summer 2015 condo contact -...

CONDOCONTACTS U M M E R 2 0 1 5

INSIDEPresident’s Message ....................4

Editors’ Message............................5

What To Do When Your Windows Reach the End of Their Useful Life? ......................7

TSSA’s Safety For Your BBQ Sizzles ..........................9

Condominium’s Role inManaging Water Damageand Mould ......................................10

Ask the Pros ..................................12

An Overview of the Proposed Changes to The Condo Act ............................13

CCI National News....................N-1

NEWS RELEASECanadian Condominium InstituteWelcomesBill 106 ..........................................17

Condominium Act Ammendments (First Reading) ..............................18

Reserve Fund Investing ..............23

Ottawa’s Real Estate Market: Condominiums as Investments ..25

Bulletin Board ..............................27

Advertising Corner ......................29

CREATING A VIBRANT, WELL-INFORMED OTTAWA AND AREA CONDOMINIUM COMMUNITY

Condominium’s Role inManaging Water Damage

and Mould

4 SPRING 2015 CONDOCONTACT

CONDOCONTACT

CANADIANCONDOMINIUMINSTITUTE

OTTAWA & AREA CHAPTER

P.O. Box 320011386 Richmond Road

Ottawa, OntarioK2B 1A1

Telephone: 1-866-491-6216Fax: 1-866-502-1670

E-mail: [email protected]: www.cci.ca/OttawaTwitter: @CCIinOttawa

Operations ManagerCarolyne Vigon

[email protected]: (866) 491-6216 x 124Fax: 1-866-502-1670

This publication attempts to provide the CCI Ot-tawa Chapter membership with information oncondominium issues. Authors are responsible fortheir expressed opinions and for the authenticityof all presented facts in articles. The CCI OttawaChapter does not necessarily endorse or approvestatements of fact or opinions made in this publi-cation and assumes no responsibility for these statements.

This publication also notifies members of the Ot-tawa Chapter of events and services. The productsand services advertised are not necessarily en-dorsed by the Ottawa Chapter. Readers shouldconduct their own review of the products andservices and seek legal and other professional ad-vice on the particular issues which concern them.

Permission to reprint is hereby granted provided:

1) Notice is given by phone 1-866-491-6216 and/or in writing to the CCIOttawa Chapter; and

2) Proper credit is given as follows: Reprintedfrom Condo Contact. Copyright by Ottawa Chapter of the CanadianCondominium Institute.

President ’s Message

In June of 2012, the Ontario government announced itsintent to review and revitalize the Condominium Act,1998 (the “Act”). After an extensive consultation process,and the production of a detailed report recommendingover 200 revisions to the Act, the proposed reforms to theAct passed first reading on May 27, 2015. The proposedrevisions include a sweeping reform of the Act, the intro-duction of new legislation governing licensing of man-agers, and changes to other legislation affecting

condo miniums (for example the Ontario New Home Warranty Plan Act). While there isalready some debate in the industry concerning some of the proposed revisions, there is noquestion that all stakeholders are excited about what will transpire in the coming months,and what further amendments may be order before the reform is complete.

To assist our condominium community in engaging in this dialogue and debate, we are in-cluding, in this edition, a summary of some of the key proposed revisions, prepared byJames Davidson. I look forward to hearing the various thoughts and comments of ourmembers with respect to what’s coming down the pipe!

In addition to all of the “reform excitement”, CCI Ottawa has had another busy Spring.The recent Director’s Course was, once again, sold out. In addition, the ACMO/CCITradeshow and Conference, held on May 29th, 2015, was a resounding success.

Having recently attended the National CCI Forum, I now fully appreciate the tremendousenergy of the Eastern Ontario condominium community. While other chapters across theCountry may sometimes struggle with attendance and participation at educational seminarsand events, our Chapter is fortunate to have a vibrant, interested and motivated condo-minium community. The success of our Chapter is due entirely to the participation of ourmembers, and I want to take this opportunity to thank all of our members and partners forthe time and energy which you devote to CCI.

Now that the “lazy days of summer” are here, be sure to take the time to renew your energy,but don’t forget to save your dates in September with the “Meet the Expert Panel” in Ottawaon September 16th at the Hellenic Centre and the second annual Kingston CCI/ACMOTradeshow and Conference and first mini directors course (September 11/12).

Wishing you a safe, healthy and happy Summer!

Nancy HoulePresident-CCI-Ottawa

CONDOCONTACT SPRING 2015 5

After years in the making, the province of Ontario finally released its much anticipated proposedamendments to the Condominium Act. This was done on May 27, 2015, when Bill 106 was in-troduced at Queen’s Park. If made into law, this Bill will introduce sweeping changes to the gov-ernance and management of condominiums in Ontario. As such, you will not be surprised thatwe have devoted a significant portion of this edition of our quarterly magazine to this topic. RodEscayola will present an exhaustive summary of some of the most important proposed changesand Jim Davidson offers a very useful chart comparing the current Act with the proposed changes.

But while Queens Park is busy working on tomorrow’s condominium industry, we were busyputting together a great selection of articles dealing with more immediate concerns. We have avery informative article presenting options on how to invest your Reserve Fund in these timesof historically low returns. The Q&A corner also deals with a question on Reserve Funds.

In our engineering corner, we propose a significant piece on water damage and mould. Bewareof what lurks behind your walls... And, as we have done in our last few editions, we propose a“case study”, where some of our local corporations share their successes and lessons learned inimportant projects. In fact, in this edition, two corporations compare notes on how they tackledtheir window problems.

Finally, in our safety corner, TSSA presents great tips to have a safe BBQ season. As you can see,we are offering a well-rounded and very meaty edition!

We invite, once again, any comments or suggestions you may have and invite you to submitquestions for our Q&A or stories for future publication. In particular, we want to hear yoursuccessful or challenging experiences. How have you tackled a problem or a project? Tell usabout it.

Don’t forget to follow us on LinkedIn (CCI Ottawa) and on Twitter (CCIinOttawa).

Happy summer everyone!

Tim Kennedy is V-P and General Counsel at MaxSys Staffing & Consulting.Rod Escayola is a partner with the law firm Gowlings in Ottawa.

Rod Escayola

Editor ’s Message

Contributing to CCI Condo ContactEditor’s Contact Information

A benefit of CCI membership is the opportunity to share perspectives with one another by contributing and reading articles in CCI-Ottawa’s quarterly newsletter Condo Contact.

If you are a condominium director, owner or manager, and have a unique tale to tell or advice to relay to other condominium boards, let us know! If you are a professional or represent a trade

company offering services or products to condominiums and have a relevant article, let us know!

The subject matter should be current, concise and helpful. Topics should relate to management and operation of condominiums and not be of a commercial nature.

ARTICLES MAY BE FORWARDED TO:

The Editor, Condo ContactCanadian Condominium Institute, Ottawa & Area Chapter

P.O. Box 32001, 1386 Richmond Road, Ottawa, ON K2B 1A1OR Email: [email protected]

Tim Kennedy


Feature Art ic le

What To Do When Your WindowsReach the End of Their Useful Life?Refurbishing vs. Replacing windows: the pros and cons of both alternatives

By Sean Cornish, Apollo Property Management

Changing the windows in a high-riseat the end of their useful life is adaunting project for any corpora-

tion. It can also be the single most expen-sive project for the corporation (possiblysecond only to re-cladding the building).Thankfully, there is more than one option.For instance, corporations can choose be-tween changing or refurbishing their exist-ing windows. Two very different projects,at very different costs, presenting differentbenefits and challenges.

Take for instance two sister-corporations inthe downtown core who both decided toaddress their failing windows in two verydifferent ways. Both towers were built inthe mid-seventies by the same builder. Onehas 27 residential floors and the other, 25.These two towers are two separate corpora-tions, managed by separate boards with dif-ferent priorities. One of the towers wentwith a full-blown replacement, the otherwith the refurbishing of the existing win-dows.

The window replacement project for TowerA was started before I took over manage-ment of the corporation. The Board pre-sented the owners with options foraddressing the windows and the owners ap-proved new windows to replace the originalones. The owners contributed additionalfunds to the reserve fund over a number ofyears through additional condominium feesand eventually through a special levy. The

decision was made to install the new win-dows over the existing frames to minimizethe construction needed.

The window replacement was more expen-sive and more intrusive for the owners andresidents. At the same time, with this proj-ect the owners were able to get the look ofnew windows as well as the benefit of im-proved performance as the new windowsincluded a thermal pane with solar coatingand argon gas. At the end of the day, theowners have more weather-tight windows,frost free glass and a nice finished look.

In Tower B, the owners chose to re-furbishthe existing windows to extend the life ofthe original windows. This decision waspartly based on cost. Many owners felt thatno work was required on the windows andthat it was too expensive and unnecessaryto replace them. By refurbishing, theymaintained the existing windows andframes so there was no outward sign ofchange once the project was complete.What they achieved was improved effi-ciency of the existing window system at alower cost and with far less disruption tothe residents.

The window replacement required approx-imately two to three days for the replace-ment itself with additional visits for followup inspections and addressing deficiencies.The owners’ units were exposed to the out-side when the windows were removed and

replaced. On the other hand, the refurbish-ment only required a half or a full day ofwork and none of the exterior windowswere removed so there was little to no ex-posure to the outside. It was much less in-trusive.

Both cases began with the involvement ofengineers. The boards engaged an engineerto evaluate the existing windows systemsand to present options for addressing theexisting challenges. At Tower A, the engi-neer that completed the evaluation was alsoresponsible for the project, from design andspecifications to monitoring the work, re-viewing for deficiencies and ensuring all ofthe work was completed to the requiredstandard. Prior to going to tender, theBoard had sample windows installed in twounits to evaluate the options. Through thetender process, the Board selected BassiConstruction with Manray Glass and Alu-minum.

The same engineer completed the evalua-tion at Tower B. Once the decision wasmade to proceed with refurbishment, theengineer was no longer involved – resultingin further savings. The Board of Directorslooked for a company that was able to dothe window refurbishment within the ex-pected budget. The board investigated anumber of companies in Ontario and inQuébec. Before they even took the deci-sion to refurbish the windows, they con-ducted a test installation in some units to


evaluate the options. Le Groupe Fenestracame in with the best price and the bestproposal to complete the work required.

The management of the projectThe Tower A project involved gainingaccess to 231 residential units on multipleoccasions:

• to measure the windows• pre-inspect to ensure the units were

prepared before the scheduled day ofwork

• completing the actual work over twoto three days

• follow up inspection by the engineerand property manager

• follow up visit to address deficiencies

In the Tower A project we ran into supplydelays from the manufacturer which signifi-cantly disrupted the work schedule andplanning. While we began the project witha predictable schedule, this changed oncethe manufacturing issues arose as we wereforced to adjust the schedule week to week.This was the single most disruptive aspectof the project and required a lot of addi-tional work from the engineer, contractorand management team and was a signifi-cant imposition on the owners and resi-dents, stretching their patience andgoodwill.

For Tower B, we were completing the workin 227 units and the work was significantlyless intrusive. It was still important that theowners and residents understood the workthat would be done and it was importantto secure their cooperation to prepare theirunit accordingly. In both cases, access tothe windows was required, which meantmoving furniture, dealing with windowcoverings, etc.

Le Groupe Fenestra had a lot of experiencewith these types of projects and provided uswith guidelines for the residents on whatwas required to prepare the units. Once theproject began we were able to establish afairly predictable schedule which allowed usto look ahead a number of weeks and adviseowners so they had ample time to prepare.Fenestra was accommodating and worked

very well with the superintendent and withthe residents and owners.

We were lucky to have superintendents ineach building who worked very well withthe contractors in terms of providing accessto units when required. In some cases wewere forced to rely on the superintendentsto prepare units where the owners or resi-dents had not prepared them in time.

Keeping owners informed is keyThere are many factors that impact the suc-cess of any project, but one of the key factorsis ensuring that everybody has a good un-derstanding of the scope of the project, thelikely impacts on the owners or resident andthe intended result. You need to temper ex-pectations and ensure that there is enoughinformation for owners and residents to un-derstand what is going to happen.

For example, in the case of the window re-placement project, the actual in-suite workended up being more intrusive than origi-nally intended and we were not able to ade-quately prepare the owners for the addedinconvenience. For the refurbishment proj-ect, the work was intended to deal specifi-cally with the air leakage through thewindows, and to improve the mechanicalmovement of the windows. It was importantto temper any expectation of owners and res-idents of possible improvements. Tower Bwas not getting shiny new windows. Theowners needed to be informed of what to ex-pect at the end of the project so they under-stood the limitations of the work.

In this case, you have two very similar tow-ers with two very different projects. One is

more costly than the others so the expecta-tions are different. In both cases the major-ity of the owners were satisfied with thework, and conditions were improved. Theimprovements for Tower A with new win-dows were more significant in terms of theimproved look, performance and in partic-ular the old issues of frost on the glass ofthe upper north side of the building is nolonger an issue. At Tower B, some ownersmay continue to see the presence of frost onsome glass but this particular issue was notmeant to be addressed by this project.

In terms of both projects, I would notchoose one option over the other. Both hadpositive results and both have something torecommend them. The choice of projectsdepends on the budget priorities of theCorporations, on the tolerance for disrup-tion and inconvenience and on the specificissues that need to be addressed.

In the end, both projects were successful inmy eyes. As a property manager, the refur-bishment project was a less complicatedand disruptive project and easier to man-age. As property managers advising boardson how to proceed, it is crucial that you un-derstand what options are available, the re-lated costs, expected results and limitations.

Sean Cornish is a Senior Property Managerand the General Operations Manager forApollo Property Management in Ottawa.Prior to landing in Ottawa in 2012, Sean wasa property manager, Regional Director andVice-President of a management company onthe west coast for ten years. He focuses on lux-ury high-rise residential condominiums. �

Did your corporation undertake any important projects recently? Do youhave a success story? Did you learn lessons the hard way?

Whether you are a director or a property manager, please do share these valuablestories. Feel free to contact me and I will assist you in writing your article.

By sharing your experiences we learn from the past and improve our collective future.

Rod Escayola, [email protected]


Feature Art ic le

TSSA’s Safety For Your BBQ Sizzles

Few things can match the fun andenjoyment of a barbecue withfamily and friends. Practice sen-

sible, safe barbecuing and yourspring/summer get-togethers will be asizzling success.

Season OpenerAt the start of the BBQ season, do thisthree-step safety check of your BBQ:

1. Clean: Use a pipe cleaner or wire toensure burner ports are free of rust,dirt, spider webs or other debris.

2. Check: Examine the hose leading fromthe tank to the burners. Replace ifcracked or damaged.

3. Test: Find leaks by applying a 50/50 so-lution of water and dish soap to propanecylinder connections and hoses. If bub-bles appear, tighten the connectionand/or replace the damaged parts andretest.

Light It RightTake these steps in the right order when ig-niting a BBQ:

1. Open the hood.

2. Turn gas release valve on tank.

3. Turn on grill controls or heat settings.

4. Take a step back.

5. Push the igniter button. If there is no ig-niter button, insert a long match orBBQ lighter through the side burnerhole first, then turn on the heat controlknob. If the burner does not ignite rightaway, turn the gas off and wait five min-utes, keeping the hood open, before re-peating the procedure.

Keep It SafeBarbecues are approved for outdoor useonly. They emit carbon monoxide, a poi-sonous gas that can lead to unconsciousnessand even death, which means never barbe-cue in a garage, tent or other enclosedspace. Propane cylinders must not be usedor stored inside any structure.

Do’s and Don’ts for Handling a BBQDO...Keep loose clothing away from a hot bar-becue.• Keep children and pets at a safe distance.• Turn gas valve off first when finished,

then turn off the burner controls, so nogas is left in the connecting hose.

• Allow the BBQ to cool completely be-fore closing the cover.

DO NOT...• Don’t leave the BBQ unattended when

in use.• Don’t allow grease to build up on the

burners or at the base of the barbecue,as this could cause a grease fire

• Don’t throw water on a grease fire – thiswill only spread the flame.

• Don’t position your barbecue too closeto wooden fences or walls. Make surethe area behind your BBQ is free ofcombustible material, since this is wherehot gases escape.

BBQ on the Balcony: Yes or NoNO, IF...• Prohibited by the governing documents

of your building• Prohibited by the building owner or

property manager of a rental property• If prohibited by the City where you are

located

YES, BUT ONLY IF...• The balcony is open (no enclosures or

walls have been erected)• A propane cylinder is transported in a

service elevator. When there are no serv-ice elevators, you may use the passengerelevator, but you must be alone.

• The cylinder is kept on the balcony andconnected to the BBQ.

• The BBQ is kept clear of combustiblematerial as listed on the BBQ’s ratingplate or in the certified instructions.

• The propane cylinder relief valve is atleast one metre horizontally from anybuilding opening below it, and threemetres from a building air intake.

These seasonal safety reminders are repro-duced with TSSA’s approval. The TechnicalStandards & Safety Authority is a not-for-profit, self-funded organization dedicatedto enhancing public safety. It delivers pub-lic safety services on behalf of the govern-ment of Ontario in the sectors of boilersand pressure vessels, elevating and amuse-ment devices, fuels and upholstered andstuffed articles. You can find more safetytips on www.safetyinfo.ca �


Condominium’s Role inManaging Water Damageand Mould By Matthew Laneville and Shawn Dohertyexp Services Inc.

It is the responsibility of the condo-minium corporation and its associatedboard members to maintain the up-

keep and manage the life expectancy of itscondominium complex. Maintaining thelife expectancy of the building evidentlyconsists of repairing building materials/fail-ures when needed but can also include pre-ventative measures to minimize futuredamages. Within this article, the focus willbe on the damages that cause mould whichcan then subsequently lead to poor air qual-ity within the building.

On-going building maintenance and un-derstanding the causes of mould is a key inpreventing moisture/water intrusion andeven significant water damage to a building.Therefore, the maintenance and repairs ofthe following, building components butnot limited to are a must for preventingwater intrusion: the roof membrane orshingles, eves trough, sealants around flash-ings and windows/doors, siding systems,exterior grading.

In addition to the commonly understoodwater leaks, water damage can also occurvia condensation. Condensation is formedwhen humid air comes in contact with acold surface. As such, exterior buildingcomponents with poor insulation, gaps ininsulation and cantilevered building com-ponents can result in colder surfaces and,over time, the creation of condensation.

The potential for water leaks or damage orcondensation in a building can be a signifi-cant concern depending on the materialsthe water comes in contact with. Whenwater comes in contact with the right ma-terials, there is the potential for the creationof mould and the start of air quality con-cerns in the building.

What is mould and why is it a problem?Moulds are microscopic fungi that are com-monly found in outdoor air and often in-doors, albeit typically in lesser quantities.Mould spores require the following threeparameters to be present in order forgrowth to occur:

1) moisture (water intrusion / conden-sation),

2) food source (often cellulose which ispresent within organic materials suchas drywall paper and wood); and

3) and a specific temperature range(varies from species to species).

Problems can arise when cellulose basedbuilding materials (the paper associatedwith drywall, wood, some ceiling tiles, car-peting, etc.) get wet as they become a per-fect growth medium for various mouldspecies. Moulds do not typically grow onnon-cellulose based materials (concrete,tile, plaster, etc.). However, if these materi-als are covered with dust / dirt, which in alllikelihood contains cellulose based material,they may offer a suitable growth medium.

Exposure to mould can become health con-cern, especially in individuals that fallwithin the definition of the vulnerable pop-ulation (individuals with suppressed im-mune systems, children, the elderly,asthmatic individuals, individuals withweakened respiratory systems, etc.). Symp-toms of exposure to moulds may includebut are not limited to nasal congestion, dif-ficulty breathing (wheezing), skin irrita-tion/rashes, allergic reactions, and in someindividuals mould infections may developwithin the lungs. Additionally, some speciesof mould are known to produce mycotox-ins which are a toxic byproduct of fungalmetabolism causing disease or in some caseseven death.

Understanding that health related effectsfrom mould stem from breathing in themould spores, air quality concerns frommould are higher when the mould spores ona surface are dry and become air bornthrough contact or air currents. As such, thevisual presence of mould is not always reflec-tive of elevated mould in the air or poor airquality. The key is to address the presenceof water damage and/or mould immediatelyto minimize the damage to more materialsand impacts to the air quality.

What to do if a wetting event occurs?Wetting events are defined as an eventwhere building materials are exposed towater/moisture and may occur for a variety

Feature Art ic le


of reasons including roof leaks, brokenpipes, and poor seals around tubs, win-dows, or even occupant activities within abuilding. Additionally wetting events mayoccur by less obvious means, for instanceindoor relative humidity above 60% cancreate condensation on cool surfaces whichmay promote mould growth.

The first task that should be undertakenduring a wetting event is to attempt to stopthe source of the water infiltration, if feasi-ble. It may not be easy to stop the watersource due to limiting factors such asweather, the inability to isolate mechani-cal/piping systems and detection of thesource may be difficult as water will oftenflow along the path of least resistance mean-ing that water damage may exhibit itselfsome distance away from the area of entry.Once an investigation of the water sourceis underway, it is recommended that an at-tempt be made to dry the building materi-als as soon as feasible since microbiologicalcontamination may occur in as little asthree (3) days following the wetting event,if conditions are suitable for mould growth.

In cases were the materials cannot be dried,it is recommended that the water damagedmaterials be removed prior to the occur-rence of mould growth. If the removals can-not be done in-house, emergency orrestoration contractors are well equipped toremove water damaged materials in a safemanner and identify mould / indicators ofmould during the removal program. Whenremoval of building materials are required,the age of the building must be taken intoconsideration and project specific testingfor asbestos within the building materialsmay also be required. The building ownerand/or restoration contractor can consultwithin an environmental professional tocollect any suspect asbestos-containing ma-terials and submit samples for rush analysis,as timing is of the essence to minimize thepotential for mould growth.

What to do if suspect mould contamina-tion is observed?Often, mould may not be visible as it maybe concealed behind a wall or building ma-

terials. A mould investigation may be per-formed if it is uncertain that mould is pres-ent in a building. Such an investigationmay consist of: 1) collecting moisture read-ings of building materials (to assess whethermoisture levels within a wall/ceiling/insu-lation are conducive to mould growth);and/or, 2) collect tape samples of surfacessuspected of containing mould; and/or, 3)the collection of air samples to assess theconcentrations of mould spores in the airwithin the area of concern versus the out-side or known clean areas. An environmen-tal/mould professional can interpret theresults and assess whether mould levelswithin a building are a concern.

Mould Removal If mould contamination is observed / con-firmed, the source of the visible mouldshould be investigated (ie. water infiltra-tion, condensation etc.) and stopped priorto or during the mould removal stage andsubsequent repairs to prevent future mouldgrowth.

In Canada, the removal of mould contam-inated materials is not regulated, but thereare industry standards and guidelines in-cluding “Mould Guidelines for the CanadianConstruction Industry – Canadian Construc-tion Association” and “Mould AbatementGuidelines – Environmental AbatementCouncil of Ontario (EACO)” that have pro-vide guidance on removing mould contam-ination in a safe manner. Typically, mouldremoval/abatement falls under one of threecategories:

1) small scale (>1m2 of mould growth);2) medium scale (1-10m2 of mould

growth); or3) large scale (>10m2 of mould growth).

These levels of abatement are set in place toensure that proper procedures are followedduring the abatement process to preventmould spores from becoming readily air-borne and affecting areas outside of themould removal area. Additionally, theseprocedures are also designed to protect theworkers removing the mould contaminatedmaterials by stipulating the type of personalprotective equipment (PPE) while perform-

ing the work. It is recommended thatmould abatement be performed by an ex-perienced abatement contractor as theyhave the specialized equipment required toensure mould spores do not exit the workarea.

Often mould sampling is performed uponcompletion of a mould abatement to ensurethat mould growth has been removed,meaning the indoor mould spores are sim-ilar in quantity and variety when comparedto the outdoor air.

How to Prevent Mould GrowthA series of simple practices may be utilizedin order to prevent water damage incidentsand subsequent mould growth. These prac-tices range from:

• Inspecting of all seals and roofing mem-branes (on a regular basis) in order toidentify any potential areas where watermay be infiltrating or areas that may beprone to water infiltration.

• Isolating water services that may be ex-posed to low temperatures (i.e. exteriorhose bibs) as frozen pipes are commonand account for many wetting events.

• Monitoring the humidity of commonspaces as a simple and effective way toprevent mould growth by limiting theoccurrence of condensation.

• Updrading / improving the insulation inthe building envelope and/or attic forgarden homes to minimize cold surfaceswhich are prone to condensation.

• Replacing / repaired windows that havelost their seal and commonly showingcondensation.

• Educating tenants of various practices,including: the utilization of a bathroomfan when times of high humidly occur(bathing/shower); maintain reasonabletemperature in the units; allow air flowbetween furniture and exterior walls; re-port all water leaks in a timely mannerin order to prevent mould growth.

Mould is a commonly identified in indoorenvironments, but when proper proce-dures/practices are put in place, the poten-


tial for contamination is reduced. Bybeing proactive and ensuring thatsources of water intrusion / condensa-tion are repaired and maintained, thepotential for mould incidents and sub-sequent poor air quality is greatly re-duced.

Matthew Laneville is an EnvironmentalScientist with 8 years experience in the en-vironmental consulting industry. His workexperience includes: conducting large-scale,complex Hazardous Materials BuildingSurveys, indoor air quality investigations,HAZMAT abatements/mitigation (as-bestos, mould, and lead), potablewater testing, and industrial hygiene sam-pling.

Shawn Doherty, P.Eng. is an environmen-tal engineer with over 14 years experience.He is currently the group leader of theHazardous Materials Group within theEarth and Environment Division withinthe Ottawa office of Exp Services Inc. Mr.Doherty has acted as the project managerfor several Designated Substance Surveysand asbestos abatement programs for sev-eral hospitals, schools and condominiumsin the area. �

Ask the Pros

Ask the Pros

A: Section 115 of the Act defines theeligible securities a condominium corporationcan invest its operating and reserve funds inas a bond, debenture, guaranteed investmentcertificate, deposit receipt, deposit note,certificate of deposit, term deposit or similarinstrument that is:

1. Issued or guaranteed by the Govern-ment of Canada or any province ofCanada

2. Insured by the Canada Deposit Insur-ance Corporation

3. Are securities of a prescribed class (cur-rently there are no securities of a pre-scribed class).

It’s important to note that bankers’ acceptancesand money market mutual funds are not con-sidered eligible investments. In addition, thecondominium corporation’s operating (or gen-eral fund) investments must be cashablewithin 90 days of request.

Question answered by April Wheeler, aSenior Manager at McCay Duff

Q: What eligible investments can a condominium corporationinvest in?

A D V E R T I S I N G R AT E S

Don’t miss out on promoting your company to the members ofthe CCI-Ottawa Chapter. Advertising rates for the quarterly

newsletter are as low as $80 for a business card ad.

The Newsletter Advertising Rate Sheet may be found onthe our website at

www.cci-ottawa.ca


An Overview of the ProposedChanges to The Condo ActBy Rod Escayola

Condominium Act

After years in the making, theprovince of Ontario finally releasedits much anticipated proposed

amendments to the Condominium Act. Thiswas done on May 27, 2015, when Bill 106was introduced at Queen’s Park. This Bill,which is not law yet, is formally titled “AnAct to amend the Condominium Act, 1998,to enact the Condominium ManagementServices Act, 2015 and to amend other actswith respect to condominiums”.

As indicated in its long title, this Bill, ifpassed, will serve to amend our 15 year oldCondominium Act as well as other legisla-tion pertaining to condominiums in On-tario. For instance, Bill 106 would amendcertain portions of the Ontario BuildingCode and of the Ontario New Home War-ranties Plan Act. Most importantly, this Billwould also result in the adoption of a newpiece of legislation which would regulatecondominium management.

Bill 106 is a lengthy piece of legislation ofapproximately 160 pages. It introducessweeping changes to the governance andmanagement of condominiums in Ontario.As such, it is difficult to ‘summarize’ it. Forthis reason, we propose focusing on some ofits highlights, which we believe may be ofinterest to our readership. It is important tokeep in mind that this article is based on theproposed changes, as they currently stand.The final version of the Bill may differ fromwhat has been introduced last month.

A New Condominium Authority andTribunalIf Bill 106 is adopted in its present form,

the province would create a not-for-profitand self-financed Condominium Authority.The exact mandate and functions of thisAuthority have yet to be developed throughthe adoption of regulation, but already, wecan expect that this Authority would:

• Provide information and resources tocondominium owners and corporations;

• Oversee mandatory training for all con-dominium directors;

• Oversee the administration of a newCondominium Tribunal (more on thisbelow).

Bill 106 would also see to the creation of aCondominium Authority Tribunal. ThisTribunal would have jurisdiction to adjudi-cate many of the disputes between corpo-rations, owners, occupiers and mortgagees.The precise mandate and authority of theTribunal have yet to be fleshed out in regu-lation to be adopted by the province. Still,we know already that the Tribunal wouldhave the following powers:

• The power to refer disputes to an alter-native dispute resolution process (suchas mediation, for instance);

• The power to order compliance with theCondominium Act or the corporation’sgoverning documents;

• The power to order a party to pay dam-ages as a result of an act of non-compli-ance, but only up to $25,000. Inpassing we note that $25,000 ispresently the upper limit of the jurisdic-tion of Small Claims Court;

• The power to order a party to pay legalcosts;

• The power to impose a penalty of up to$5,000 to a corporation who has refusedwithout valid reason to allow a person toexamine corporate records. The exactamount of the penalty is expected to beset by regulation. Presently, this penaltyis limited to $500 only;

• Tremendous power to direct whateverother reliefs the Tribunal considers fairin the circumstances;

• If the Tribunal orders an owner to makea payment to the corporation, this pay-ment could be added to this owner’scommon expenses. Similarly, if the Tri-bunal orders the corporation to make apayment to the owner, the owner wouldbe able to set this payment off against hiscommon expenses – meaning that theowner could deduct from his condo feeswhatever the corporation owes him orher. It is to be noted that the proposedAct would provide owners with thepower to claim back from corporationsactual costs when they are awarded costsor damages in a compliance matter,which is similar to the power corpora-tions presently have against ownerswhen they obtain compliance.

It is interesting to note this new Condo-minium Authority and new Tribunal are re-quired to be self-financed. Some of thefinancing is expected to be generated by theusers who would be required to pay certainfees. The details of how these new entitieswould be financed have yet to be hashedout through regulation. The Condo-minium Authority is also expected to beable to levy fees from all condominium


owners. A number that seems to be float-ing around is the suggestion that condo-minium owners would pay $1 per unit, permonth to finance this Authority. Assumingthat there are 700,000 condominium unitsin Ontario, this would generate approxi-mately $8.4 Million dollars. Just as a pointof comparison, the budget for the Landlordand Tenant Board exceeds $30 Million dol-lars… We may have a far way to go.

Corporations’ Reporting ObligationsUnder the amended Act, Corporationswould be required to file annual returns withthe Condominium Registrar. The exactcontent of what would be required to be in-cluded in these reports has yet to be fixed byregulation. Presumably, this report could(and likely would) include informationabout the corporation, such as its address ofservice, the number of units and other sim-ilar relevant information. We also know al-ready that corporations would have to reportany changes to the composition of the boardof directors, whether as a result of election,removal, resignation or vacancy. The recordswould be accessible to the public.

While this kind of reporting would be newto the condominium industry, similar re-porting obligations already exist for for-profit corporations at the provincial andfederal level.

Director’s Qualifications and DisclosureObligationsThe basic qualifications required to be acondominium director do not appear tohave changed. Condo directors would stillbe required to be individuals (as opposed tocorporations), be at least eighteen years ofage, be capable within the meaning of theSubstitute Decisions Act and not be anundischarged bankrupt.

However Bill 106 proposes to imposemandatory training on all condominiumdirectors. It is not clear at this stage whattraining would be required, who wouldprovide such training and how frequentlysuch training would have to take place. Itis not clear either whether individuals whohave already attended CCI’s directors’

course would be exempt from this require-ment.

Finally, directors would be required to pro-ceed with a certain level of disclosure. Wewill have to wait for the adoption of regu-lations to know exactly what directors willbe required to disclose. We know alreadythat directors would need to disclose theiraddress to the corporation. As for any otherdisclosure obligations, we can speculate thatdirectors may be required to disclosure anyconflict of interests, whether they are en-gaged in litigation with the corporation andperhaps even whether they have a criminalrecord. At this stage, however, this is purespeculation. We will have to wait and see.

While additional training and transparencyis a good thing, one must wonder if suchadditional requirements may dissuade cer-tain individuals from serving on condo-minium boards. This would be unfortunateconsidering how difficult it already is toconvince owners to get involved.

Budgetary disclosureIt is interesting to note that Bill 106 pro-poses to add an entire section on corpora-tions’ budgets.

If the amendments are passed, corporations’budgets would continue to be adopted byboards and not be subject to a vote by theowners. However, boards would have toadopt their budget at least 30 days beforethe end of the corporation’s fiscal year andwould have to circulate it to the ownerswithin 15 days of its adoption. More im-portantly, boards would not be allowed toimplement their budget until it has beencirculated to owners. In the even the boardwas to amend the budget, it would alsohave to provide notice of such amendmentsto owners.

It is interesting to note that corporationswould not be allowed to go over budget oncertain expenses (which have yet to be iden-tified by regulation) unless notice is pro-vided to owners. It is also interesting tonote that Bill 106 proposes to require spe-cific procurement processes when the cor-poration contemplates entering in certain

contracts or arrangements. The kind ofcontracts requiring a more stringent pro-curement process and the kind of processto be followed has yet to be defined by reg-ulation.

Reserve fundsBill 106 proposes various amendments per-taining to reserve funds. Unfortunately, wewill have to wait for the adoption of regu-lation to fully understand what changes, ifany, are being made to reserve funds. Wesee already that regulation may define whatadditional purposes the reserve fund can beused for and to see what could constitute“major repairs” for which the reserve fundcan also be used.

Also, the concept of what is “adequate”funding to the reserve fund could be furtherdefined by regulation. Presently, the currentAct provides that the contributions to the re-serve fund have to be adequate to providefor the expected costs of major repairs andreplacement of common elements. We canexpect further clarifications as to what wouldconstitute adequate funding.

Bill 106 also introduces the concept of a“Reserve Fund Study Providers”. It is un-clear as to who exactly such a person wouldbe and what would be his/her qualificationsas these will be set by regulations. For thetime being, the only clue we have is thatsuch a person would be required to meetthe prescribed requirement for the purposeof conducting a reserve fund study.Presently, the reserve fund study must beprovided by an accredited or certified ap-praiser, architect, engineer, certified reserveplanner, quantity surveyors, amongst other,all of whom must not have any affiliationwith the board or with the corporation.

The proposed amendments would add theReserve Fund Study Providers to the list ofprofessionals on which directors can reason-ably rely to benefit from the statutory pro-tection found at section 37 of theCondominium Act.

AGMsBill 106 would make it mandatory for cor-porations to provide owners with an ad-


vance notice, 35 days before the AGMs.This advance notice would be followed bythe regular 15-days notice.

Presently, a corporation does not have togive an advance notice of its AGM. All ithas to do is give its owners a 15-day noticebefore the AGM. Without an advance no-tice, some owners felt that they are notgiven an opportunity to put their name for-ward for election in time to have their nameincluded in the AGM package and on theproxies. In order to allow owners a fairchance to put their name forward for elec-tion before the AGM package goes out,many corporations already got into thehabit of providing owners with advancednotices. Bill 106 will make this processmandatory.

Bill 106 also proposes important changesto the level of quorum required at AGMs.The standard quorum required for anAGM to proceed will be fixed at 25% ofthe owners. However, in the event quorumhas not been reached on the first two at-tempts, quorum would then be reduced to15% on the third and on any subsequentattempts to hold the AGM. While thisquorum seems low, keep in mind that,under the present legislation, 15% of theowners are already sufficient to requisitiona meeting of the owners. This reduced quo-rum would allow for corporations to holdtheir AGM even though they are unable toachieve a 25% quorum.

Bill 106 would also allow for electronic ortelephonic voting at owners meeting. Suchvoting could be made with the assistance oftechnological means such as telephone calls,emails, faxes, automated touch-tone sys-tems or computer systems.

The introduction of this kind of technologywill also facilitate the holding of boardmeetings, allowing them to proceed by wayof teleconferences (even without a by-lawas is required presently) provided that all di-rectors consent.

Special Owners Meetings As it presently stands, owners can requisi-tion an owners’ meeting provided that they

get 15% of the owners to sign a requisitionin support of such a request. If the corpo-ration receives such a requisition, it mustcall and hold a meeting within 35 days (or,if the requisitionists consent, the meetingcan be held at the next AGM). Presently,boards do not have to acknowledge receiptof a requisition. All that boards have to dois send a notice of the meeting 15 days be-fore the meeting. This often means that therequisitionists hear nothing for the 20 daysfollowing the communication of their req-uisition. They are left to guess whether thecorporation will call a meeting or not and,if so, when. This is often the source of stressand frustration.

There are significant changes to this processunder Bill 106.

Under the proposed legislation, the boardwould have up to 50 days to call and holda requisitioned meeting (up from 35 days).It may appear odd, at first glance, that theproposed legislation provides for such anextension of the time to call a requisitionedmeeting. This is because Bill 106 intro-duces numerous interim steps between thecommunication of the requisition and thecalling of the meeting. These steps areaimed at improving communication be-tween the requisitionists and the board andat streamlining the process.

Under the proposed changes, the corpora-tion would have 10 days to respond to therequisitionists. In this response, the corpo-ration would have to advise whether it in-tends on calling the requisitioned meetingor not. If the corporation does not intendon calling the meeting, it would have to ad-vise of the reasons for this refusal. Requisi-tionists would then have 10 days to correcttheir requisition and submit it again to thecorporation or they would have 20 days tobring the corporation’s refusal to hold themeeting to the Condominium Tribunal (orto the Court of Justice if the CondominiumTribunal has not been set up yet). If the req-uisitionists do not modify their requisitionor do not bring the matter to adjudication,they would be deemed to have withdrawntheir requisition and the board would nothave to call the owners’ meeting.

It is interesting to note that requisitionistswould also be able to withdraw their requi-sition, although the conditions and timingof such withdrawal are not entirely clear asof yet. For instance, could the requisition-ists withdraw their requisition after the no-tice of meeting has been sent to the otherowners?

Corporate recordsThe proposed modifications clarify andprovide a more complete list of what con-stitutes a record of the corporation. It alsoallows corporations to keep their records onpaper or electronically. Finally, it would in-dicate the length of time during which cor-porations must retain records, although thedetails of this have yet to be clarifiedthrough the adoption of regulation. Whatwe know for now is that financial recordswould have to be kept for at least six yearfollowing the end of the fiscal year.

Proxies would no longer be treated differ-ently from other corporate records.Presently, under the current Act, proxies(but not voting ballots) must be kept for aperiod of 90 days. Under the new act, boththe proxies and the voting ballots wouldform part of the corporate records. We willhave to wait for regulation before knowinghow long they have to be kept for.

The process by which an owner can accessand get copies of corporate records appearsto also be slightly simplified. An overlytechnical approach under the current Actappeared to impose on owners the obliga-tion to first inspect the documents prior torequesting a copy of same. It is interestingto note that the penalty for a corporationwho refuses to grant access to its recordswithout a reasonable excuse may jumpfrom $500 to (up to) $5,000. The fees acorporation could charge an owner to ex-amine or obtain copies of the corporation’srecord would also likely be set by theprovince – and potentially not by the cor-poration anymore.

The exceptions to an owner’s right to accessrecords remain similar to those presentunder the current legislation. Under thecurrent Act, an owner cannot access records


relating to employee of the corporation,records pertaining to actual or pending lit-igation or insurance investigation or recordrelating to other owners.

Repair and maintenance obligationsOne of the most important proposedchanges to the legislation, in my view, isthat the responsibility to repair a unit afterdamage will no longer fall to the corpora-tion (unless the declaration provides other-wise). The responsibility and the cost ofrepairing units after damage would beshifted back onto each owner.

In my view, this is a welcomed change,which will simplify greatly many mattersincluding issues surrounding insurance.Unfortunately, the proposed Act does notappear to make this change retroactive.This may be a problem as many corpora-tions have had their declaration draftedunder the current (or prior) legislation. Forthis reason, many of the existing declara-tions impose on corporations the obligationto repair a unit after damage.

At the time of incorporation, this languagewas simply reflecting the legislation inplace. By not making the propose changeretroactive, many existing corporation maystill be responsible to repair units after dam-age simply because their “old” declarationsays so. Corporations may not be able tobenefit from this proposed change to thelegislation as amending declarations is avery difficult and costly undertaking. Itwould have been preferable, in my view, toforce all corporations into this new regimeunless corporations chose to opt out of itafter the passing of the new Act.

Another potential disappointment, at leastfor me, has to do with how Bill 106 ad-dresses the problems associated with corpo-rations making changes to commonelements. Indeed, there has been muchfrustration and litigation over dispute per-taining to corporation’s extensive mainte-nance and repairs of common elements.Moreover, the definition of what consti-tutes a “substantial change” to common el-ement remains unchanged and remainsdefined on the basis of cost alone. This, in

my view, does not sufficiently protect own-ers from changes unilaterally imposed bycorporations under the guise that they arestrictly proceeding with required “mainte-nance or repairs”. There are many examplesof disputes resulting from corporationsmaking significant changes to the look andfeel of common elements when changingdecks, refurbishing elevators or working onthe landscape. When does “require mainte-nance” amount to a significant change?The proposed Act does not appear to haveaddressed this.

Below is a quick and basic summary of thelevel of consultation which would be re-quired under Bill 106 by corporations fac-ing work on common elements:

• Any “required repair or maintenance”using material which is reasonably closein quality (not look and feel) as the orig-inal as is appropriate in accordance withcurrent construction standards wouldnot require any form of consultation ofthe owners. This has not changed fromthe current Act;

• Any work required to ensure the safetyor security of persons or to prevent im-minent damage to property or assetswould not require any consultation ei-ther. This too has not changed;

• Any work which is estimated to costs lessthan $30,000 or 3% of the annual bud-geted common expenses would not re-quire consultation, provided that owners,on an objective basis, would not regard themodification as causing a material reduc-tion or elimination of their use or enjoy-ment of the element being work on.

Bill 106 therefore proposes to raise sig-nificantly the financial threshold atwhich notice is required to be given toowners. It currently stands at $1,000and 1% of the budget. More impor-tantly, notice will have to be given toowners if the proposed work may be per-ceived as materially impacting the own-ers’ enjoyment of the common elements.This is a welcomed change. Still, whennotice is given to owners, it will be upto the owners to call an owner’s meeting.When/if such a meeting is called, sup-

port of 50% of the owners would be suf-ficient for the changes to take place un-less the proposed change constitutes asubstantial change;

• Any changes to common elements cost-ing more than 10% of the annualbudget will continue to constitute a sub-stantial change, requiring the approvalof 2/3 of the owners. This remains un-changed from the current version of theAct. In my view, the concept of whatconstitute a substantial change cannotbe limited to a budgetary consideration.The concept of continued enjoyment ofthe existing facilities should have some-how been imported as a consideration inthe determination of what constitutes asubstantial change.

Proposed changes to the management ofcondominiums

Finally, Bill 106 proposes the adoption of abrand new piece of legislation: the Condo-minium Services Act, 2015.

The Act would also provide for the creationof a not-for-profit Administrative Authorityoverseeing property managers and imple-menting a complaints mechanism. The newAct could also see the setting up of a disci-plinary committee to investigate and re-spond to complaints made against/aboutmanagers. The Authority would havetremendous investigatory powers andwould be able to fine property managers. Incases involving protection of the clients, theregulatory entity could freeze assets of man-agers, former managers and (thank good-ness) manager-wanna-bes.

This authority could also adopt a code ofethic applicable to all managers.

Unfortunately, it appears that the proposedCondominium Authority Tribunal has notbeen granted jurisdiction to rule over dis-pute between corporations and propertymanagers. If the province is planning oncreating such a specialized tribunal, it mayhave made sense to also grant it authorityto rule over these kinds of disputes.

Continued on page 17

THE NEWSLETTER OF THE CANADIAN CONDOMINIUM INSTITUTE/INSTITUT CANADIEN DES CONDOMINIUMS

National Newsy o u r c o n d oc o n n e c t i o n

Page NN-1

Summer 2015

As I am just returning from the Windsor Leader’sForum, I am feeling exhausted yet refreshed, ac-complished yet insignificant, and enlightened yetconfused. There was so much good informationflowing every second that no one person couldpossibly have absorbed all the wisdom, the lead-ership and the support that flowed-freely frommember to member! The forum started with a fewformal, interactive sessions wherein some of ourthought leaders shared their successes and chal-lenges in running their Chapter activities.

Andrew Fulcher, from South Alberta Chapter,shared some pearls of wisdom about how theirchapter revitalized their seminar program bybringing in speakers from across the various otherchapters to “freshen-up” their events. This changein perspective led to increased attendance at theirLunch and Learn seminars, and attracted new par-ticipants that had not been involved in the past.Speakers like Murray Johnson from Toronto andArea Chapter, and Jim Davidson of the OttawaChapter gave their time to help his Chapter achievenew successes in their seminars.

Doug Shanks, from Northwestern Ontario Chapter,reiterated the thoughts of Andrew and demon-strated the added benefit of the National supportby helping to get two guest speakers to Thunder Bayfor their members later in the day during his pres-entation. Armand Conant, from Toronto & Area

Message from the PresidentBY BILL THOMPSON, BA, RCM, ACCI, FCCICCI NATIONAL PRESIDENT

Chapter, and Jim Davidson both travelled there andpresented on various legal matters which helpedthe Chapter reach a new and renewed audience.Doug described the process as having relieved theChapter members of “speaker fatigue”, while addinga higher public profile to the local chapter and somuch so that the local media covered the events.

Theresa Girardin, the Membership Chair of theirLondon & Area Chapter, shared the challenges ofa retaining membership. Some of the jewels ofwisdom that she was able to share included per-sonally calling members who had not renewedtheir membership during the previous member-ship cycle. Many of those members were eager torejoin as they did not intentionally let their mem-bership lapse, but may have changed Manage-ment or had other challenges that simply did notlet them renew. She also suggested that PropertyManagers might be willing to distribute the mem-bership forms to their clients, or even put theminto new sale packages.

Paul Saum, Membership Chair from SouthSaskatchewan Chapter, wowed the crowd with thevast effort that he had put in to personally delivermembership forms to hundreds of condominiumswithin his area, and track their returns. This grassroots, hands on, personal sales approach gave theirchapter the largest percentage growth of all chap-ters this year. Paul was honest enough to admitthough that he was part of “Geezers’ Incorporated”and that he and Gerry Cairns, both being retired,had found a new purpose which helped themavoid the “morning mall walks” and the “afternooncouch surfing competitions”! His humorous pres-entation clearly drove home his message that thereare plenty of volunteers who would love to help, ifyou just ask!

Later on Thursday, some of our members reviewedhow technology, websites and social media wereno longer optional in the running of a successfulChapter. Sally Thompson shared the keys to a suc-

continued…

GET INVOLVED!!CCI chapters are always looking for dedicated and enthusiastic

volunteers! Put your passion and expertise to use!

For more information, please contact your local chapter. Contact information can be found at

http://www.cci.ca/CONTACTUS/chapterlocations.asp

Page NN-2CCI National News � Summer 2015

cessful website, with a reminder to keep the targetaudience in mind. Marc Bhalla described whymaking information accessible on your publicwebsite, and through various social media forumswould actually increase CCI’s profile and help drivemembership through recognition. Search enginesthat rate websites cannot rate private areas of awebsite, and as such, our potential members arenot finding us because our knowledge is hiddenaway. Alison Nash reviewed the newly updatedNational Website and described what the improve-ments were, and how the CCI branding and searchengine optimization had been highly prioritizedduring the update.

The last formal seminar had Bob St. Laurent andTania Haluk talking about harnessing the power ofsharing resources, materials and knowledge withthe other local Chapters. Bob talked about how all

Message from the PresidentCont’d.

orum, which F’’ Feaderstional LCI Naall Ction with the 2015 Fonjunce in cGM will take plache ATtional tivities of the Naes of the actt miss the upda’onober 22-23, 2015. Dtcor Ois scheduled f for O

vide an ohe meeting will prT. ersees and chaptommitttional c, and of the nadoare BecutivExCI.k with other members of Corwo netor members ty f for members ttunitoppor

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of the Atlantic provinces have ended up sharingtheir educational materials since their legislationis so similar, which enabled them to move forwardwith their seminars much more rapidly than theycould have individually. Tania talked about thesharing done through the Ontario Caucus, whichis a committee of members from all seven OntarioChapters, and how that cooperation allowed moreinfluence and sharing of ideas, materials and ob-jectives for the benefit of all Chapters.

That night, the local Windsor Chapter thrilled us allwith a guided tour of the Hiram Walker Museum,and a history lesson in a wonderful format calleda “Rum-Runners Tour”. We all got a new respectfor the prohibition ingenuity and a great exampleof how to take advantage of the conditions of yourtime. There is opportunity everywhere if we justlook for it!

I am sure that I speak for the nearly 90 attendeesat this semi-annual Leaders Forum, when I say thatwe learned a lot about Windsor and its economy;

but mostly the gracious, friendly, generous mannerin which the Chapter received us as though wewere VIP guests in their city. Thank you goes outto Bill Norris and all of his wonderful Board for trulyoutdoing themselves in every single aspect of theirhosting duties. I know I said that no one wouldever host a better Leaders Forum than Winnipegdid last year, but I have been known to be correctedon occasion! Thank you to everyone who helpedout, participated, and attended. So my last “ThankYou” goes out to CCI National and all the peoplethere who helped to make this happen! These ses-sions always breathe new life into me, and regen-erate my batteries to continue volunteering forsuch a great organization, and I hope they do foryou also.

Proud to be your President.

CCI National News � Summer 2015 Page NN-3

Condo Cases Across CanadaBY JAMES DAVIDSON, LL.B., ACCI, FCCINELLIGAN O’BRIEN PAYNE, OTTAWA

It is my pleasure to provide these brief summaries of recentcondominium Court decisions across Canada. I don’t pro-vide summaries of every decision rendered. I select a hand-ful of decisions that I hope readers will find interesting. Ihope readers enjoy this regular column of the CCI Review.

Note to readers: In B.C., condominium corporations are“strata corporations” and in Quebec, condominium corpo-

rations are “syndicates”.

Note: This publication contains only a handful of this quarter’s summaries. CCImembers who would like to see the rest of this quarter’s summaries can find themat the Condo Cases Across Canada website: www.condocases.ca The current pass-word is “condocases”.

James Davidson LLB, ACCI, FCCI, Nelligan O’Brien Payne, Ottawa

THE HOT TOPIC – The definition of family and afinding of bad faith. The dilemma of the dissentingdirector.

A recent case in Ontario, dealing with a condominium’s strugglesto establish a definition of “family”, included a finding that oneof the directors had acted in bad faith. The case deals with theresponsibilities – and the dilemma – of the dissenting director.Here’s my summary of the case:

Ballingall v. Carleton Condominium Corporation No. 111(Ontario Superior Court) April 21, 2015

Condominium corporation given opportunity to pass rule toestablish definition of family. One of the directors found to haveacted in bad faith

The condominium’s Declaration contained a provision stating that the unitscould be used only as private single family residences – but contained nodefinition of the term “family”. The corporation’s legal counsel recom-mended that the corporation pass a rule to establish a definition of family.Otherwise, the narrow definition endorsed by the courts in other casesmight be imposed upon the condominium corporation. [See NipissingCondominium Corporation No. 4 v. Kilfoyl (Condo Cases Across Canada Parts28 and 30, November 2009 and May 2010) and Chan v. Toronto StandardCondominium Corporation No. 1834 (Condo Cases Across Canada Parts 33and 39, February 2011 and August 2012).]

In 2012, a majority of the board voted to proceed with a proposed ruleto establish a definition of family. The proposed definition excludedgroups of unrelated persons who did not intend to live together per-manently (such as most groups of cohabiting students). The rule alsoincluded a provision grandfathering or exempting existing occupantsfrom the provisions of the rule. In accordance with the board’s majoritydecision, the proposed rule was prepared for presentation to the own-ers (for a vote).

One of the directors, MacMillan, did not agree with the proposed rule.MacMillan resided in the condominium, but also owned (and leased)a number of other units. He felt that landlords should be able to con-tinue leasing to unrelated persons (such as groups of students). Hefelt that the new rule was a threat to his investments, and to the in-vestments of many other owners. He campaigned actively against therule, seeking to persuade owners to vote against it.

At the AGM on June 17, 2013, the proposed rule was voted down – 78for to 127 against.

One of the directors, Ballingall, subsequently resigned from the boardand started this Court application along with three of the other owners,for the following relief:

a) An order requiring that the condominium corporation enforcethe “single family use” provision in the Declaration;

b) A declaration that MacMillan had acted in bad faith;c) A declaration that the condominium corporation had acted op-

pressively, by unfairly disregarding the interests of the Appli-cants.

After the application was commenced, the reconstituted board (stillincluding MacMillan) met with legal counsel to revisit the possibilityof passing a new rule to establish a definition of family. The boardthen prepared a new rule containing the same definition (as in the rulethat had been voted down) but a different grandfathering provision.The revised grandfathering provision included grandfathering of ex-isting owners as long as they confirmed that their understanding (atthe time of their purchase) was that they would be able to lease theirunit(s) to unrelated persons. This proposed new grandfathering wouldexempt the units of those owners (from the definition of family), whilethey were owned by the grandfathered owners, for a period of tenyears. Therefore, one of the key issues on the application was: Shouldthe condominium corporation be permitted an opportunity to passthis new rule? The Court held as follows:

continued…


a) The Applicants were entitled to have the “single family use” provisionin the Declaration enforced.

b) However, the condominium corporation should be permitted an op-portunity to pass the proposed new rule, but with a modified grand-fathering provision. The Court said that grandfathering of occupants,and also grandfathering of certain owners, did make sense in thiscase. However, the Court said that the proposed grandfathering pro-vision was not reasonable or in keeping with the Declaration. Amongother things, the Court said that the ten-year grandfathering wastoo long. The Court said that three to five years would be more ap-propriate.

c) MacMillan had acted in bad faith, up until the commencement ofthe Application (when he began to support the idea of a new rule).

d) The condominium corporation had not acted oppressively.

The Court’s decision including the following:

Once this litigation was commenced, the new Board moved quickly to passa new Rule) that mirrored the previous version (of the rule) passed by theprevious Board (under the leadership of Ballingall) aside from the grandfa-thering provisions. In that the earlier version of the rule had been rejectedat an AGM due, in great measure, to the restrictive grandfathering provisions,it was reasonable for the new Board to expand those provisions…AlthoughI have found that the grandfathering provisions in the new Rule are unrea-sonable and inconsistent with the Declaration, the evidence is inadequateto persuade me that the Board’s passage of the Rule amounted to an abuseof power, a wrong of the most serious sort, or an act of bad faith.

The Board shall have 60 days in which to amend the grandfathering clause(in the Rule) to be a truly temporary, transitional, provision to wean landlordowners off rentals to multiple, unrelated, transient tenants not meeting theexpanded definition of “single family”, while at the same time being reason-able and consistent with the Declaration. Failing the passage of such anamendment, the Corporation must interpret and enforce (the single familyuse provision) of the Declaration…in a fashion consistent with current On-tario Law regarding the meaning of “single family residence” in the condo-minium context.

BC Case – Getzlaf v. The Owners, Strata Plan VR 159 (BritishColumbia Supreme Court) March 19, 2015

Owner had no right to install privacy screen

The strata corporation was required to replace a roof membrane (and the land-scaping on top of the membrane). This work affected a patio area adjacent tothe strata lot of one of the owners. In particular, this “resulted in a loss of privacy

and negatively impacted the aesthetics of (the owner’s) surroundings”. The owner sought permission of the strata corporation to install a privacy screen,but this was refused, pending completion of the project. The owner neverthelesswent ahead and installed a privacy screen; and as a result the strata corporationlevied fines against him. The owner then petitioned for the following relief:

• A remedy for the actions of the respondent regarding the replacementof the upper parkade membrane project.

• That the respondent restore the upper parkade to its original design,being a rooftop garden;

• That the respondent restore the petitioner’s brick wall foundation suchthat he can then install anchor posts for the installation of a fence;

• That the respondent be enjoined from removing the petitioner’s existingprivacy screen without his authorization; and

• A reversal of the fines levied by the respondent.

The Court dismissed the owner’s petition. The Court said:

The respondent (Strata Corporation) has not disregarded the petitioner’s desire forprivacy. It is in the process of obtaining estimates for the installation of privacyscreening, fencing, and plants for the benefit of units 103 and 104 (the petitioner’sunit) that would be consistent in appearance with the rest of the strata complex.

Alberta Case – Owners: Condominium Plan No. 762 1302 v.Stebbing (Alberta Court of Queen’s Bench) April 7, 2015

On appeal, cat permitted to stay as a grandfathered pet

The condominium’s by-laws permitted pets, but only with written consent ofthe board. The board had not given consent for the owner’s cat, and the lowerCourt held that the cat was in violation of the by-law. However, the lower Courtordered that the enforcement of the by-law be stayed or delayed until the cateither died of natural causes or was relocated. [See Condo Cases Across Canada,Part 48, November 2014.]

The corporation appealed, arguing that the lower Court had not shown sufficientdeference to the corporation’s decision to require that pets be removed.

The Appeal Court noted that the board had decided, in 2012, to eliminate catsfrom the building. This objective would be met by refusing new cats, and byordering the removal of all cats whose owners had not obtained writtenpermission from the board. Cats which had received permission at that timewere “grandfathered” and permitted to stay. The owner (Ms. Stebbing) hadmoved into the building in 2010, but had never received consent for her cat.

The Appeal Court held that Ms. Stebbing should be permitted to keep her cat asa “grandfathered pet” because the corporation had either permitted the cat orhad failed to take steps with reasonable haste to require its removal.

Condo Cases Across Canada Cont’d.


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EXECUTIVE PROFILE

Kim Coulter, ACCI, FCCICoulter Building Consultants Ltd.

For the past 37 years, Kim’s expertise has beenfocused on the evaluation and problem correctionof multi-unit residential, commercial, institutionaland recreational properties throughout NorthAmerica. This has ranged from building envelope

performance testing on low energy housing in the Canadian Arctic tobuilding condition assessments of five star luxury resorts in Florida. Withthis diverse understanding of the performance of building claddings, in1993 Kim was appointed by the Canadian Commission on Building and FireCodes to sit as a member on Part 5 of the National Building Code of CanadaStanding Committee on Environmental Separation. This section of the codedeals with building envelope design as it applies to buildings other thansingle family housing. He was a committee member until 2008.

In 1997 Kim established Coulter Building Consultants Ltd., ConsultingEngineers & Building Scientists, with a specific focus on condominium

engineering. In 1999 he was invited to become a board member of theGolden Horseshoe Chapter of CCI and two years later became its BoardPresident until 2009, when he became Board Chair. Kim is still on the GHCboard. Kim has been on the CCI National Council and Executive Board since2006. He received his ACCI (engineering) in 2001 and FCCI in 2007. He isa featured writer for CCI and ACMO (Association of Condominium Managersof Ontario) and has spoken at numerous condominium and buildingscience related conferences and seminars across Canada.

Since 2011, Kim has been a member of Burlington’s Joseph Brant HospitalBuilding and Facilities Committee, advising the Board of Governors on the$312 million redevelopment project which broke ground earlier this year.

Kim served for eight years as Board President of the condominium corpo-ration where he lives, and experienced firsthand, the unique challengesand rewards that one often reads about in CCI National News.

Newfoundland & LabradorChapter – I regrettably missed the JuneSeminar in Windsor but our Education Chair, DaveCumming attended and he certainly gave a glowingreport on the event to us at our last meeting. Thatwas not a surprise to me having been the beneficiaryof many of those events. As a result of that meeting,we decided that we will have two people from ourChapter attend all future National meetings, when-ever possible. We are doing well financially and wethought it well worth the cost to have other Direc-tors from our Board attend future meetings.

Our Chapter has been busy during the winter andspring preparing for our renewals, spring seminarand newsletter. We normally do not have a lot ofactivity during the summer months, however, thisyear our Education Committee is quite busy puttingthe finishes touches on the roll out of our first Direc-tor’s Course. It has taken a lot of hard work and thebetter part of a year to bring it together, and ourChapter is very grateful to Dave who took the leadand completed most of the work on this project. Asit nears completion, we still have a daunting task tosecure suitable people to teach the course material.We believe we can do the entire course in one day,preferable on a Saturday. If there is enough interestwe hope to offer it several times throughout the falland winter.

If any of you have had the good fortune to visit ourProvince, you know that we have a small population,but we are geographically vast. It is interesting tosee our Chapter being promoted across the large ex-panse of this Province. Most of our Newsletters pres-ent a “Feature Condo” on its cover and contains anarticle on that Corporation. Our last Newsletter’s“Feature Condo” was a Corporation from CornerBrook which is on the west coast of our Province.Directors of that Corporation have also travelled to

St. John’s to attend several of our Seminars. It is aneight hour drive or nearly an hour’s flight betweenthose cities and it is certainly not a one day trip. Onthe horizon, rumour has it that we are also beingscouted by Labrador City!

Carol Burke, PresidentCCI Newfoundland & Labrador Chapter

North Alberta Chapter –CCI North Alberta recently held free seminars in FortMcMurray, Grande Prairie, and two sessions in Ed-monton during the months May and June to high-light the new changes in the Condominium PropertyAct that was passed in December 2014. More than500 individuals attended these sessions. Manythanks to condominium lawyers Victoria Archer andHugh Willis for generously donating their time andefforts in providing these seminars.

CCI North Alberta held the 6th Annual Conferenceand Trade Show in Edmonton on May 29th and 30th.Once again we grew the number of attendees andparticipants to new heights, and the feedback wereceived was very positive. I want to express mygratitude to all the presenters and sponsors for mak-ing this conference such an amazing event. Partic-ularly, I want to thank HUB International PhoenixInsurance Brokers for their title sponsorship; wecould not provide these events in an affordable waywithout our business partners and members.

This summer is not going to be restful for the CCIBoard of Directors, with multiple projects on the gofor our chapter. We host our Annual Golf Tournamenton August 18, 2015 at the Eagle Rock Golf and Coun-try Club, which is going to be our largest yet basedon registrations so far.

We are in the process of re-writing our constitution,


CHAPTER CHATTER

continued…

Manitoba Chapter– Manitoba’snew Condominium Legislation came into effect onFebruary 1st of 2015 and our Education Committeehas delivered an exciting program to address theneeds of the various constituents of CCI includingdedicated sessions for boards and property man-agers. To date we have had four full education ses-sions on the Act and seven Lunch and Learn sessions– a very full program indeed!

The Property Tax Fairness Campaign is continuing tomake inroads and foster relationships with politi-cians at both the municipal and provincial level.Change of the type we are seeking takes time andsignificant effort. This initiative continues to be im-portant to our members.

We have managed a significant increase in our mem-bership this past year. We are up from 302 memberslast year to 319 members this year. While this ispartly attributable to the need for education drivenby the requirements of the new condominium legis-lation I would also like to suggest that it is due to thequality of our newsletter and programming.

Several of the CCI board and our administrator at-tended the recent CCI Spring Leadership sessions inWindsor, Ontario. Windsor did a phenomenal job atputting together the conference. We extend ourthanks to the Windsor Chapter for their hard workand to CCI National for the quality of the educationsessions. I believe those from our board who at-tended were inspired by the sessions and we havereturned to Manitoba with new ideas and renewedenthusiasm.

Along with our core services of Education and ourNewsletter in 2015 – 2016 you will see a more visi-ble social media presence for Manitoba Chapter.

Pamela Pyke, President CCI Manitoba Chapter


The Windsor Chapter - Fabulous Hosts!

A packed room at the sessions

Da Bosses!

Rum Runner Dinner

Beautiful Day for a golf game!

Chapter Chatter Cont’d.

as well as our course materials related to the Con-dominium Management 100-300 Series. Our Boardof Directors is attending an all-day retreat on July17, 2015 to set the goals and direction for the 2015-2016 year.

I am very pleased to announce that long time mem-ber Alan Whyte has been hired on as of June 1, 2015in the capacity as Assistant to the Executive. He hasbeen so critical to our success this past month, at-tending a number of sessions with the Alberta Gov-ernment which includes discussions related to theCondominium Property Act and its regulations andas a committee member on the implementationcommittee for property management licensing. Hir-ing Alan alongside our long time administrator JoyceSchwan has allowed CCI North Alberta to build ca-pacity as an organization to engage in new educa-tion, membership, government advocacy, andcommunication goals.

Enjoy the rest of summer!

Anand Sharma, PresidentCCI North Alberta Chapter

North Western OntarioChapter – The North Western OntarioChapter had a great year again.

We made a concerted effort to improve attendanceat our seminars, and engage the directors of condosand owners of condo units. We had a seminar in thespring of 2014 on Condo reform and Armand Conantof Toronto was our guest speaker. There was a greatturnout. We are having Armand attend again in thefall of 2015 to continue the Condo Reform and he isnow going to comment on the draft legislation putforward by the Province a month ago.

continued…

Thank you to our sponsors:

GOLd, SILver ANd BrONze LeveLS

Alpine ConstructionCCI Ottawa & Area ChapterCohen Highley Lawyers

Huron Shores Property Management Inc.PBL Insurance Limited

RBC Wealth ManagementWSP Group

PLATINum LeveL

CCI NationalElia Associates

Gordon B. Lee, CASmith Valeriote Law Firm LLP

Thielk Yoker LLP


Golden Horseshoe Chapter:September 24, 2015 - AGM

Huronia Chapter:September 18, 2015 - Condo Conference and AGM September 26, 2015 – North Bay Forum

manitoba Chapter:October 1, 2015 – AGM and Fall SeminarOctober 7, 2015 – CCI President’s Club

Ottawa & Area Chapter:September 2015 - CCI/ACMO Conference and Trade Show (Kingston)October 2015 – AGM and SeminarNovember 2015 – Fall Directors Course

South Alberta Chapter:Fall 2015 – CM 100 Level CourseWinter 2016 – CM 200 Level CourseSpring 2016 – CM 300 Level Course

Toronto & Area Chapter:July 8, 2015 – Condo Fraud SeminarSeptember 17, 2015 – The Utility Jolt…Shocked Again!September 29, 2015 – Level 101 CourseOctober 14, 2015 – Level 102 Course (Condo Governance)

Chapters are adding new events all the time, check back with your local chapter to get an updated list of events in your area!

UPCOMING EVENTS

TO ATTEND THE 19TH ANNUAL CONDOMINIUM CONFERENCE

PLAN NOW!

November 13-14, 2015Toronto Congress Centre - North Building

Keynote Speaker: Warren Macdonald who became a double amputee when he lost both legs in a freak rock fall on a remote Australian island 18 years ago. Macdonald’s story is one of perseverance against death-defying odds.

On Friday night, delegates will be able to relax and mingle as they enjoy jazz from Toronto’s ultimate instrumentalist, two-time Juno Award winner Bob DeAngelis.

Sessions include our ever popular Rapid Fire Legal session along with

• Rapid Fire Engineering and Rapid Fire Insurance• Health & Safety• Shared Facilities• The Great Director Debate• AGM’s• Status Certificates and much more

VISIT THE CONFERENCE WEBSITE FOR FULL PROGRAM DETAILS: WWW.CONDOCONFERENCE.CA

Two days of educational sessions for professional condominium managers,condominium directors and other professionals working in the industry;PLUS The largest condominium industry trade show in Canada.

#leadingtheway

PRESENTED BY:

IN PARTNERSHIP

WITH

These kinds of presentations were made possible with a special one-time grantfrom CCI National, and have raised the awareness of CCI in our district and hasreinvigorated our seminars.

CCI NWO has been making an effort to get into the 21st century communicationsand social media. We are revamping our web page and looking at Face Book andTwitter as a way to connect with the condo community.

We are making concerted efforts to get email addresses of the officers anddirectors of all of the condo corporations in Thunder Bay and the area, so thatwe can communicate better, cheaper and faster with our newsletters (includingNationals revamped electronic newsletter) and seminar information.

Our newsletter committee is getting more advertising from our members andalso having more articles about our members. The newsletter is a professionallooking product and improving with every issue.

The North West of Ontario is growing its condo community each year, and moreand more people are moving into condos. This is consistent with the demo-graphics of the north changing as the population ages. As the Byrds once sangin the 60’s , “ …. for the times they are a changing …..”

Doug Shanks, President CCI North Western Ontario Chapter

Chapter Chatter Cont’d.


Steps before this bill becomes lawReaders must keep in mind that Bill 106has not been adopted as of yet.

Before Bill 106 becomes law, it must gothrough several more stages, including twomore “readings” and royal assent. As partof last month’s “first reading”, the bill wasbasically introduced at Queens Park andthe MPPs accept the bill for future de-bate. This is when it was assigned its billnumber (Bill 106). The real debate overthe substance of the bill will take place dur-ing the “second reading”. Sometimes billspass easily to third reading, sometimes theyare further examined by Standing or Select

Committees. It is during the “third read-ing”, after a final debate, that the MPPs willvote on it. Once the majority of the MPPshave voted in favour of a bill, it is presentedto the Province’s Lieutenant Governor forroyal assent and an effective date is usuallygiven. This is when a bill becomes law.Until then, condominiums are still beingregulated by the current Condominium Act.

There are probably many more months,and perhaps even years, before this new Actis enacted. And we can expect morechanges to be made to this version of theBill before it gets adopted as law. At leastwe now have something to sink our teeth

into and start dreaming about what thecondo industry in Ontario will look like inthe future.

* This article was first published onCondoAdviser.ca and is reproduced herewith permission

Rod heads Gowlings’ Condominium LawGroup. He regularly publishes on Gowlings’condo law blog CondoAdviser.ca. He is onthe board of directors of the Ottawa chapterof CCI and is the co-editor of its quarterlymagazine. Rod also sits on the board of direc-tors of his own condominium corporation. �

NEWS RELEASE

CANADIAN CONDOMINIUM INSTITUTE WELCOMES BILL 106

TORONTO, ON – JUNE 24, 2015 –Condominium owners across Ontario arerejoicing and they are not alone!

The Canadian Condominium Institute(CCI) is also celebrating Bill 106, the Pro-tecting Condominium Owners Act, whichthe Ontario government tabled on May 27.Positive changes in Bill 106 include estab-lishing mandatory licensing of condo man-agers and strengthening financialmanagement rules for condo corporationsto help prevent fraud and mismanagement.The Ontario Caucus of CCI, a national, in-dependent, non-profit body dealing exclu-sively with condominium issues, has beenamong those pushing for legislative reformin Ontario for more than a decade. CCImembers played an active role in the broad-based public consultations and variousworking panels over the past two-and-a-halfyears. Thus, it was an exciting day when theMinister of Government and ConsumerServices, David Orazietti, introduced theBill and it was given First Reading andpassed.

The proposed legislation includes manda-tory education for condominium directors.

Tania Haluk, the current Chair of the CCIOntario Caucus states “The CanadianCondominium Institute has been front andcentre in providing director education since1982 and we anticipate, that despitemandatory education being offeredthrough a newly formed Condo Authority,CCI will continue to be a long term sourceof ongoing training for directors”.

The CCI Ontario Caucus appreciates thegovernment did not introduce a new Con-dominium Act, but rather aims to amendthe present one. It welcomes the changeswhich are extensive and significant. Amongthem, notice of off-budget spendingwhereby a condominium board would haveto notify owners if it proposed an expenseexceeding the budgeted amount by morethan a set margin. CCI believes transparentfinancial management is the foundation ofa successful condominium corporation andcommunity.

Bill 106 also calls for the establishment ofa Condo Authority to oversee the educationof owners and directors and to provide adispute resolution service. It also creates asecond and distinct authority to oversee the

licensing, discipline and regulation ofcondo property managers and managementcompanies.

The Canadian Condominium Institutelooks forward to Bill 106 receiving SecondReading then going to Committee Hear-ings where CCI will offer more input andfeedback. Once the Bill passes the ThirdReading by the Ontario Legislature and re-ceives Royal Assent from the LieutenantGovernor, it will become law.

CCI has numerous resources and expertmembers across the province available, whoare able to provide more information andperspectives to the media regarding the pro-posed new Act.

Ontario currently has approximately700,000 condo units and 10,000 condocorporations. About 1.3 million Ontarianslive in a condo and more than half of newhomes under construction in the provinceare condos, according to the Ministry ofGovernment and Consumer Services. �


Condominium Act Amendments(FIRST READING)

By James Davidson, LLB, FCCI, Nelligan O’Brien Payne LLP

Proposed amendments to the Condominium Act have now received first reading. The following chart is intendedto be a list of the “highlights” that we see in the amendments. Note that this is not intended to be a comprehensivelist of the amendments. Again, this is just a list of the highlights, as we see them.

• Tribunal to have power to: - Order alternative dispute resolution; - Order compliance; - Order compensation up to greater of

$25,000 or prescribed amount; - Order payment of costs; - Order payment of a penalty (lesser of

$5,000 or prescribed amount) in relationto non-compliance with obligation toallow for examination of records;

- Order any other relief the Tribunal con-siders fair.

• Any amounts owed by owner under orderof Tribunal added to owner’s common ex-penses

• Any amounts owed by corporation underorder of Tribunal may be set-off againstcommon expenses

• Appeal to Division Court on questions oflawOrders of Tribunal to be public

Tarion(Section 2(2.1)) • Residential conversions to be covered by

Tarion

DeclarationSection 7 • Declaration to include a statement as to

how common expense contributions andcommon interests have been determined bythe declarant

• Declaration may contain a statement of thecommon expenses and also a statement ofthe circumstances that may allow for anyamount to be added to an owner’s com-mon expenses. [Note: This appears tomean that, for an amount to be added to anowner’s common expenses, there will haveto be a provision allowing for such in theDeclaration.]

New/Revised Definitions(Section 1(1)) • “condominium guide” [new definition] • “declarant affiliate” [new definition] • Unit “improvement” [new definition] • “non-leased voting unit” [to replace the

term ‘owner-occupied unit’ in Section 51] • “repair” [new definition, which includes

repair or replacement after normal wear andtear (currently part of maintenance as de-fined in Section 90)]

• “residential condominium conversionproject” [new definition]“standard unit”[will include a prescribed description – ifthere is no standard unit by-law]

Condominium AuthorityPart I.1 (Sections 1.1 to 1.30) • Independent (non-Crown), self-funded, not-

for-profit corporation • Start-up funding from Province; subsequent

funding from user fees and from smallmonthly fees payable by all Ontario condo-minium corporations

• Mandate: - Directors’ education / training - Information and related resources for

condominium owners, corporations, etc. - Administration of Condominium Au-

thority Tribunal

Condominium Authority TribunalPart I.2 (Sections 1.31 to 1.48) • Decision-making authority for certain

types of disputes between corporations,owners, occupiers, mortgagees, purchasers.[Note: Occupiers will not have the right toinitiate applications to the Tribunal.]


Condominium RegistrarPart II.1 (Sections 9.1 to 9.9) • Corporations to be required to file initial,

turnover and annual returns (containingprescribed information)

• Corporations to be required to file noticesof changes in Board membership and anyother prescribed information

• Registrar to maintain public electronicdatabase

Penalties, Fines(Section 17(4)) • Penalties or fines to be prohibited. • Corporations can only recover actual losses

or costs

Entering Units(Section 19(2)) • In addition to the corporation’s right to

enter units or exclusive-use commonelements on reasonable notice, Declarationor By-laws can give corporation the right toenter without notice in an emergency

Shared Facilities Agreements(Section 21.1) • Shared facilities agreements to be manda-

tory in relation to various types of sharedproperties

• Parties to agreements may make joint by-laws or rules, without involving the owners

Telecommunications Agreements(Section 22) • Revised provisions respecting telecommu-

nication agreements

Loss of Right to Sue(Section 23.1) • Corporations in arrears of amounts owed to

Condo Authority or Condo Authority Tribu-nal may lose the right to sue

Property Acquisitions (Section 26.1) • No property acquisitions (for consideration)

to be permitted except where arranged bypost-turnover Board. [Declarants therefore

to be prevented from “selling” property tocondominium corporations (for considera-tion).]

Declarant’s Liability(Section 26.2) • Declaration, By-laws, Agreements, etc.

cannot place limits on liability of Declar-ant, unless approved by post-turnoverBoard. [This essentially reverses the TSCC2095 v. West Harbour Court decision.]

Notice to Owners(Section 26.3) • Corporations to be obligated to provide

regular notices to owners, containingprescribed information

Directors • Directors’ training (education) to be

mandatory (Section 29) • Regulations to require certain disclosure

from Directors (Section 29) • Improved definition of Board “quorum”

(Section 32(2)) • Meetings may be held by teleconference

(even without a by-law) if all Directors con-sent (Section 35(5))

• Non-leased voting position only required ifa minority of units are not leased (Sections51(5) and (6))

Contracts(Section 39.1) • “Procurement process” (tendering) may be

required for certain contracts

Performance Audits(Section 44) • Various amendments respecting first year

performance audits

Meetings • Preliminary/Advance Notice of Meeting

(20 days before actual notice of meeting) tobe required for all election meetings (Sec-tions 45.1 and 47)

• Revised provisions for Requisitioned Meet-ings (Section 46)

• Reduced quorum requirement (15%) forthird or subsequent attempt to hold turnover

Condominium Act Amendments Cont ’d


meeting or AGM, unless the by-laws stateotherwise (Section 50)

• By-laws may allow for voting at meeting by“telephonic or electronic means” (Section52(1))

• Prescribed (mandatory) form of proxy (Sec-tion 52(4))

• Ballots and proxies are confirmed to be cor-porate records

Record of Owners and Mortgagees (Section 46.1) • Expanded provision respecting corpora-

tion’s obligation to maintain a record of thenames and addresses of owners and mort-gagees

• Owners not obligated to give an address forservice. If owner does not give an addressfor service, the unit address is then theowner’s address for service

Records(Section 55) • New regulations anticipated respecting

retention periods for records • New regulations anticipated respecting in-

spection of records, including procedures aswell as fees payable to the corporation

• Penalty for non-compliance (in relation toexamination of records) to be determinedby Regulation

• Depending upon nature of dispute, claimcan be made to Small Claims Court or toCondominium Authority Tribunal

By-laws(Section 56) • No borrowing without a by-law to author-

ize the specific borrowing • Voting requirement remains a majority of

all units, but this may be reduced by regula-tion

• By-law can be passed to govern votingmethods

Condominium Guide(Section 71.1) • Condominium Guide to be prepared (likely

by Condominium Authority) and includedby Declarants with Disclosure Statements

Disclosure Statements(Sections 72, 72.1 and 74) • Enhanced disclosure obligations for De-

clarants • New Regulations to govern Declarants’

budgeted reserve fund contributions • New provisions respecting material changes

First-year deficit(Section 75) • Declarant may be responsible for inade-

quate contribution to reserve fund (if re-serve fund budget not prepared as requiredby the Act)

• New Regulations will explain how Section75 applies to phased condominiums

Implied Covenants in Original PurchaseAgreements(Section 79) • Additional implied covenants

Sale of entire Property by Corporation(Sections 82.1 and 82.2) • New provisions relating to a sale of the en-

tire property. [This provision perhaps su-persedes Section 124 (?)]

Tenancies(Section 83) • Notice periods (for notices to corporation)

reduced to 10 days

Common Expenses Annual Budget (Section 83.1) • New provisions respecting budgets, includ-

ing required notices to owners • Notices to owners will also be required if

expenses exceed budgeted amounts by pre-scribed amounts

Additions to Common Expenses • Owners to be given notice within 15 days

of prescribed amounts being added to theowner’s common expenses (Section 84(4))

• Owners will then have a prescribed proce-dure by which to challenge any addition tothe owner’s common expenses (Sections84(5)-(11))



Repair and Maintenance(Sections 89-92) • Various revisions to repair and maintenance

provisions. • Owners to be obligated to repair their units

(unless the Declaration states otherwise). • The definition of maintenance is deleted.

[See new definition of “repair”.] • The Declaration may say that owners must

repair or maintain any parts of the commonelements

• The Declaration may say that the corpora-tion must repair or maintain any part of theunits

Reserve Funds(Section 93) • Regulations may prescribe additional pur-

poses for reserve funds • Regulations may define “major repair”

(reference to “replacement” dropped) • “Adequate” to be defined in regulations • Corporation must obtain expert opinion

(respecting need for early reserve fundstudy) if reserve fund balance is below aprescribed amount

Modifications(Sections 97 and 98) • New definition of “modification” to include

combination or series of changes that “re-late to each other”

• Threshold for “without notice” modifica-tions to be lesser of 3% of budget or$30,000 (and provided the owners wouldnot objectively regard the modifications ascausing a material reduction or eliminationin their use or enjoyment)

• Regulations to deal with determining “cost”of modification

Responsibility for Deductibles under Corpora-tion’s Insurance Policy(Sections 105 and 107) • Owner responsible for deductible if any in-

sured damage is caused by owner, lesseeor occupant of the unit

• Any other exception to require a Declara-tion amendment with 90% consent [Note:“Insurance deductibles by-laws” to beeliminated.]

Investments(Section 115) • Investments must be either (a) government issued, or (b) government secured, or (c) insured by CDIC or by the Deposit

Insurance Corporation of Ontario

Unreasonable noise or nuisance prohibited(Section 117(2)) • Unreasonable noise prohibited • Other nuisances, annoyances or disrup-

tions may also be prohibited by regulation

Mediation and Arbitration(Section 132) • Regulations are to contain mediation and

arbitration procedures (unless corporationhas a by-law to govern the procedures, orthe parties agree to other procedures)

• Mediation and Arbitration under s. 132 willnot apply where Condominium Authority Tri-bunal or Court has jurisdiction over the dispute

• Arbitration awards to be made public • New enforcement provisions

Compliance Orders – Court(Section 134) • Court Application not available for disputes

which are subject to mandatorymediation/arbitration under s. 132, or whichfall within the jurisdiction of the Condo-minium Authority Tribunal

• Successful party – the corporation or anowner – could be entitled to “additional ac-tual costs incurred in obtaining the order”

• Regulations may define “additional or ac-tual costs”

Enforcement – Condominium Authority and Registrar(Sections 134.1, 134.2, 136.1, 136.2) • Various new enforcement provisions respect-

ing Condominium Authority and Registrar

Offences(Section 137) • Increased penalties • New offence – Declarant or Declarant affili-

ate failing to meet new website requirements(for Declarants and Declarant affiliates) to becontained in regulations




Owners Right to Consent • Owner loses right to consent if in arrears for

30 days: [Amendments to Declarations orDescriptions (Section 107); Termination ofTelecommunications Agreements (Section22); Dispensing with audits (Section 60);Amalgamation (Section 120); Sale of Exclu-sive-Use Common Elements (Section 124)]

[Note: But does this reduce the total re-quired number of consents?]

Licensing of Managers • CONDOMINIUM MANAGEMENT SERVICES

ACT, 2015; Schedule 2 to Condominium ActAmendments

• New administrative authority (not-for-profitcorporation) to be established (not a Crowncorporation) (Sections 2-30)

• Condominium managers and condominiummanagement providers must be licensed(Section 34)

• License requirements to be set out in Regu-lations (Section 37)

• Condominium management agreementsmust be in writing and licensees must pro-vide services in accordance with the con-tracts (Section 48)

• Every condominium management providermust also designate one manager as the“principal condominium manager”; princi-pal condominium manager must ensure con-dominium management provider complieswith Condominium Management ServicesAct and Regulations (Section 49)

• Condominium management provider may berequired to provide financial reporting to theregistrar of the authority (Section 50)

• Condominium management provider mustonly hire licensed employees (for tasks re-quiring a license) (Section 51)

• Condominium management provider mustensure that their condominium managerscomply with the Condominium ManagementServices Act and Regulations (Section 51)

• Condominium manager must be employedby a condominium management provider(Section 51)

• Any licensee must disclose (to the client)any interest of the licensee in a contract ortransaction to which the client is or will be aparty (Section 52)

• Any licensee must relinquish records to theclient upon termination of the managementcontract (Section 53)

• Licensees must not furnish, counsel, orknowingly assist in providing false informa-tion respecting the providing of condo-minium management services (Section 54)

• Licensees must not counsel, advise, orknowingly assist in contravening the Con-dominium Management Services Act, theCondominium Act, or any other prescribedAct (Section 55)

• Provisions respecting complaints, discipline,inspections, investigations and enforcement(Sections 56-70)


Reserve Fund InvestingBy Kale WildRaymond James Ltd.

Feature Art ic le

Long gone are the days when a condo-minium reserve fund could be in-vested in a simple GIC and earn a

4-5% return. With Canadian inflation cur-rently at 1.20%, and the Canadian bankrate also around that level, many condo-minium reserve funds are having difficultyjust keeping pace with inflation. This doesnot bode well in the battle against risingmaintenance costs, and in turn, risingcondominium fees. Many condominiumcorporations are following the same invest-ment strategies used during the high rateeras. However circumstances have changed,and in today’s ultra-low rate environment,those managing reserve funds must dig alittle deeper into the investment landscapein order to earn a positive real return (netof inflation) and allow the reserve fund towork for the corporation.

The Reserve Fund StudyWhen determining the required condo fees,the reserve fund study assumes an arbitraryreturn on investment in the reserve fund.This number is often between 2%-4%.Given that the current return on a one yearGIC is roughly 1.5%, many condo boardsfind their reserve funds underfunded duringthe next study, and are thus required to in-crease condo fees to make up the shortfall.This increase in condo fees essentially addsto the cost of ownership (akin to an extramortgage payment), and has the potential todecrease property values over time.

What are you Allowed to Invest in?There is much confusion, and misinforma-tion floating around surrounding section

115(5) of the Condominium Act, 1998which deals with “eligible securities” for thereserve fund. The Condominium Act,1998 defines eligible securities as:

“Bonds, debentures, guaranteed investmentcertificates, deposit receipts, certificates of de-posit, term deposits or similar instrumentsthat:1. Are issued or guaranteed by the govern-

ment of Canada or the government of anyprovince of Canada; or

2. Are issued by an institution located inOntario insured by the Canada DepositInsurance Corporation or the Deposit In-surance Corporation of Ontario; or

3. Are securities of a prescribed class (cur-rently there are no securities of a pre-scribed class).”

We have encountered conflicting interpre-tations regarding the wording above. If readverbatim, we would interpret the above asrestricting condominium corporations toinvesting their reserve funds in 100% prin-cipal-guaranteed solutions that are issuedby a CDIC-insured bank. Some interpreta-tions seem to infer only CDIC-insured in-vestments are eligible (i.e. GIC’s under$100k per bank). Either way your board in-terprets the above, there are options avail-able that offer the opportunity to earn wellin excess of the 1.5-2% fixed returns cur-rently available on GIC’s.

Ways to Increase ReturnsMarket-Linked GICsThe first step out of a fixed rate GuaranteedInvestment Certificate (GIC) with fullCDIC coverage, would be Market-Linked

GICs. These are still insured by CDIC (upto $100,000) and offer some form of par-ticipation in the positive performance of abasket of stocks, commodities, a stockindex etc. The participation is often capped(at say 4.5% a year) or only participates ina percentage (current examples: 50-90%participation, based on a basket of bluechip Canadian stocks) of the gains of theunderlying securities.

Some of these Market-Linked GICs guar-antee a minimum return even if the under-lying security experiences a negative return,whereas some carry the risk of earning a 0%return if the underlying securities do notexperience a positive return.

Principal-Protected Notes (PPN’s)There are other structured solutions whichare not insured by CDIC, but are issued byinstitutions (the big 6 banks) insured byCDIC, with the full backing of their cred-itworthiness protecting your invested capi-tal. It would be up to each board ofdirectors to determine if they are comfort-able with the creditworthiness of the issuingbank (examples: BMO, BNS, TD, CIBC).

It is important to keep in mind in every in-stance, that CDIC insurance only covers$100,000 of deposits, therefore any de-posits over this amount at a bank are notCDIC insured (even in a bank account orGIC). In many reserve funds’ situations,the issuing bank’s creditworthiness is thesafety net. We would suggest that withinthe confines of the Canadian banks’ regu-latory system, this is not a large step off thesafe path.


These solutions generally range from 5-8years in length, and like Market-LinkedGICs are based on the performance of anunderlying security, or basket of securities.The difference is that the positive perform-ance of these solutions is generally notcapped, and participates in 70% to over100% of the performance of the underlyingsecurities. In addition, these solutions areliquid daily, and may trade above or belowpar prior to maturity, depending on theperformance of the underlying securities.Therefore if there is an unexpected need forfunds, the corporation’s money is not“locked in”.

These solutions are very attractive as thereis no limit to the potential return. However,they do carry the risk of earning a 0% re-turn if the market is flat or negative at thetime of maturity. For the portion of yourreserve fund that you are highly unlikely tobe in need of within 5-7 years, these can bea solid complement.

Ways to Mitigate Risk of 0% ReturnWith a little bit of planning, a condo boardcan lock in a positive return, while allowingfor uncapped positive participation in theequity markets. To do so, they would createan investment portfolio comprised of ablend of guaranteed investments, and mar-ket-linked solutions. All these solutionswould be laddered to mature at differenttimes, so that every year there is moneycoming available. This way, even if thestock market is down at the time of matu-rity, the portfolio would still experience again (0% from structured solutions + in-come from GIC), and if the stock marketdid well, the portfolio could experiencemore substantial gains.

More WorkThis all may seem like a lot of work com-pared to parking the entire reserve fund ina 1 year GIC which renews annually. How-ever, any percentage point increase benefitsthe entire condominium corporation. If theboard decides just to stick with GICs, it isprudent to “shop around” as the bank oftenwon’t give their best rate if uncontested.The solutions eligible under the Condo-minium Act, 1998 generally do not carryany fees for the client. Therefore, there isno reason not to enlist the help of a profes-sional.

Final ThoughtsRising maintenance costs, low interest rates,and in turn rising condo fees are a frustrat-ing reality for most condominium owners,which have resulted in decreased propertyvalues and lawsuits. Although rising costsof goods and services, unexpected mainte-nance, and other costs cannot be controlledby the condominium board, they do havea fiduciary duty to ensure they take all ap-propriate measures to control the rise ofcondominium fees.

One way of doing so, which is in your con-trol, is to place a greater emphasis on find-ing the optimal investment strategy for thereserve fund. Allowing hundreds of thou-sands, or millions of dollars to sit idly in abank account, or GIC earning less than 1%is not optimal for unit owners. There aresolutions which fit well within the spirit ofthe law surrounding eligible securities thatoffer the potential for meaningful gains,and should thus be explored.

A well-structured portfolio which corre-sponds with the anticipated cash flow needs

set forth in the reserve fund study, shouldprovide the condominium corporationwith the additional funds annually whichcould be used to offset increases in condofees. This just requires condominium unitowners, and board members to make opti-mal reserve fund investing a priority, not anafterthought.

If you have any questions about reservefund investing, or suggestions for future ar-ticles surrounding reserve fund investing,please contact the writer:Kale WildRaymond James Ltd.Tel: [email protected]

Kale Wild is a Business Development Special-ist for Contego Wealth Management of Ray-mond James Ltd. Kale has recently joinedContego Wealth Management after complet-ing a degree in economics from Simon FraserUniversity, where he played on the schoolhockey team. Kale grew up in the town ofNavan, Ontario, and enjoys fishing, golfingand playing hockey in his spare time.

Disclaimer: The amount of interest payable under theNotes is uncertain. The prices of the Shares includedin the Share Basket have experienced significantmovements in the past and it is impossible to knowtheir future direction. The Notes are not equivalentto a direct investment in the Share Basket. An in-vestor cannot elect to receive the Principal Amountprior to maturity. The investor may, however, be ableto sell the Notes in a secondary market, subject toavailability, but in that event proceeds may be subjectto an Early Trading Fee and may be less than thePrincipal Amount. The Notes do not constitute de-posits insured under the Canada Deposit InsuranceCorporation Act. Raymond James Ltd., Member –Canadian Investor Protection Fund. �


Ottawa’s Real Estate Market:Condominiums as Investments By Angela Augsbury Coldwell Banker Rhodes and Company

Feature Art ic le

Anyone living in one of Ottawa’s coreneighbourhoods would be hardpressed to ignore the increasing

number of condominiums in their commu-nity. Gentrifying and established neighbour-hoods alike are all seeing some measure ofcondo development. The record high num-ber of condo apartment construction thatbegan in 2012 still has no end in sight andbuilding completions set for this year willcontinue to break Ottawa constructionrecords. These new projects run the gamutfrom low-rise boutique buildings withground floor retail to large branded urbancommunities, like Minto’s Lansdowne Parkand Windmill’s Zibi. It seems as though de-velopers are trying to offer endless options ina competitive marketplace to capture buyers.

Due to the unprecedented construction ac-tivity of Ottawa condos, it comes as no sur-prise that the current re-sale market favoursthe buyer. Due to a high inventory of unsoldnew construction units and a steady streamof re-sale units entering the marketplace, pri-vate sellers and developers alike are having aharder time selling. Affordability of new con-dos also affects the market. In recent years, asfreehold residential home ownership insideOttawa’s greenbelt has become increasinglymore expensive, budget-conscious and firsttime buyers interested in core locations havelooked to condos. In the recent condo boom,developers have attempted to capture thepopular buyer age cohort of 25 – 44 with pri-marily smaller square footage units but withhigher end finishes and in prime locations.

Unfortunately, this same age cohort has expe-rienced weakened employment which, com-bined with high condominium pricing, haslimited their purchasing power.

With the rapid growth in condos, the buyerpool has increasingly turned from owner oc-cupiers to investors. Given the current low in-terest rates and down payments required forthe initial investment of a condo unit, firsttime investors looking to enter into the realestate market routinely turned to condos. Ac-cording to the Canadian Mortgage andHousing Corporation (CMHC) in their2014 rental market report, privately held (in-

vestor) condo apartments that were offeredfor rent represented 24.2% of total condo-minium units. With the increased construc-tion, it is predicted the percentage of unitsoffered for rent may further increase.

The increase in supply has also increased theoverall vacancy rate, which is the percentageof units unoccupied that are currently beingactively marketed for rent. The average va-cancy rate for apartments in the city of Ot-tawa was 2.6%; however, for the downtowncore, where a significant number of newcondo starts are under construction, the va-cancy rate is notably higher at 3.3%.


For more seasoned real estate investors look-ing for a higher return on investment (ROI),condo units may not achieve their investmentgoals. Monthly condo fees and relatively highproperty taxes, combined with a competitiverental market, can make it virtually impossiblefor an investor to make the investment sig-nificantly “cash flow positive”. Often a higherdown payment is required to reduce monthlydebt servicing. For full time investors, a higherdown payment devoted to one investmentmeans there is less cash available for concur-rent or future investment opportunities.

There may also be uncontrollable or unfore-seen expenses that are associated with condoownership versus single or multifamily resi-dential ownership, which adds an additionalelement of risk. Condo fees, often quoted onthe lower side by developers looking to sellnew units, can double in the first year of own-ership and continue to increase. Special assess-ments levied by the condo corporation forvarious reasons can also great affect an in-vestor’s cash flow. These special assessmentsare not solely relegated to older condominiumbuildings that may be short on reserve fundsfor capital improvements. New condo-minium units are subject to the same risk.Corporations that have been poorly managed,suffered increased insurance premiums due towater damage or haven’t completed routinemaintenance of building systems can all suffercostly special assessments.

Proponents of investment in condominiums,especially in the real estate industry, havelauded the benefits of purchasing newly builtcondo units as great investment vehicles.Marketed as a low maintenance and“turnkey”, the investment depends greatly onthe appreciation of the resale value of the unitand not the cash flow of the rental income. Ina seller’s market, where demand for condos

out paces the available supply, a condo realizesappreciation. Unfortunately, this is not thecase for Ottawa’s current condo market.

In this current buyer’s market, purchasing acondo as a first time investment may be anappropriate strategy for a full-time profes-sional who is looking to enter into the marketand willing is to sacrifice ROI for the man-agement conveniences of condo ownership.Similarly, a buyer who is looking to purchasea condo for the eventual goal of future occu-pancy may also appreciate building equity andthe advantage of short-term tax benefits of-fered by a rental property. The future of thecondominium market is still uncertain and itis likely that supply will continue to outpacedemand. However, if predictions are accuratethat the public sector employment will stabi-lize and Ottawa will see a higher than ex-pected net migration, that is good news forcondo sellers.

Ultimately, for a first-time or seasoned in-vestor, there are many factors to consider inentering the real estate investment market. Itis always best to obtain advice from a knowl-edgeable professional that can assess real estategoals and objectives.

Angela Augsbury is a Real Estate Broker withColdwell Banker Rhodes and Company. Shehas over a decade of experience in investmentreal estate. �

Monthly condo feesand relatively high

property taxes,combined with acompetitive rental

market, can make itvirtually impossiblefor an investor to

make the investmentsignificantly “cash

flow positive”.


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