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CondoChronicleI S S U E N O . 0 4 / W I N T E R 2 0 1 3
N E W S L E T T E R O F T H E C C I N E W F O U N D L A N D A N D L A B R A D O R C H A P T E R
EMPIRE VILLAGE - A SELF-MANAGEDCONDOMINIUMCORPORATION
PROTECT YOUR CONDO FROM WATER DAMAGE
RAPID GROWTH OFCONDOMINIUMDEVELOPMENT IN THE ST. JOHN’S AREA
CONDOMINIUM LIENENFORCEMENT – PAID IN FULL
EMPIRE VILLAGE - A SELF-MANAGEDCONDOMINIUMCORPORATION
PROTECT YOUR CONDO FROM WATER DAMAGE
RAPID GROWTH OFCONDOMINIUMDEVELOPMENT IN THE ST. JOHN’S AREA
CONDOMINIUM LIENENFORCEMENT – PAID IN FULL
CondoChronicle W I N T E R 2 0 1 3 2
Welcome to our latest edition of Condo Chronicle.
Congratulations to Empire Village Condominium Corporation for beingchosen as this edition’s Feature Condo. And, thank you to their President,Pearl Herbert and her Board for providing us with the information topresent the article.
We encourage our membership to contact us if you have an advertisementor an article you would like to submit for possible publication in ournewsletter. As well, we welcome our member Corporations to put forwardtheir names to be submitted as a future Feature Condo.
We wish a fond farewell to some very valued members of our Board,Heather Whiffen, our past Secretary/Director, Carol Adams, Director andPearl Herbert, Director. We wish them well and thank them for their serviceto our Board.
We welcome and are very grateful for the support of our newSecretary/Director, Ed Power and two new Directors Marylou Leeman andDavid Cummings.
On October 9th, we held a seminar on “Understanding your Reserve FundStudy – What to Expect”. We had a very good turnout of members and afew non members, all of whom were very interested in absorbing moreinformation on this popular topic.
Our Annual General Meeting was held on November 19th, 2012 and wasfollowed by a seminar titled “Question Period for Condominium Owners”and both events were very well attended. We take this opportunity to thankall participants of our seminars throughout the year, our guest speakers,panel members, moderators and everyone who attended.
Thank you all for your continued support of our Chapter.
Carol Burke, PresidentCCI Newfoundland and Labrador Chapter
CondoChronicleCANADIAN
CONDOMINIUMINSTITUTE
NEWFOUNDLAND AND LABRADOR CHAPTER
P.O. Box 23060, Churchill SquareSt. John’s, NL A1B 4J9
CHAPTER ADMINISTRATORCarol Burke
2012/2013BOARD OF DIRECTORS
PRESIDENTCarol Burke
Condominium Resident/Broker, Burke Realty
TREASURERKaren Hood
Certified Management Accountant, Grant Thornton LLP
SECRETARYEd Power
Real Estate Broker/DeveloperRockmount Realty
DIRECTORSGeoff Penney
Solicitor,Ottenheimer Baker
Marylou LeemanCondominium OwnerMartek Morgan [email protected]
David CummingsCondominium Resident/Board President
Bruce Mullett Real Estate Broker
Front Cover Photo:Empire Village Condominium
MESSAGE FROM THE BOARD OF DIRECTORSC A R O L B U R K E | P R E S I D E N T C C I N E W F O U N D L A N D A N D L A B R A D O R C H A P T E R
CondoChronicle W I N T E R 2 0 1 3 3
or a specific job such as looking after the flower gar-dens. There are two main social events each year. InJuly a barbeque, organized by the men, is held in thecentre court and in December there is a dinner at ahotel.
The president needs to be organized as the workrequired for carrying out the condominium businessneeds to be coordinated. To help with this there is aDirector’s Management Handbook containing informa-tion about the condominium and “job descriptions” forthe board members (president, vice president, treasur-er, secretary, director for property and director atlarge.) These are flexible guidelines composed frominformation provided by past directors on what they didwhen they were a director, to assist those being elect-ed to the board for the first time. There are also exam-ples of the forms used and the “Director’s Code ofEthics” (adapted from the CCI Code) that includes theneed for confidentiality. When there is time there areplans to write an Owner’s Handbook.
Empire Village is a 35 unit, 50 plus, self-managedbungalow condominium. These are two bedroom,one family bungalows, each with its own drive-
way. Built between 1996 and 2000, thirty-four units aresemi-detached and one is detached, and thirty-onehave large basements. They are situated on two privateroads and the City does not provide services. In thesummer visitors are impressed by the colourful displayof flowers growing on the grounds. There are flowerbeds as one enters Empire Village, the centre courtconsists of flower beds and grass, and owners are per-mitted to have ground based flower boxes for whichthey are responsible.
There is a Board of six elected directors. To self-man-age, it is important to have a cohesive Board ofDirectors as the work needs to be shared between theboard members. There are also other unit owners whohave expertise in specific areas, such as accountancy,engineering and gardening, who do not wish to be onthe board but are willing to volunteer for a committee
F E A T U R E C O N D O
EMPIRE VILLAGE - A SELF-MANAGEDCONDOMINIUM CORPORATION
C C I – N E W F O U N D L A N D A N D L A B R A D O R C H A P T E R
P E A R L H E R B E R T , A C O N D O M I N I U M O W N E R A N D P R E S I D E N T O F E M P I R E V I L L A G E
CondoChronicle W I N T E R 2 0 1 3 4
The president presides at all board and general meet-ings and is an ex-officio member of all committees.There is “errors and omission” insurance for the direc-tors. Knowledge of the Condominium Act including theregulations, and the Declaration and By-laws for EmpireVillage is needed. There are also other government actsand policies of which the president and the board, needto be aware, such as Workplace Health, Safety andCompensation Commission (WHSCC) and the need toobtain a “Certificate of Clearance” for each contractorwhen they commence a job, at intervals during thework until they finish the job. Empire Village does notemploy workers so does not have a payroll. By onlyemploying contractors who meet the WHSCC require-ments there are no assessment payments required byWHSCC.
The CCI NL seminars provide useful information fordirectors and owners of condominiums. Usually severalof the Empire Village owners attend these sessions.
The treasurer has the most work, receiving, recordingand paying bills, providing interim financial reports forthe board meetings, and preparing for the annual auditof Empire Village’s financial statements, as well as otherrequirements listed in the Condominium Act, Declarationand By-Laws. This is where the owner with accountancyexperience is a very valuable volunteer. As an exampleof good financial controls, the three directors with sign-ing privileges (each cheque needs two signatures) do nothave a key to the post office mail box. Empire Village hasno condominium office. A board member withoutcheque signing authority has the key to the mail box andreviews the monthly bank and investment statementsbefore giving them to the treasurer.
The treasurer chairs the Finance Committee composedof volunteers. Fortunately the unit owners of EmpireVillage are very prompt in providing their postdatedcheques when requested.
This year, the Declaration (dated 1996) and the By-laws(2001) were amended to be in accordance with theCondominium Act that came into effect December 1,2011. A standard unit is now described which will bevery helpful. In July 2012, a general meeting of the own-ers and Empire Village’s lawyer was held for the pur-pose of voting to accept these amendments. As an indi-cation of the interest Empire Village’s owners show intheir condominium, over 80% of them attended themeeting, and used the opportunity to ask questions andreceive information from the board and the lawyer. Theamended documents have been registered at theRegistry of Deeds and Companies and each owner hasreceived copies for their unit.
F E A T U R E C O N D O
At this time Empire Village is undergoing its firstrequired Reserve Fund Study. The board, especially thetreasurer, has been concerned that the condominiumfees might have to increase substantially in order tomeet the funding requirements as set out in the study.With the majority of unit owners being retirees on afixed income, the thought of any increase in the con-dominium fees causes stress but the security that willcome from knowing that money will be available whenmajor repairs and maintenance are required will allevi-ate some of the stress.
The director for property is an important board mem-ber in obtaining quotations for any work that is need-ed and supervising that all the work, including regularcontract work, is satisfactorily completed. Currentlythere are two board directors who are sharing the workas one of them goes south for 3 or 4 months in thewinter.
Being a 50 plus condominium has some challenges forattracting board members that condominiums of allage groups may not encounter. Some owners do notvolunteer to be nominated to the board as they goaway, down south, for 4 to 6 months of the year. Otherowners may not be physically or cognitively wellenough to be on a board or to take any responsibility.
Empire Village residents are largely the owners them-selves and they have developed the habit of lookingout for each other. The board is concerned too aboutthe wellbeing of all residents. For example, when anowner goes away for an extended period, the boardasks for information as to who has their door key andwhether or not somebody is regularly checking theirunit. (If the unit is not regularly checked and an inci-dent occurs, the owner’s insurance company may notcover any loss or damage).
Another concern is ensuring that all owners areinformed about the affairs of the condominium, includ-ing those who are unable to attend annual and gener-al meetings. The new Condominium Act does allow fora designate to be named but this becomes difficultwhen members living in the area are in the same agegroup and younger family members have moved to themainland.
Empire Village is a good place to live for those who donot want to live in an apartment or a town house. Itwill survive as a self-managed condominium as long asthere are owners, or their designates, who are cogni-tively and physically able and willing to volunteer onthe board and share the responsibility of managing amulti-million dollar complex. ■
CondoChronicle W I N T E R 2 0 1 3 5
_____________________________________________________________________________________________
CONDOMINIUM RESERVE FUND STUDIES INC.
300 Inglewood Drive PHIL WILLIAMS, CRP Fredericton, NB Certified Reserve Fund Planner E3B 2K6 Phone: 506- 454-3499 Phone: 506- 447-1511 E-mail: [email protected] Phil believes strongly in the long term value of Reserve Fund Studies. Once she has conducted the study and presented to you, she doesn’t walk away. She will be available on an ongoing basis to answer questions and support your efforts in protecting your investment. Phil has most recently expanded her practice to Newfoundland and looks forward to serving her existing clients here and she welcomes you to call her to discuss your Reserve Fund Study. _____________________________________________________________________________________________
Canadian Condominium Institute, Annual General Meeting, Heldin Toronto November 2, 2012. Pictured, the National ExecutiveCommittee, from left, President Jim McKenzie, Vice PresidentGeoff Penny, Director at Large Bill Thompson, Director at LargeStephen Cassidy, and Executive Director Diane Gaunt.
Educational Seminar held October 9, 2012 at the Capital Hotel,St. Johns, entitled “Understanding your Reserve Fund Study”.
The Atlantic Connection. Following the AGM held in Toronto, weattended a Gala Dinner/Awards Banquet celebrating CCI's 30thAnniversary. Representing the Atlantic Provinces, pictured fromleft are Chapter Presidents Carol Burke, Newfoundland andLabrador, Carol Conrad, Nova Scotia, and Phill Williams, NewBrunswick.
B I T S A N D B I T E S
CondoChronicle W I N T E R 2 0 1 3 6
Based on in-depth discussions with customers andbrokers, we know that some of the most commonquestions condo owners have are about water dam-
age. So this guide has been developed for condo buyersor owners, with useful information, tips and importantquestions for a better understanding of the subject.
Before you buy…It’s important for you to understand how much protectionyou have under your condo corporation’s insurance policyand your own policy. Here are some questions you can askyour real estate salesperson, lawyer or property manager:
• What does the corporation’s insurance cover and, moreimportantly, what does it not cover?
• Does the corporation’s policy cover just the structureand common areas of your building or complex, ormore? (e.g. damage to your unit’s walls)
• If there is major damage to your building, is it possiblethat you would have to make an additional contributionto cover the deductible of the condo corporation’s insur-ance policy?
• What is the deductible in the corporation’s insurancepolicy?
PROTECT YOUR CONDO FROM WATER DAMAGEB Y K E I T H L . H O W S E , V . P . O P E R A T I O N S , S T E E R S I N S U R A N C E
CONDO LIVING IS THE IDEAL WAY FOR MANYCANADIANS TO OWN A HOME – WHETHER
YOU’RE A FIRST-TIME HOMEBUYER OR LOOKING TO DOWNSIZE.
PROTECT YOUR CONDO FROM WATER DAMAGEB Y K E I T H L . H O W S E , V . P . O P E R A T I O N S , S T E E R S I N S U R A N C E
CondoChronicle W I N T E R 2 0 1 3 7
• Are you responsible for the full cost of repairing damageto another unit or for the full deductible on the corpora-tion’s policy if, for instance, your dishwasher leaked oryour bathtub overflowed and ruined the ceiling and con-tents of the condo below?
• How is a “standard unit” defined by your condo corpora-tion? Does it cover things like fixtures, ceilings and floors?
Once you’ve moved in…• In most cases, you are responsible for insuring anyimprovements within your unit, as well as contents such asfurniture, clothes and electronics.• In the event of a water leak in the building, who is thecondo contact person and what phone number should youcall? You may also want to ask your condo board proactivequestions which can help everyone in the building to betterhandle water damage related issues, such as:
1. Has an emergency plan been prepared?
2. Would it be worthwhile to do a risk management assess-ment for the building or complex?
3. Does the building’s management routinely inform all on-call staff regarding the location(s) of the main watershut-off(s)?
Water damage prevention checklist• Contact a professional when your plumbing needs repairor replacement.
• Avoid distractions to prevent water overflows.
• Make sure your washing machine is shut off when not in
use and check that your washer’s discharge hose is fastenedfirmly in place.
• Don’t turn on your dishwasher and leave your unit whileit is still running.
• Garbage can clog your toilets, so be sure you never dis-pose of waste such as kitty litter or grease in them.
• Drop some food colouring into the toilet tank to check forleaks – if the colouring appears in the bowl, there’s a leak.
• Ensure the toilet is not running whenever you leave yourhome.
• Leave your key with your building security office or ask atrusted neighbour to check your home every few dayswhen you are away.
In the event of a water leak• When a leak or burst pipe occurs, quick response is essen-tial. Call the emergency phone number to inform your build-ing management team even if it’s 3:00 a.m., and have a pro-fessional contractor come in immediately.
• Fast and proper water removal can help minimize yourlosses and prevent mold.
• Do not touch electrical wires, appliances or devices.
• You will need an inventory list separating damagedproperty from undamaged property for filing a claim.
• Take photographs of your damaged property.
• Keep your receipts for any cleanup costs incurred (e.g.wet/dry vacuum rentals, cleaning supplies, etc). ■
CondoChronicle W I N T E R 2 0 1 3 8
The St. John’s area condo market is still consideredan early stage market that is developing rapidlywith new projects announced on a regular basis.
The increased condo construction activity since 2006,has been driven by demographic fundamentals andeconomic prosperity from the local oil industry. Thecondo market still represents less than five per cent oftotal MLS® sales and total new housing starts, withmore condos now being sold via MLS® in the St. John’sarea. Direct or exclusive sales were the preferred alter-native for condo developers in the past and their directmarketing programs were effective, but increaseddevelopment and competition has resulted in MLS®now being the preferred sales avenue.
Current condo market trends indicate that mid-priced($350,000 to $450,000) neighbourhood condos arepreferred by people who want to simplify their lives byeliminating external household chores and mainte-nance, while remaining connected to their existingmedical services, shopping patterns and neighbours, ifpossible. Seniors, baby boomers and single young pro-fessionals are the main demographic segments drivingcondo market growth throughout the St. John’s area.The aging population and general demographic trendswill have widespread implications on the type of futurehousehold formation and at present, condos representthe most underdeveloped market segment from thisperspective.
RAPID GROWTH OF CONDOMINIUMDEVELOPMENT IN THE ST. JOHN’S AREA
B Y C H R I S J A N E S , M B A S E N I O R M A R K E T A N A L Y S T
A T L A N T I C M A R K E T A N A L Y S I S C E N T R EC A N A D A M O R T G A G E A N D H O U S I N G C O R P O R A T I O N
Demand for condo living continues to be driven bypositive net-migration to the St. John’s area, increasedeconomic activity and employment, smaller house-holds, and to a large extent, the aging population. Mostindividuals within the 55 plus year old demographicprefer condo living because of their active lifestylesand their desire to simplify living. Many of them are“snow birds” who choose to reside in warmer climatesduring the winter months, particularly Florida, and pre-fer a condo for ease of seasonal use and security. Theother key demographic segment of the St, John’s areacondo market is the single young (under age 35) pro-fessional. They tend to be very busy establishing them-selves in their careers, have an active lifestyle and pre-fer the convenience that condos provide them.
Condos not only attract buyers who are new to condoownership, but also existing condo owners who are“moving-up” within the market as the development ofmore luxurious condo projects continues. In fact, theluxury segment ($450,000 plus) has performed verywell in the St. John’s city central core area and thistrend remains. Recent market trends will also continueto support existing basic condo MLS® resales in the$200,000 to $350,000 range and the $350,000 to$450,000 level for the mid-range existing and newconstruction condo market. This mid-range price pointis considered the “sweet spot” for the St. John’s areacondo market. In terms of condo prices, there is amindset among mortgage free homeowners in the 55plus year old demographic that they will only transitionfrom a single-detached house to a condo if they cansell their existing home for an amount equal to orgreater than the cost of a new or existing condo. Inother words, they will only justify such a move if theycan remain mortgage free. In fact, most people withinthis age group desire to make the transition with extracash in their pockets from the sale of their home. Withthe St. John’s area condo market continuing to expandin terms of supply, there are and will be more optionsfor buyers and the market should ultimately tilt in theirfavour as it matures. ■
CondoChronicle W I N T E R 2 0 1 3 9
in the Registry of Deeds. Sounds simple enough, howev-er the utility of such liens was a little short sited.
If the threat of the corporation having a lien over anowner’s unit was not sufficient to make him pay up(which it rarely was) then the corporation could exercisea power of sale of the unit and hope to collect thearrears from the proceeds. There was only one problem– the condominium corporation’s lien ranked behind anymortgage on the unit and any previously registeredcharge. This meant that even if the corporation pro-ceeded with a power of sale there may not be enoughequity to satisfy the lien after the mortgage and othercharges were paid. The corporation could quickly finditself at a “dead end” in following this process. In mostcases the lien would simply stay in place until the unitwas sold or refinanced, both of which required therelease of the lien. It was only at this point that someunit owners would finally pay the arrears in order tosecure the release. It would not be unusual to see manyyears go by since the date that the lien first arose.
Improved Enforcement with the newCondominium Act, 2009
The Condominium Act, 2009 effectively addresses theshortcomings of its predecessor. Under section 51, thenon payment of fees or assessments still gives rise to alien in favor of the corporation. In addition the Act clear-ly states that the corporation’s lien will include all inter-est owing and all reasonable legal costs and expensesincurred with respect to collection efforts. In order forthe lien to be effective as an encumbrance over the unit,it has to be properly registered in the Registry of Deeds.
So what happens if the owner does not pay the arrearseven after he is advised that a lien has been placed onhis unit? Well, the corporation now finds itself in a verystrong position. Under the new Act the corporation’s lienhas priority over any existing mortgage or charge (exceptfor a charge for property taxes). This means that if thecorporation were to initiate power of sale proceedings, itwould collect first.
Not only does the Act give the corporation lien priority,it also gives a bank or lending institution (the mort-gagee) the option of paying the amount of the lien to
All condominium unit owners must pay their shareof monthly common element fees and any assess-ments levied by the condominium corporation.
Collectively these fees fund and support the operationsof the corporation and the maintenance and repair of itscommon elements. In an efficient and well managed cor-poration fees are diligently collected by the corporationand payment by unit owners is closely monitored.However, there are inevitably cases where a unit ownerfalls into arrears of their monthly contributions. Despiterepeated attempts by the Board or the corporation’s man-ager, these arrears continue to go unpaid and accumu-late. All the while other unit owners subsidize the delin-quent owner’s use and enjoyment of the common ele-ments.
Fortunately there are steps that a corporation can taketo secure payment of outstanding fees and assessments.The new Condominium Act, 2009 gives condominiumcorporations increased ammunition to address condo-minium arrears. This article will discuss condominiumliens, how they are enforced and how banks and lendinginstitutions have become a very important ally to con-dominiums in the collection process.
The Former SystemUnder the previous and now repealed Condominium Act,the non payment of a share imposed on a unit owner forthe maintenance, repair and renewal of a common ele-ment or a sum that he is required to pay gave rise to alien against the interest of the owner. In order to enforcethe lien a document was prepared and then registered
CONDOMINIUM LIEN ENFORCEMENT – PAID IN FULLG E O F F P E N N E Y | O T T E N H E I M E R B A K E RB A R R I S T E R S A N D S O L I C I T O R S
CondoChronicle W I N T E R 2 0 1 3 1 0
the corporation and then adding that amount back tothe owner’s mortgage and charging additional interest.This is certainly a win-win situation for the corporationand the mortgagee. Of course this enforcement strategyis only applicable if there is a mortgage on the unit inquestion. This can be determined through a search at theRegistry of Deeds.
The Process in ActionIn practice, it was thought that it would take a little prod-ding and explanation to get banks and other institutionson side with the concept of paying condominium liens.After all it is a new concept for this Province. Howeverlien priority has been in place in condominium legisla-tion in other provinces for years. Since we are dealing inmost cases with national lenders, local bank branchescan be advised to consult with their mainland offices onquestions of policy and procedure.
In the writer’s professional experience, in cases where Ihave initiated this process to date, banks have been
quite receptive to this concept. Once advised that a lienhas been placed on a unit, banks are generally interest-ed in having these released to maintain their prioritycharge. They are therefore willing to pay out the liens.As a result sizeable condominium liens (one being sev-eral thousands of dollars) have been paid to the corpo-rations in question, including all legal fees and expens-es, incurred.
The Take AwayCondominium corporations should be familiar with thelien process offered by the new Condominium Act, 2009.Arrears should not simply be permitted to accumulate. Acorporation which permits this to happen or does noth-ing to collect arrears is not complying with its duties andobligations as set out in the Act and its declaration andbylaws. It is in the best interests of the entire corpora-tion that arrears are promptly collected so that expens-es can be paid and accounts are maintained. The newlien procedure goes a long way to assist corporations inensuring that any arrears and associated expenses arepaid in full. ■
How/from whom did you hear about CCI?:
� CONDOMINIUM CORPORATION MEMBERSHIP: Please complete all areas
Condominium No.: No. of Units: Registration Date:
Management Company: Contact Name:
Address: Suite #:
City: Province: Postal Code:
Phone: ( ) Fax: ( ) Email:
Condo Corporation Address: Suite #:
City: Province: Postal Code:
Phone: ( ) Fax: ( ) Email:
President :Name Address/Suite Email
Treasurer :Name Address/Suite Email
Director #3:Name Address/Suite Email
Please forward all correspondence to: � Management Company address � Condo Corporation addressAnnual Fee: � 1-10 Units: $100.00 � 11+ Units: $125.00
� PROFESSIONAL MEMBERSHIP
Name: Occupation:
Company:
Address: Suite #:
City: Province: Postal Code:
Phone: ( ) Fax: ( ) Email:
Annual Fee: � Professional Membership . . . . . $125.00
� SPONSOR/TRADE SERVICE SUPPLIER MEMBERSHIP
Company:
Name: Industry:
Address: Suite #:
City: Province: Postal Code:
Phone: ( ) Fax: ( ) Email:
Annual Fee: � Sponsor/Trade Membership . . . $125.00
� INDIVIDUAL CONDOMINIUM RESIDENT MEMBERSHIP
Name:
Address: Suite #:
City: Province: Postal Code:
Phone: ( ) Fax: ( ) Email:
Annual Fee: � Individual Membership . . . . . . . . $75.00
Cheques should be made payable to: Canadian Condominium Institute - Newfoundland & Labrador ChapterPO Box 23060, RPO Churchill Square, St. John's, NL A1B 4J9 • Email: [email protected]
MEMBERSHIP APPLICATIONM E M B E R S H I P TO J U N E 3 0 , 2 0 1 3
� Townhouse � Apartment Style� Other