be reconvened toreview the report of options and recom-mendations to make sure it is reflectiveof the intent of the original proposal.The options and recommendations willbe then built into an action plan and thatis the action plan that we expect to buildthe amended legislation out of.

AC: It is a new and innovative legisla-tive review process. How long do youthink, if it all works well, that it would

take from start to the first reading ofthe new legislation?

MB: We have had quite a bit of discus-sion about timing in my Ministry, andin Cabinet. As you can appreciate,when you are dealing with so manyissues and the complexity of the con-dominium legislation. As a matter offact, at one discussion we had about thiswith my Caucus, one member said thatit is probably one of the most complexpieces of legislation in all of Canada.So in order to do justice we don’t wantto rush this thing because this is a verycomplex matter. This is a matter wherethe changing environment has seen asignificant evolution over the lasteleven years and will continue toevolve at a very rapid pace, so we wantto ensure at the end of the day we havecome up with the best possible piece oflegislation that will protect the con-sumer and also ensure that the wholecondominium community and the sec-tor is vibrant and working for all thevarious players well into the years tocome.

At the end of the interview the Ministerwanted to emphasize that this reviewprocess is not the only forum in whichOntarians can participate and giveinput. She invites all people inOntario to get engaged in the processwhether or not they are involved in thecondominiums, stay involved andreview all the public reports and infor-mation. You can do so by email to [email protected] ; on twitter or at anyof the contact methods set out on theMinistry of Consumer Services web-site.

The interview finished by discussinghow CCI (Toronto) and ACMO haveworked with the government over theyears and how we look forward to con-tinue assisting where and how we canas the review process proceeds. ■


New Members

CCI-Toronto Welcomes the Following New Members

Corporate MembersMTCC #0601MTCC #0763MTCC #1109MTCC #1140MTCC #1242PCC #0611Peterborough Condo Corp #0068PSCC #0853PSCC #0930TSCC #1659TSCC #1766TSCC #1849TSCC #1946TSCC #2064TSCC #2073TSCC #2136TSCC #2172TSCC #2203TSCC #2220TSCC #2221TSCC #2232YCC #0191YNCC #0004YRCC #0688YRSCC #1116YRSCC #1206

Individual MembersJ. AndersonZ. AntiaH. ToliverG. WaiserP. Wong

New Sponsor (Trade) Members

Andrejs Management

Cion Corp.Kevin Shaw

e-CondoTower BIMIan Franke

Felco Contracting & MaintenanceDavid Constancio

Gelderman LandscapingNathan Helder

Great Northern InsulationDave Chatterton

GTA Maintenance Systems Inc.Michael Gardener

High Rise Window and Power CleaningJarek Michalski

Management Resource CenterSabine Liedel

Saunders Plumbing & Heating IncMorris Jayatilake

Professional MembersTrestan ChenAffable Property ManagementCorporation

Jeronim DyrmishiDel Property Management

Barbara KwanShiu Pong Management Limited

Jeffrey Walter Lem Miller Thomson LLP

Tony MarnerTrivest Developments Corporation

Joy MathewsFine & Deo Barristers and Solicitors

Susan RussellAvison Young

Benjamin J. RutherfordFine & Deo, Barristers and Solicitors

Tania StalteliTaylor Property Management

Bill TourloukisBrookfield Residential Services Ltd.

David Cousins, P.Eng.President

Tel: 905-792-7792Fax: 905-792-7829 Cell: 416-454-7400Email: [email protected]: www.davroc.com


In Memoriam

The condominiumcommunity is great-ly saddened by theloss of Ron Dankswho passed awayon August 7th 2012Ron was a partnerin the Hamilton/Burlington basedlaw firm ofSimpson Wigle,LLP and practicedcondominium lawfor over 25 years. Words cannotdescribe the incredible contributionRon made to the condominium com-munity in Ontario and across Canada.

Ron was actively involved with theCanadian Condominium Institute andthe Association of CondominiumManagers of Ontario. He was on theCCI National Board of Directors for 19years, its President in 2001-2002 andChair for 2002-2003. In addition, hewas a director and past-president of theGolden Horseshoe Chapter of CCI. Hewas also an Associate member ofACMO and worked on various com-mittees over the years for both organi-zations, including being CCI national’srepresentative on the ConferencePlanning Committee for several years.

In the 1990’s, Ron was part of the jointCCI/ACMO Legislative Committeethat submitted a legislative brief in thedevelopment of the Condominium Act,1998 from which many suggestions andideas were incorporated. Ron contin-ued these efforts with our present jointLegislative Committee and has mademany valuable suggestions for legisla-tive reform. I thank him dearly for hisvaluable input to our committee.

In addition, Ron was aprolific author and alecturer on condomini-um law and adminis-tration and a tirelessadvocate for the con-dominium industry, allwhile maintaining anextremely busy lawpractice. Despite thisworkload, Ron alwayshad time to listen toyour problems and

provide sage advice (I can speak frompersonal experience). As Don Kramerfrom Alberta has said, “Ron blessed uswith his dry wit, wisdom and his uncan-ny ability to make the difficult lookeasy”. Like Don and many others, Iwas honoured to have called Ron myfriend.

The first time I really got to know Ronwas when we participated in a skit puton years ago at the condo conference,demonstrating an owner’s meetinggone bad. I was in my courtroom, liti-gation gowns and Ron came in his BoyScout Leader’s uniform. As I got toknow Ron over the years, I came torealise that the uniform epitomized him- caring, honest and supportive of oth-ers, while always hard working and pre-pared.

Ron, we will all miss you and we thankyou for your contribution, dedicationand commitment to the condominiumcommunity and industry, but moreimportantly, we thank you for being afriend and leader to all. ■

Prepared by Armand Conant

Ronald Stephen Danks, B.A. (Hons.), LL.B., ACCI, FCCI

Level 200 CourseDates & Times: Saturday October 20th and 27th,

20129:30 to 4:00 p.m. each day

Location: North York Novotel Hotel, 3 ParkHome Avenue

Cost: $200 for Members, $275 for Non-Members (plus HST)

Level 201 Course Dates & Times: Saturday November 17th, 2012

9:00 a.m. to 12:00 p.m.

Location: North York Novotel Hotel, 3 ParkHome Avenue


Level 101 Course [Webinar]Webinar Dates: Wednesday January 16 & 23rd, 2012

Webinar Times: 7:00 to 8:30 each evening


For further course information, to download registration forms orto register online, please visit www.ccitoronto.org/Education

CCI-TorontoAnnual GeneralMeeting/Seminar/Wine & CheeseReception for MembersThursday October 25th, 20126:30 p.m. to 9:30 p.m.

Novotel Hotel Downtown45 The Esplanade

Free to Members – Details and Registrationavailable by mid-September

CCI-T/ACMOCondominium ConferenceFriday November 2nd and Saturday November 3rd, 2012

Toronto Congress Center 650 Dixon Road

Visit the conference website at: www.condoconference.ca for full details.

Special pricing now available for CondominiumDirectors!!

Mark YourCalendars!!

www.ccitoronto.org



DONNASWANSONACCI, FRI

Real EstateBrokerage

For your Real Estate Needs call:416-515-2121

• Real Estate Broker of Record - specializing in Condominium Salessince 1982

• Current condominium Owner, Past President and Director • ACCI - An Associate of the Canadian Condominium Institute• Past Director of Toronto Chapter of CCI• FRI - Fellow of the Real Estate Institute of Canada and pastDirector of Toronto Chapter of REIC

Email: [email protected]

Member’s CornerToronto and Area Chapter

NEEDED!!

Photos for the 2013Annual CCI Calendar

If you would like to see your condominium propertyfeatured in the 2013 CCI Toronto Annual Calendar,please send us your photos.

Criteria:■ Only CCI-T member corporations will be featured■ Photos must be high resolution colour photos■ Photos can be emailed to ccitoronto@taylorenter-

prises.com or if files are large, they may

be uploaded to: www.ccitoronto.org/upload/■ Deadline to submit photos is September 30th,

2012■ Photos can be indoor or outdoor shots; if outdoor

shots, ideally taken in a variety of seasons

The Year of Education – FREECourses!!CCI-Toronto is pleased to announce that 2012-2013 will be recognizedby our chapter as the Year of Education. This will have a significantimpact on condo corporation membership renewals as renewing with

CCI-T means that you automatically willreceive two complimentary registrationsfor Directors for the Level 101 course aspart of your membership package. CCI-T strongly believes in the value of edu-cation for all Directors and our goal is tohave as many Directors as possible takepart in our educational programs.Therefore, once you renew your mem-bership for 2012-2013, don’t forget to

add to your next board meeting agenda the item of CCI Education.Plan early and decide on which directors will take advantage of thisoffer and which course offering they will attend.

The offer is only valid between September 2012 and June 2013 andcourse dates are now posted on our website (www.ccitoronto.org)

Don’t Forget to Renew Your CCIToronto MembershipNotices for membership renewal were mailed to all members in earlyJune. A large majority of members have already renewed for the 2012-2013 year. If you are among the few who have not yet renewed, pleasedo so today in order to keep receiving your CCI-T benefits, such asyour subscription to the CondoVoice!

If you require another copy of your membership renewal noticecontact our membership coordinator, Cathie Breton, at (416) 491-6216ext.112 or [email protected]


Condo corporations dealing withowners who do not comply withthe rules expect to be able to

recover their legal fees from owners.But in recent cases the courts haveshown that, even when the corporationis successful, they will assess the rea-

sonableness of the corporation’s costsin determining the amount the ownerwill have to pay. These cases offer avaluable lesson for condominium cor-porations on how to ensure maximumpossible recovery of their legal costs,and for owners on how to minimize thelegal costs they’ll have to pay.

In a recent case, MTCC No. 744 v.Bazilinsky1, the unit owners were takento court by their condominium corpora-tion for allegedly having a parrot intheir unit, contrary to that corporation’sno-pet by-law. At the initial hearing ofthe matter in August 2011, the ownersconsented to the compliance order andthe corporation was awarded courtcosts of $3,000, which was equivalent

to an offer to settle they had made twomonths prior to the court date. Afterthe application was heard, however, thecorporation sent the owners a bill forlegal costs in the amount of $21,897.The new bill was based on s.134(5) ofthe Condominium Act, 1998 (the

“Act”), which allows a condo corpora-tion to recover from the unit owner allof the costs it incurs in obtaining a com-pliance order. The owners brought thematter back to court seeking an assess-ment of the corporation’s costs. By thetime the matter went back to court inFebruary 2012, the corporation soughtcompensation for all of its legal bills upto that date, which by then exceeded$41,000. The court said that the cor-poration was not entitled to any costsit incurred after it had obtained its com-pliance order in August 2011 and, fur-thermore, the application was a rela-tively simple matter and the costsshould not have exceeded $6,500. Thiswas further reduced by an award of$5,000 in court costs to the owners.

The Bazilinsky case has been much dis-cussed in the condominium communi-ty but in fact it is consistent with othercases in which courts have taken a seri-ous look at the amount the condomini-um corporation has sought against unitowners for legal fees. For example, in

TSSC No. 1633 v. Baghai Develop -ments Limited, the court reduced thesuccessful condominium corporation’slegal costs from $200,000 down to$100,000 (this decision is currentlyunder appeal and a decision has not yetbeen rendered).

Similarly, in PCC No. 452 v. Jaworoski,the corporation sought compensationfrom the unit owners for its legal costsin relation to two court actions, bothemanating from the unit owners’ arrearsin the payment of common expenses.(The arrears totaled $6,532.37 and oneof the actions was a small claims courtaction, which was dismissed, initiatedby the unit owner for an accounting ofthe arrears.) Although the court found

When it comes to determining responsibility for legal fees, courts always look morefavourably on parties who have made efforts to settle.

Parrots, Dogs and Parking: Best Practice Tips from the Courts inCompliance Matters

BY: JOHN DE VELLIS, SHIBLEY RIGHTON LLP


that the corporation was entitled torecover the costs of both actions, itnonetheless reduced the amountpayable the corporation could recoverfor its legal fees from $73,329 to$20,387. The court found that therewas “absolutely no proportionality” tothe amount claimed by the corporationand it did “not reflect the complexitiesof the issues, the amount claimed or thereasonable expectations of the otherparty.”

These cases follow the direction of the2005 decision of the Ontario Court ofAppeal in MTCC 1385 v. SkylineExecutive Properties Inc. (“Skyline”).In Skyline, which is considered theleading case in this area, the court saidthat, although section 134(5) of the Actgives the condominium corporation theright to compensation for all of its legalcosts, those costs are subject to assess-ment in the same way that a client maychallenge his or her own lawyer’s legalbills (known as a solicitor-client assess-ment). That means that the court may

look at such factors as the amount oftime or hourly rates charged in relationto the degree of complexity of the mat-ter, the importance of the case, and thereasonable expectation of the partyexpected to pay the costs.

On the other hand, unit owners havebeen hit with large cost awards in situ-ations where the court has found themto have acted unreasonably. In aDecember 2011 decision (Hakkim andJaffar v. TSCC No. 1737), for example,the unit owners were ordered to pay$45,000 in costs plus $5,979.98 in dis-bursements for having “engaged the[corporation] in protracted litigationarising from a dispute related to parkingfacilities and privileges.” It is clearfrom the decision that the court felt theowners had unreasonably drawn out thelitigation and increased the corpora-tion’s costs by raising numerous issuesthat had no merit.

In another recent pet case (YCC No. 26v. Ramadani), the condominium corpo-ration had sent the unit owner severalwarnings about her dog, which hadbeen barking at passers-by and reliev-ing itself from the balcony. Prior to ini-tiating legal proceedings, the corpora-tion had written to the unit owner sev-eral times regarding her dog. The cor-

‘…the court may look at such factors as the

amount of time or hourlyrates charged in relation

to the degree ofcomplexity of the matter,

the importance of thecase, and the reasonableexpectation of the party

expected to pay the costs.’


poration’s letters clearly set out, indetail, the nature of the complaints,gave her an opportunity to take correc-tive action (and offered to assist her ingoing so) and even suggested she speakto a lawyer. The corporation had alsoconducted its own investigation to cor-roborate the complaints that had beenmade by the owner’s neighbours. Thecourt concluded that the owner hadacted unreasonably: she made noresponse to reasonable communicationfrom the condominium corporation andits lawyers, failed to participate inmediation, and raised specious defens-es to the corporation’s allegations.

These cases offer valuable lessons forboth condominium corporations andunit owners:

1. Before going to court, clearly set outto the unit owner, in writing, thenature of the problem, including, ifnecessary, any independent corrob-oration, and give the owner theopportunity to correct the problem.

Suggest that the owners get inde-pendent legal advice before theyengage the corporation in a fruitlessand expensive legal battle.

2. Owners should recognize that thecorporation has a duty to uphold theby-laws and rules and should con-sider whether they have a genuinedefense to the corporation’s claim orwhether they really just don’t likethe rule or by-law they are accusedof violating. Engaging the corpora-tion in drawn out litigation that hasno merit may end up costing theowner dearly.

Corporations should keep a close watchon legal fees: despite s. 134(5) of theAct, courts will assess whether the feesare reasonable and proportionate to thecomplexity of the matter.

A related technical point is that,because legal fees are only recoverableup to the time the compliance order isobtained, condo corporations would be

wise to have all matters—includingtheir entitlement to costs under s.134(5)of the Act—assessed at the hearing ofthe compliance order.

Make reasonable efforts to settle. Whenit comes to determining responsibilityfor legal fees, courts always look morefavourably on parties who have madeefforts to settle.

Disputes between owners and their cor-porations have become the singlebiggest issue in the condominium com-munity today. ACMO and CCI areworking hard to find better dispute res-olution models to propose to theOntario government. In the meantime,however, if both corporations and own-ers follow these best practices it maygo a considerable way to keeping legalcosts as low as possible for all parties.

1 The author was the lawyer for the unit ownersin the Bazilinsky case. ■


Look Out Below!Some thoughts on FallingBalcony Glass

BY BRIAN HORLICK, B.COMM., B.C.L., LL.B., ACCIHORLICK LEVITT DI LELLA LLP

For enthusiasts of the condomini-um lifestyle, it may come assomething of an annoyance that,

seemingly, the only publicity that con-dominiums get is negative publicity.The recent news stories and public dis-cussion on falling balcony glass, sadly,are no exception.

As most people reading this article arewell aware, in recent months a spate ofOntario condominiums have experi-enced issues with balcony glass (beingthe glass panels installed in place of themetal rails or panels common in olderbuildings) breaking and falling to theground below. This raises numerousissues, including questions of safety,responsibility for repair, and therecourse that newer condominium cor-porations may have relating to con-struction warranties.

Watch for Falling Glass

Of course, the most pressing issue whendiscussing the prospect of glass fallingdozens of stories is that there might bepeople standing below that fallingglass. Fortunately, to the best of thisauthor’s knowledge, there have been noserious injuries reported as a result offalling balcony glass. Nevertheless, the

threat of injury remains a concern.

Section 117 of the Condominium Act,1998 provides that no person shall per-mit a condition to exist if the conditionis likely to cause injury to an individualor damage to property. Condominiumcorporations and unit owners and resi-dents, among others, are required tocomply with this provision, and condo-minium corporations are required totake all reasonable steps to secure com-pliance.

Accordingly, where there is a danger ofbalcony glass falling and injuring a per-son or damaging property, it is clearthat condominium corporations have anobligation to take reasonable steps toprevent this from occurring. Thesesteps may include a program of regularinspection by the corporation’s engi-neer, with scheduled re-inspection if theengineer identifies a need for such a re-inspection, and even replacement of thebalcony glass with unbreakable panelsor with a non-glass replacement.

Typically, balconies are part of a condo-minium corporation’s common ele-ments and are the corporation’s respon-sibility to maintain and repair. As such,it is likely that the corporation would

bear the cost of repairing or replacingthe balcony glass panels (if such repairor replacement proved to be necessary),although a board of directors shouldcheck the corporation’s declaration andconfirm with management and with thecorporation’s lawyer prior to proceed-ing. Depending on the parameters ofthe work to be done, it is possible thatthe cost of repairing or replacing thepanels (or a portion thereof) could beconsidered to be a valid reserve fundexpenditure. The provisions of section97 of the Act, dealing with the obliga-tion in certain circumstances to providethe unit owners with prior notice ofwork to be done by the corporation,should also be considered.

Will Insurance Cover This?

Obviously, the answer to this questionwill depend on the wording of an indi-vidual condominium corporation’s pol-icy of insurance. Every condominiumcorporation is required by section 99 ofthe Act to obtain and maintain insur-ance for damage to the common ele-ments. It is worth noting that subsec-tion 99(3) of the Act provides that anyexclusion in such a policy of insurance“with respect to damage resulting fromfaulty or improper material, workman-


ship or design” is of no force or effect.

The courts had occasion to consider thisprovision in the case of Ottawa-Carleton Standard Condominium Corp.No. 687 v. ING Novex Insurance Co. ofCanada. In that case, the condominiumcorporation was seeking coverage fromits insurer for the cost of replacing thewater standpipes in the building, which

standpipes had been improperlyinstalled and were subsequently brokenby a water hammer. The condominiumcorporation sought coverage on thebasis that the damage to the waterstandpipes was damage resulting fromthe faulty or improper design and instal-lation of the standpipe system, but theinsurer denied coverage based on anexclusion clause in the insurance poli-

cy. The corporation then commencedcourt proceedings against the insurer,arguing that subsection 99(3) of the Actcaused the exclusion relied upon by theinsurer to be of no force or effect.

The corporation was successful in thefirst instance, but the insurer appealed.On appeal, the Court of Appeal heldthat subsection 99(3) did not serve tonullify the exclusion clause in the insur-ance policy, and that the exclusionclause was therefore effective. In com-ing to this decision, the Court held thatflood damage caused by the standpipesystem breaking was resultant damage(and the insurer had in fact paid outclaims in respect of flood damage), butthat the system breaking was not result-ant damage. Given that the standpipesystem was flawed when the insurancepolicy was obtained by the condomini-um corporation, the insurer was effec-tively responsible to insure the systemin the condition it was in on the day thatthe policy was obtained.

Applied to the subject matter of thisarticle, it appears that, if glass panelsfall as a result of faulty or impropermaterial, workmanship or design, thedamage caused by the falling panelswould likely be covered (because anyexclusion clause in respect of suchdamage would be nullified by subsec-tion 99(3)), but the damage to the pan-els themselves might not be. ■


Consider implementing the following Owners’ Code of Ethics at your condo:

OWNERS’ CODE OF ETHICSBY J. ROBERT GARDINER, B.A., LL.B., ACCI, FCCIGARDINER MILLER ARNOLD LLP

Owners are encouraged to participatedemocratically and ethically in theCorporation’s affairs using the follow-ing guidelines:

Important decisions and recommenda-tions are often made at owners’ meet-ings which may substantially affect thevalue of your unit as well as the appear-ance and quality of lifestyle at yourcondominium. It is strongly recom-mended that owners attend these meet-ings instead of signing a proxy formand delegating their votes to a thirdparty. Only owners who attend themeeting have a chance to find out whatis going on, participate in discussions,raise any concerns, assess directorialcandidates and exercise their own wis-dom to elect qualified people to theboard of directors.

Since the board of directors is solelyresponsible to make the vast majorityof decisions for the Corporation, own-ers should carefully select capable can-didates to be elected as directors.Recognize the contributions of volun-teer directors who have the skills, qual-ifications, experience and commitmentto protect the owners’ best interests,enhance unit value, supervise manage-ment of the Corporation’s affairs in afinancially responsible manner and pro-mote a harmonious atmosphere in thecondominium community. Ask candi-dates who promise cost savings toexplain in detail their cost-saving justi-

fications. Which existing services willthey cut, how can they practicallyaccomplish that, and how will reduc-tion or elimination of such servicesaffect you? Ask candidates if they willcomply with the Directors’ Code ofEthics. Prefer candidates who havecompleted the Condominium Coursespresented by the Canadian Condo -minium Institute, particularly candi-dates who have had at least three years’experience as a director.

Directorial candidates must complywith their statutory standard of care,diligence and skill and their duty to acthonestly and in good faith. Directorsmust undertake necessary maintenanceand repairs of the Corporation’s com-mon elements and assets and ensure

proper funding of the Corporation’sreserve fund, in addition to numerousother duties. Common expense increas-es are inevitable as buildings age andwill save owners the risk of specialassessments and increased maintenanceand repair costs in the future. Ownersshould support directors who establishrealistic budgets and a forward-lookingfunding plan, even if they call for nec-essary common expense increases toavoid special assessments.

If you must be represented at the meet-ing by proxy, only appoint as your proxyholder a person you know, respect andtrust to protect your interests and actwisely on the spot. If a candidate isattempting to get elected by defamingexisting directors, don’t give your proxyaway – instead, go to the meeting so youcan act judiciously and hear all sides ofthe story before voting.

If you choose a candidate by proxyinstead of attending at an election meet-ing, you will lose the opportunity toassess the abilities of candidates nom-inated from the floor. Consider amend-ing your proxy form with one of thesealternatives: (a) clearly print, in yourown hand, the name of any candidateyou wish to be elected as a director (orinitial your choice of any candidate(s)already listed in the proxy) – do notallow any other person to select on yourbehalf the candidate(s) to be elected asa director; (b) restrict your proxy form


for specified purposes only, such as “tobe used only to vote for (or against) theby-law”; or (c) insert and initial thewords “for quorum purposes only”.

Do not be swayed by undocumentedallegations made during proxy solicita-tions or in newsletters. In a democracy,legitimate criticisms can be expressedwithout malice where a critic has under-taken the due diligence to ascertain theaccuracy of negative statements. Beforeaccepting the validity of accusations,unfounded conjecture, innuendo or othertechniques of fear-mongering, ownersshould question the accuracy of suchstatements and the use of those tech-niques. If you feel a candidate is mak-ing self-serving accusations againstanother candidate in order to get him-self elected, examine the accuracy andreliability of the accusations.

Before criticising others or accusingothers of defamation, bear in mind that,

at law, any defamer who originates,repeats or publishes to any third party alibellous (written) or slanderous (oral)statement or a rumour which is erro-neous and defames the reputation of anidentifiable person is personally liablefor monetary damages. A defamer canonly defend a defamation claim byproving one of three defences: (a) JUS-TIFICATION (i.e. proving the truth ofthe allegation); (b) QUALIFIED PRIV-ILEGE (where a person has a specialduty to make such a statement bona fideand in good faith (even if the statementis wrong), if the defamer can prove nomalice is present); or (c) FAIR COM-MENT (where a defamer makes anerroneous defamatory statement whilerendering a bona fide opinion basedupon true facts after conducting duediligence, if the defamer can prove nomalice is present).

Owners should participate in owners’meetings by speaking clearly, while

refraining from shouting, speaking inan aggressive or hostile manner, inter-rupting others who are speaking,monopolizing the discussion or display-ing a lack of consideration for others.Genuine disagreements, questions andconcerns should be expressed politelyand at their appropriate time in themeeting agenda. Instructions of themeeting chair must be followed.

Support your board of directors andappreciate the complexities facingproperty managers. Act reasonably atall times in your dealings with theboard of directors and the propertymanager.

Readers are welcome to visit CCINational’s website to download and usethe complementary Owners’ Code ofEthics as a one-page article in your con-dominium’s newsletter, or as hand-outat an owners’ meeting (www.cci.ca). ■


Visit the CCIWebsite

at

www.ccitoronto.orgfor current information on

upcoming CCI Courses and Events!


In the vast majority of instances, it isimportant for condominium corpora-tions to actively enforce their decla-

rations, by-laws and rules. In fact, sec-tion 17(3) of the Condominium Act,1998 (the “Act”), imposes an obliga-tion on condominium corporations totake all reasonable steps to ensure com-pliance. However, there are certaininstances when condominium corpora-tions should exercise discretion andobtain guidance from legal counselbefore seeking to enforce. An exampleof such a predicament is the placementof a mezuzah on a unit’s exterior door-frame. This issue has previouslyreceived media coverage in the UnitedStates and has recently resurfaced.

Common practice amongst most mem-bers of the Jewish faith is to affix asmall ritual item on their doorpostsknown as a mezuzah, which containsbiblical verses written on parchment.This ritual is regarded as a religiousobligation and canonized as such in theJewish Bible (the Torah). A potentialproblem can arise when a condomini-um corporation has a rule prohibitingitems placed or affixed outside of units.On the one hand, section 58 of the Actrequires rules to be reasonable.

Rationales for this rule can include sty-listic consistency and integrity, main-taining property values, insurancerequirements, or safety concerns.

The mezuzah controversy rose toprominence in Chicago in 2001, whenthe condominium association at the378-unit Shoreline Towers adopted arule banning “mats, boots, shoes, cartsor objects of any sort… outside unitentrance doors”. The Board determinedthat this rule must be enforced in anabsolute manner, and accordingly,Shoreline Towers managementremoved the hallway mezuzot.Complaints by Shoreline Towers resi-dents were filed with the ChicagoCommission on Human Relations,Illinois Attorney General, and U.S.Department of Housing and UrbanDevelopment, alleging housing dis-crimination on the basis of religion.

In 2006, a federal court judge deter-mined that the condominium associa-tion’s rule did not violate the FederalFair Housing Act, which was upheldon appeal in 2008. However, in 2009,the U.S. Court of Appeals for the 7thCircuit in Chicago reversed the 2008decision, and the case proceeded. In

2011, after years of legal fees andaggravation for all parties, a confiden-tial settlement was achieved.

As a result of the Shoreline Towers con-troversy, Chicago’s Municipal Codewas amended in 2005 to make it illegalto prohibit a renter or owner of an apart-ment, house, or condo from “placing oraffixing a religious sign, symbol or relicon the door, door post or entrance”.Furthermore, in 2006 the IllinoisCondominium Property Act wasamended to provide that the board maynot make a rule that prohibits any rea-sonable accommodation for religiouspractices, including the attachment ofreligiously-mandated objects to thefront door area of a condominium unit.

Mezuzah legal battles, similar to theShoreline Towers controversy, playedout in other states as well. A Floridacondominium association was deemedto have discriminated against a unitowner when it threatened her with afine if she did not remove her mezuzahfrom her exterior door. This case waspart of the impetus for the state legisla-ture to amend the Florida Condomin -ium Act in 2008, modeling the Illinoisamendment.

Similarly, a Houston condominiumassociation was embroiled in a legalproceeding with a unit owner who wasviolating association rules by affixing amezuzah. Although the U.S. DistrictCourt judge ruled in favour of the con-

Conflict Between CondominiumDeclaration and Religious PracticesBY JOSEPH SALMON, HEENAN BLAIKIE LLP

To Affix or Not to Affix – To Enforce or Not to Enforce – These are the Questions


dominium association, Texas legisla-tion passed in 2011 effectively negatedthe decision.

Very recently, the media was abuzzwith the news that a Connecticut con-dominium association ordered anowner to immediately remove her unit’smezuzah or face a daily fine of $50.The condominium’s lawyer advised themedia that the declaration prohibitedunit owners from hanging or display-ing items outside windows or wallswithout the prior consent of the associ-ation’s board. The association allowedcrosses and Christmas wreaths to bedisplayed but required the unit ownerto remove her mezuzah. After the unitowner retained legal counsel and mediapicked up the story, the matter wasresolved with the unit owner being per-mitted to keep her mezuzah up and theassociation publicly apologizing.1 Theassociation president claimed that itwas a misunderstanding and the con-dominium was not aware of the signif-icance of the mezuzah.

In Canada, the Supreme Court deter-mined in 2004 that sincere personal reli-gious beliefs override the terms of a con-dominium declaration and unit ownerswere allowed to erect a temporary ritu-al hut on their balconies (known as aSukkah) despite the provisions of thedeclaration. While this case and its ram-ifications has stirred some controversyin the legal community as to the extentto which a condominium corporation isrequired to accommodate religiousbeliefs, it is clear that condominium cor-porations do need to take religiousbeliefs and practices into account withenforcement matters.

Like most legal situations, especially inthe realm of human rights, context andparticular facts are critical and no twocases are the same. However, the afore-mentioned mezuzah cases and theSupreme Court’s decision provideimportant factors to consider in the con-text of enforcement matters, including:• the reason for the unit owner’s infrac-tion;

• the underlying rationale for the ruleor provision;

Ultimately, each situation is unique andit is always advisable to involve legalcounsel as early as possible to avoidcomplications down the road.

1 See http://www.ctnow.com/news/connecticut/fair-f i e l d / h c - s t r a t f o r d - c ondo -mezu z ah - 0328 -20120327,0,7900799.story; http://www.ctpost.com/news/article/Stratford-woman-can-keep-mezuzah-3455717.php ■

• has the rule’s rationale been clearlycommunicated or has the corporationrequested an explanation of the reli-gious practice?

• are there any reasonable alternativesinstead of strict enforcement orignoring a rule?

• have these alternatives been commu-nicated or requested? and

• has the rule been selectivelyenforced?


Proposal to Ensure the Proper Maintenanceand Repair of the Common Elements ofCondominium CorporationsBY MARIO DEO, BA, LL.B., FINE & DEO LLP

The last round of CondominiumAct amendments did quite agood job at ensuring that condo-

minium boards put the appropriateamount of money into the reserve fund.It was clearly understood at the time,by all, that it was not enough to leavethe previous approach of the legislationintact, which stated simply that a con-dominium has to have an adequatereserve fund, with a minimum of 10%contribution into the fund. There wasno step-by-step obligatory frameworkas there is now. Past experience hadshown that if you did not tell boardsexactly what to do and when to do it,the result would be a significant num-ber of condominiums having a disas-trous reserve fund and unexpected spe-cial assessments.

True, most condominiums were well-governed buildings and projects, anddid not need the new legislation as theywere doing fine. It was the significantminority of corporations that werebeing protected by this legislation bothin terms of the actual condominiumbuildings and the residents in eachbuilding. The political and legislativephilosophy was simple – the legislationwas being passed to protect the minor-ity of buildings that would predictablybe inadequately governed, so the goalwas (and is) to protect the residents inthe subject buildings from the tyrannyof bad government, by strictly and

absolutely ensuring that reserve fundswill be adequate in these buildings. Thelegislation has worked very well inachieving its goal.

Essentially, the present reserve fundlegislation leads boards, telling themhow often they need to have a reserve

fund study and updates to the study andrequiring that an amount of no less thanthe amount specified in the reserve fundstudy be put in the reserve fund. Thelegislation also includes detailednotices to be sent to owners as a wayto not only inform residents, but to giveboards the feeling that their work isreviewed by all residents and pur-chasers, thereby placing fewer stake-holders in the dark.

It was a really smart way to do thingsbecause, as we all know, if you leaveinterpretation up to the individualboards, while most boards will satisfy

the condominium corporation’s needfor a reserve, some boards will end upwith reserve fund disasters. The legis-lation in this regard worked so well thatone can quite accurately state that thereserve fund problem has disappearedin a large percentage of condominiumcorporate governance.

So what problems remain? There aretwo acute problems facing condomini-ums, the solutions to which must beimmediately legislated.

The first problem, which is not the sub-ject of this article, is applicable to a sig-nificant minority of condominiums, andis that the quality of board membersand their governance ability and prac-tices that are disastrously insufficientto manage the millions of dollars inassets that they are tasked to govern.

The second problem which must beaddressed is that of the replacement and

‘…how would you like to live in a buildingwhere you have to fight for your right tohave a properly maintained exterior and

interior common element area?’


repair of the common elements. Thisproblem is somewhat related to the firstproblem, as the solutions suggested willsignificantly solve many of the issuescaused by inadequate governance byboard members. Too many condomini-ums fail to properly repair and replacethe common elements. Where this hasoccurred, it has often caused completehavoc and financial hardship to the cor-poration’s unit owners.

Most corporations repair and replacethe common elements properly, effi-ciently, and to the satisfaction of theunit owners and residents. However,the significant minority of condomini-um corporations do not properly repairand replace the common elements.Unit owners and residents are absolute-ly entitled to the proper care and upkeepof their common elements. The solu-tions suggested are for the protectionof unit owners’ rights.

In discussing this issue with some indi-viduals in the condominium industry,the reply has often been that if owners

are not happy with the maintenance oftheir common elements, they have“self-help remedies” under the legisla-tion. To this, I can reply “how wouldyou like to live in a building where youhave to fight for your right to have aproperly maintained exterior and interi-or common element area? If you had achoice, would you move into a buildingwhere you had to use self-help reme-dies or would you like to move into abuilding where the issue was automat-ically taken care of?” The answer isobvious. Self help is just not an optionthat is fair, and we all know it is anoption we would certainly not like tohave for ourselves.

The same question could have beenposed when we were all consideringamendments to the reserve fund legis-lation more than 10 years ago. It wouldbe unthinkable at the present time to goback to the previous reserve fund legis-lation and say to owners “if you don’tlike the amount of the reserve fund andyou think it is inadequately governed,you have self-help remedies”. That’s

understandable. So why are we notseizing the opportunity to do the samething with all of the condominiums incrisis that are failing in their gover-nance and repair of the common ele-ments? Sure, they may even have greatreserve funds in some cases, but theydon’t repair.

The principles that have been appliedin the suggested process are as follows:

a. Unit owners’ rights are central. Unitowners have a right to a constantlyand consistently maintained build-ing without ever having to utilizeself-help remedies;

b. Unit owners shall be informed of theReport Card evaluations and basicprocedures, in writing;

c. Little or no government involvementshall be utilized in the process. Theuse of courts, mediation and arbitra-tion, shall be kept to an absoluteminimum;

d. The process and procedure must beas simple as possible.


As the consistent and proper mainte-nance of a condominium corporationdoes not occur in a significant minori-ty of buildings, legislation must replacehope and goodwill to ensure propergovernance of the maintenance of com-mon elements.

It is being proposed by many that allboard members must meet some mini-mum educational requirement in thenew legislation. This is a favourableproposal indeed for many reasons, butit must be pointed out that further edu-cation of directors will not make anysignificant improvement to the problemof badly maintained buildings in

Ontario. More serious and mandatorylegislative requirements are needed.The following is a framework for theproposed changes.

Concept for the ProposedLegislation for MandatoryEvaluation of Financial andPhysical Building Managementof Condominium Corporations

The legislative proposal set out belowis the author’s own proposal and is not,at the present time, part of the CCI(Toronto)/ACMO Legislative Brief.

The proposal is as follows:

1. At the time that a corporation con-ducts its reserve fund study or anyupdates, which is a minimum ofevery three years, every corporationwill conduct an evaluation of thecondition of its financial well beingand its maintenance and repair status(The “Report Card”). The ReportCard will comprehensively evaluatetwo items: a. the overall financial health of the

corporation, enumerating sevento ten main categories and evalu-ating them and providing a finalscore; and

b. the manner in which the buildingis maintained (which in condo-minium language really isreplacement and repair of thecommon elements).

Such Report Cards will containinformation similar to studies andcondition reports that are used in thehotel industry. These reports will,naturally, be customized to condo-

‘It is being proposed by many that allboard members must meet some

minimum educational requirement in the new legislation.’


minium corporations and their needs. Each corporation’sevaluation will be based upon the quality of original con-struction of the building and common elements, takinginto consideration any present standards, of course. Thestandard of quality and maintenance will be based upon theoriginal construction of the building and may only beincreased by unit owners by special bylaw. The standardmay not be reduced by special bylaw, as this could forcea minority of owners to suffer a reduction in the standardof community that they bought into.

2. The Report Card will be prepared by an engineering firm(The “Report Card Engineers”). Whether or not the ReportCard Engineers can be the same firm as the corporation’sengineers is something which must be discussed. It seemsthat it would be better if the firms were not the same forthe sake of maintaining the independence of the ReportCard Engineers. The Report Card Engineers may performthe financial evaluation based upon the corporation’s mostrecent audit and any other information it deems appropri-ate. The Report Card Engineers may retain independentfinancial advice, if necessary, from the corporation’saccountant or any other accountant, at the corporation’scost.

3. Unit owners will elect the Report Card Engineers.Directors may not retain or discharge the Report CardEngineers. The reason for this is obvious and is based onthe same principles requiring the auditor to be elected,which is mostly to maintain independence from the board.

4. Upon receipt of the Report Card, the board of directorswill either pass or fail. A written notice of the partial orcomplete Report card will be sent to owners, such noticeto be sent simultaneously with the reserve fund notices toowners, required under the Condominium Act.

5. In the event of a pass, the corporation carries on as usual.Of course a pass may not be perfect and the evaluationwill contain comments on the items that require attention.This is to be expected.

6. In the event of a fail, the corporation will have a certainperiod of time, likely six months to a year, to obtain a fur-ther Report Card, with a pass. If the board of directorsfails to obtain a pass on this second Report Card, the entireboard is removed. It should be noted that the compulso-ry removal of the board is an essential element of theprocess. This is the element that takes away the need ofindividual unit owners to seek self-help remedies whentheir condominium corporation falls into a disastrous stateof repair. Without this provision requiring the removal ofthe board, the entire process has no effective meaning.

7. The second board will have a period of time to obtain apassing Report Card. If it succeeds, the board carries on.If it fails, the Report Card engineers will appoint an admin-


istrator and then the provisions ofthe Act pertaining to administratorswill apply. Alternatively, the legis-lation may require a court approvedadministrator, if this appears to be abetter solution. Either alternativewill work well.

General Comments

In the writer’s experience as counsel tocondominium corporations, the bestand smartest directors have a seriousdesire to be on the board because theyfeel that board members that they seecoming onto the board do not haveeither the skills or the political desire

to do what is needed to maintain thecondominium corporation. They don’tlike being on the board but are afraidto leave it to any new directors. Thislatter point of political desire is veryimportant because there are some veryhard decisions that must be made in thereplacement and repair of common ele-ments.

Some of the decisions required are dif-ficult to be made by board members, asthey live in the building in which theycause the “hardship” seen by many. Infact, most of the instances where build-ings have not been maintained arecaused by the fact that board membersare not willing to endure the very nastypolitics that often go along with main-taining a building properly. The pres-sure to avoid common expense increas-es is so high that many directors wouldrather avoid an increase at the expenseof the future well-being of the building,than to face their neighbours in an ele-vator or corridor to defend a healthycommon expense increase, or evenworse, a special assessment. The writer

has encountered well over one hundredinstances where directors have resignedbecause they could not survive the pol-itics and community repercussions of acommon expense increase.

In many other cases, the problem aris-es because the unit ownership know-ingly or unknowingly elects a boardthat is determined to never have a com-mon expense increase, forever.Thereafter the problems are the same:dirty common elements, failing sys-tems, worsening curb appeal, worsen-ing state of common elements, decreas-es in sale prices, but stable commonexpenses. Yet for many reasons, thepolitical will to improve remains

absent. After years of the failure toincrease common element fees proper-ly, repairs and special assessments areforced on the ownership due to workorders or an administrator’s appoint-ment. This lack of political will is com-pletely circumvented by a third partyassessment, and written notice provid-ed to owners, of the corporation’s finan-cial and maintenance practices.

From a subjective point of view, onemust consider that having a third partyassess one’s performance as a boarddoes two things. Firstly, it provides thecomfort and confirmation that you, as aboard member, are doing a proper joband takes that pressure and doubt away.Secondly if there are hard decisions tobe made, the third party assessmenttakes away the necessity of having tobe completely responsible to your ownneighbours for increasing commonexpenses.

The writer has discussed the idea witha number of developers, and they gen-erally favour the concept (but say they

are concerned about the details – to thisone may respond, if the hotel industrycan thrive with third party evaluations,so can we). Developers see the conceptnot only as a good model for ensuringthe proper maintenance of buildings butas a very good marketing concept. Abuilding that is legislated to maintain aproper level of repair and replacementis a more valuable building than onethat does not have such controls. This isa very significant point. With the pro-posed legislation, one can almost cate-gorically state that the building will beproperly maintained, regardless of pol-itics and political reluctance by direc-tors who have to put up with meetingtheir disgruntled neighbours in the ele-

vators and hallways.

There have also been comments in rela-tion to the proposal that complain aboutthe details and ambiguity in the detailsthat will be required by the profession-als providing the Report Card. To this,the response is that the same criticismwas made of the proposals to enact thepresent detailed reserve fund legisla-tion. The details can be worked out withsome effort, common sense and persist-ence.

Removal of a board that does not passa Report Card on the second attempt isessential. Remember that the ReportCard is not only based on the status ofrepair and replacement and mainte-nance of the property but is also basedon the financial health of the condo-minium corporation. This includescompliance with the reserve fund stud-ies, budget issues, deficits and generalfinancial management. The ReportCard, as mentioned, will consist ofevaluations of two main categories ofthe corporation - financial health and

‘Some of the decisions required are difficult to be made by board members, as they live in the building in which they cause

the “hardship” seen by many.’


maintenance and repair health. Thereason that this proposal is made isbecause there are just simply too manyissues that are being experienced bycondominium corporations in the wayof political strife, nasty board politics,proxy fraud,threats, special assess-ments, board turnovers, litigation, etc,all of which prevent or delay the prop-er care of a condominium corporation.One cannot imagine the misgovern-ment that occurs in some condomini-ums and the issue can no longer beignored. Owners and residents of con-dominium corporations should not haveto wait three to five to ten years, andeven 30 years in some cases, to havetheir corporations properly governed.

In my discussions with managers aboutthe proposed changes, the response hasbeen something similar to “please hurryand do this because it will create man-agement nirvana”, in the sense thatmanagers will no longer need to con-vince boards of their proper repair andmaintenance duties. In fact, managerswill actually be able to concentrate on

the real business of managing the con-dominium corporation instead of deal-ing with politics. Politics are eliminat-ed or reduced because if boards don’tget a passing Report Card, they simplydisappear. Hence, a board member thatwants to stay on as a board member togovern the condominium corporationmust not only do the job himself or her-self, but must gain consensus, as,remember, the entire board is removedif a passing Report Card is not obtainedwithin the time described.

As some of you are reading this, youmight think “well there are many goodboard members that might be thrownout with the bath water in such aremoval”. There is a solution for this.Board members can re-run at the spe-cial meeting that is created to elect anew board, but only a maximum of oneprevious board member may make it tothe new board, and he or she will makeit only if a certain percentage of votesis achieved in an election, which pre-cedes the election of the new board.For example, the legislation may say

that only one in five or one in three pre-vious board members will be able toobtain a seat on the new board, provid-ed that they obtain more than 50% ofthe votes cast at a meeting. However,it is important that no more than oneprevious board member make it on tothe new board.

Not every single detail of the requiredlegislation has been included in thisarticle, as that would be impractical todo in this format. This summary isintended to lay out the main ideas ofthe proposal and to point out most if itsbenefits.

Directors come and go. A condomini-um community must live with theresults of the combination of all thedecisions made by a board, good orbad. The proposed changes deal direct-ly with the “bad”, by putting some teethin the process and by informing ownersthroughout it. Owners have a right toexpect this legislation. ■


President’s Message Cont’d. from page 5

6/ We are working with the City ofToronto and The Toronto AtmosphericFund, to try and find simple, cost effec-tive ways of getting Electric Vehicles(EV) into condominiums. There aremany hurdles created by theCondominium Act, and the electricaldistribution grid that make this espe-cially difficult in the condominiumarena. This ongoing effort will help topave the way for the inevitable wave ofelectric vehicles that will hit our neigh-bourhoods in the next few years.

7/ We are working on a joint effort tomake workplace safety a priority inCondominiums. Condominiums em -ploy many thousands of people in theToronto area, and they all deserve towork in a safe workplace. Watch for anew electronic resource for all of thesafety needs of workplaces, and knowthat CCI has helped to make it possi-ble.

While there are many more notableaccomplishments, the constraints of thisarticle make it impossible to list themall. Rest assured that CCI is beingsought as a subject matter expert inevery facet of the Condominium world.

I would like to take this opportunity towelcome Brian Horlick as my replace-ment. Brian will take the reins andguide this chapter into 2013 andbeyond.

I would like to take this last opportuni-ty to thank everyone who has con-tributed to making these last two yearsso successful. The members of theBoard of Directors have been terrific instepping up and volunteering their time,their knowledge and their experiencein every challenge we have met. Thecommittee members have been able todo the hard work and made sure thatthe ideas that were first planted at the

Board level, were nourished and culti-vated to bring out the final products.The administrative staff has been sosupportive, and so professional in mak-ing this role seem so easy. They cannag with smiles on their faces, and thatmakes it all seem so much better! Mostof all, I would like to thank you, thereader, the member, the supporter.Without you, we would lack funding,we would lack passion, we would lackdirection and we would lack purpose.Thank you for believing in CCI andsupporting the effort year after year. Itis your commitment that is creating avibrant new condominium world. Ithas truly been my pleasure to serve asyour President.

Bill Thompson BA, RCM, ACCI, FCCIPresident, CCI Toronto & Area Chapter


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