A PEEK INSIDE ...

June 2018

June 2018

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FROM THE EDITOR ……. Ontario votes on June 7 to elect a new Provincial Government. Many in Toronto’s Condo Community may choose to focus on matters affecting their home rather than fantastical political “promises” that are unbelievable and impractical. The Amended Condo Act, Condominium Authority of Ontario and Elevator Servicing fall into this category. Who to Vote for in 2018, page 14, may provide some insight as to how these changes are likely to impact on your condo fees. Election Canvassing - 2018, page 24, provides an overview of laws allowing for campaigning in condo buildings. While these laws do allow politicians to intrude where they may not be welcome, we remind them that doing so can have an opposite result to what they desire. A better approach may be to reach out to the communities in a more respectful manner.

When Nobody wants to Serve as a Condo Director Page 3 Don’t Burn Down your Building Page 5 Trespassing on Condo Property Page 9 Toronto’s Condo Investors Page 10 Cost of Water Leaks - $120,000 down the drain! Page 13 Who to Vote for in 2018 Page 14 Electricity Generation - Alternatives to purchasing Page 16 Selling Condo Parking Spaces and Lockers Page 18 Protecting Non-smokers Means Banning Smoking Page 18 Avoid Four Hour Board Meetings Page 19 Cyber-Theft Risk to Condo Corporations Page 22 Short-Term Condo Rentals Out of Control Page 23

YOUR CONDO IN 2050 Life in 2050 may be quite different than today. Condo residents won’t have to park their car in 2050. They won’t own a parking space because they don’t own a car. Improved transit, car sharing and Uber-type services will make ownership of a personal automobile less compelling. This is just one of many changes that may occur by 2050.

You will come home to the front of your condo building and enter through the front door rather than an underground

June 2018

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Serving as a condo director can be a thankless job. Individuals rarely receive the recognition they deserve. Condo directors may tire of abuse and retire from this role or choose not to serve another term. What happens when nobody want to serve as a condo director? When nobody wants to fill a position up for election, the individual currently serving as a director can continue until a replacement becomes available. If the current director declines to continue in the role there remains an unfilled vacancy on the board. The situation becomes more serious when the director is also an officer; president, secretary, treasurer or possibly vice president. These individuals have specific roles in a condo corporation as detailed in governing documents. A vacancy may mean nobody is available to sign cheques, enter into contracts with vendors or manage the condo corporation’s bank accounts. Should a current director resign and nobody is available to replace them, there may be consequences if the condo board is unable to achieve quorum. Quorum is defined in a condo corporation’s governing documents but is likely to mean more than 50% of directors on a board. For a condo corporation requiring five directors, quorum is likely to mean three individuals must be serving and in attendance at any directors meeting for them to legally conduct day-to-day business. Denise Lash, of Lash Condo Law, explains a more problematic

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WHEN NOBODY WANTS TO SERVE AS A CONDO DIRECTOR

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garage.

You will arrive at your suite without a key. The voice command “arrive” will unlock your door, turn on lights and activate temperature controls. Music from a preselected playlist will be playing. When leaving the next morning a voice command “leave” will lock your door, turn off lights and set temperature controls to an “away” setting. Your condo building will include a drone landing pad to receive purchases placed over the internet. Your suite’s battery storage and charging station will recharge batteries for an ebike, smartphone and various computer devices. Moving walls and panels that rotate will allow rooms to be reconfigured. Enlarge a room for entertaining or divide it for sleeping areas. The television on a rotating wall will be viewable from multiple rooms. Solar panels on the balcony will help reduce the cost of heating and cooling. Improved energy-

efficient appliances will reduce utility costs. Sensors in lights and appliances will monitor your health and current physical condition. They will inform you when to place a supermarket order. Voice commands will control lighting with settings for dinner, TV, parties, relaxation and bed. An indoor “grow wall” will allow indoor growing of fruits, vegetables and herbs. New building techniques and materials will provide improved sound insulation. Auto darkening windows will protect against the sun and help maintain comfortable internal temperatures.

Many of these lifestyle enhancements are close to practical application. They are currently available or being tested for large scale implementation.

situation. “In the event nobody is willing to serve as a condo director, the courts could step in and appoint an administrator to manage the affairs of the condo corporation. The costs of an administrator can be substantially higher than the costs that owners would have been paying when volunteer directors were in place. The administrator costs are paid out of monthly common expenses and would likely result in some financial hardship to the owners.” Money needed

for maintenance or other purposes would be repurposed to pay for services that have been assumed to be voluntary. Condo communities with individuals willing to serve as directors are always preferable. Those communities which have alienated residents and made it unnecessarily difficult for directors willing to serve can find the alternative disappointing.

WHEN NOBODY WANTS TO SERVE AS A CONDO DIRECTOR… CONTINUED FROM PAGE 3

YOUR CONDO IN 2050… CONTINUED FROM PAGE 1

CONDO LIFE

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BUILDING MANAGEMENT

DON’T BURN DOWN YOUR BUILDING

Most condo fires can be avoided by eliminating bad habits. Appliance Crowding Appliances require space for heat to dissipate. Leave space behind and beside appliances.

Safe Use of Extension Cords and Power Bars Too many items using a single outlet can increase the risk of an electrical fire. Large or major appliances should be plugged directly into a wall outlet. Connecting multiple power bars or extension cords can cause an overload and short circuit that result in a fire. Replace damaged, worn

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out or compromised extension cords and power bars. Anything with exposed wiring should be replaced. Monitor Cooking Food Unattended cooking is the leading cause of home fires. Abandoned cooking takes seconds to catch fire. Never leave Appliances Unattended Avoid leaving home or sleeping while food is cooking, dishwasher running or clothes cleaned. Clean Dryer and Ducts In the USA there are more than 2,900 residential

clothes dryer fires reported each year. A third of these fires are the result of the dryer or duct not being cleaned of lint. Lint, which is flammable, accumulates in the dryer and vents. When the dryer is running, heat can cause this lint to burn. Unattended Candles Never leave a candle unattended. It can tip over, be blown over by the wind, or knocked down by a pet or child. Extinguish candles when you leave a room and make sure they sit in sturdy holders.

BUILDING MANAGEMENT DON’T BURN DOWN YOUR BUILDING… CONTINUED FROM PAGE 5

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WOOD DESTROYING PESTS

Well-built and properly maintained properties can last for hundreds of years. Ensuring a home outlives its current occupants requires that it be protected against wood destroying pests including termites, carpenter ants and beetles. Moisture attracts these destructive pets. Areas that stay moist after everything else dries up may require repair or replacement. Ants seeking food will be attracted by pooling water. They can cross over trees touching a building and settle where moisture exists. They may arrive on wood products brought indoors. Wood destroying insects do their damage while feeding on wood. They create tunnels and nesting areas, and spend most of their time inside wood which makes them hard to find. Indications of their existence include small piles of sawdust near wood structures and small pinholes visible on wood surfaces. Termites are the most prevalent wood destroying insect followed by carpenter ants. Both are a year-round concern although most activity occurs during the spring. Termites have been a growing problem in the Toronto area. Carpenter ants may be visible during the day. They do most of their damage at night during summer months and can be found where there is moisture

in the wood. Carpenter ants are considered the most common destructive insect in Canada. Nature relies on them to chew up wood and turn it into sawdust which becomes compost for new growth. This natural activity becomes destructive when carpenter ants enter a building structure. Pest issues are often seasonal. They become more severe as temperatures rise and rainfall increases in early or mid-spring.

BUILDING MANAGEMENT

Precautions to prevent wood destroying insects

Ensure trees don’t touch a building

Repair leaking roofs and damaged decks

Replace water damaged wood as quickly as possible

Use only wood that is stained or painted – untreated wood is more vulnerable to pest infestation

Repair leaking pipes, air conditioning units and faucets on the outside of a building

Replace weather stripping and loose mortar around building foundations and windows

Direct water away from buildings using downspouts, gutters and splash blocks

Where lumber is used, avoid having it make contact with the ground

Store waste and wood cellulose off the ground and away from the building

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Airbnb hotels, condos and buildings offering short-term rental accommodation are a global problem. In New York City it is generally illegal to rent an apartment for fewer than 30 days. This tends to be ignored in the East Village, an area some now refer to as Suitcase Alley. Short stay visitors to the city can often be seen lugging their suitcases. Some estimate that about 55% of Airbnb listings in New York City violate the law. New legislation, if approved, would create one of the most stringent home-sharing laws in the USA. It would forbid landlords or tenants to list apartments for short-term rental. Those who ignore the law could receive fines of up to $7,500. Chicago has imposed a 4% tax on each rental. This money is used to help fund services for the homeless. Residents with single-family homes can

obtain signatures to limit Airbnb in their area. Airbnb began as a good idea; a way to generate supplemental income by renting out a spare room in a primary residence while providing guests with a “local” experience. It has grown into a service that reduces the availability of rental properties. It facilitates tax avoidance thus reducing tax revenues needed to support public services while creating problems for local communities. In Vancouver a University of British Columbia study found that 77% of local Airbnb revenue comes from properties that are not an owners’ primary residence. Landlords are getting into the hotel business without paying tax on this income or charging hotel taxes.

REGULATING AIRBNB Cities are taking action to regulate Airbnb

RENTALS

Condo corporations typically enter a service agreement with a pest control contractor. When arriving on a property for periodic checks, pest control contractors should be provided with a list of known or suspected problems. Condo residents should be reporting suspected problems as noticed so they can be addressed before an infestation worsens or serious damage occurs. Most non-professional remedies for pest infestations don’t eliminate the problem. They are more likely to relocate a problem to another area of the building. Pest control professionals employ

more permanent solutions that can eliminate problems. Nobody likes bugs in their building. Particularly troubling are those pests that can destroy buildings. While it is impossible to eliminate all pest-related problems, watching for telltale signs and removing as many risk-factors as possible will help to avoid the most serious problems.

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Protecting condo property requires that condo owners and management be proactive. This involves dealing with trespassers. People can be attracted to condo property for numerous reasons. Buildings located near a school, mall or other hangout may offer railings that entice skateboarders, large open space for throwing a Frisbee or outdoor seating. In urban areas transients may seek shelter at night or during inclement weather. The condo corporation has an obligation to ensure those on their property are “reasonably safe”. Trespassers on a condo property can be a legal liability to the condo corporation. They can cause damage to common areas or individual suites. Individuals on condo property without a legal right to enter the property or refusing to leave when

requested to do so is an offence punishable by a fine of up to $2,000 per the Trespass to Property Act – Section 2. Proactive approaches to protecting the physical property include fences and landscaping that serve as a border to deter undesired access. Signs can be posted to identify prohibited activities such as skateboarding or soliciting. Ignoring these signs and refusing to leave a property is reason to contact police to have an individual removed. Security cameras can be helpful in identifying disruptive individuals. A letter can be sent to a known trespasser informing them that continued trespassing will result in police being contacted.

TRESPASSING ON CONDO PROPERTY

SECURITY, SAFETY & FRAUD

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Foreigners secretly buy the majority, and best, condo properties and are the cause of recent price increases throughout the city. This is the fiction some have chosen to believe. A Window Into the World of Condo Investors, jointly published by Urbanation and CIBC, provides data about who is purchasing condo properties. According to this report, condo purchasers are more likely to be local immigrants between 40 and 60 who have purchased property as a presale to help their children or as an investment. They typically rent out the property for a number of years to help pay down principal. The report highlights risks in condo investing. Condo investors can lose more than $500 per month when renting a property. Price appreciation, despite being strong for the past couple of years, is unlikely to compensate for these monthly losses. Among the findings in this report:

Of all condo units purchased in the GTA last year, 48% were purchased by speculators – local investors intending to resell at a higher price.

About 10% of condo investors are international buyers.

Just over 20% of condo investors purchased the property with no mortgage.

44% of investors with a mortgage that took possession in 2017 are in a negative cash flow position - rental income less than mortgage payment (principal + interest) and condo maintenance fees. Among investors with

positive cash flow, average monthly net income was about $360. Excluded from these amounts are closing costs, land transfer taxes, property taxes, taxes on rental income and repairs. Cash flow position presumes these properties are never unrented.

Read A Window Into the World of Condo Investors or click here for pdf file.

TORONTO’S CONDO INVESTORS

CONDO MARKETPLACE

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Parking garages are typically concrete and steel structures which provide space and shelter for vehicles. They are subject to wear and tear from regular use and environmental stresses. Vehicles that enter the garage leave behind oil, water and various contaminants. They track in salt and de-ice products during winter months. These products can corrode a parking garage structure. Water can infiltrate from outside into a parking structure causing further damage. Brown & Beattie is an engineering company specializing in building restoration and improvement. Jeremy Nixon, P. Eng., BSSO of Brown & Beattie Ltd., advises that “Regular maintenance can mitigate these factors by keeping water and corrosive materials away from the steel and concrete. When warning signs of damage are ignored and proper maintenance is not undertaken, problems become more serious and repairs more costly.” Signs of parking garage degradation:

Ponding water inside the garage

Expansion joint failure

Damaged, spalled or delaminated concrete

Leaks

Exposed steel

Proper maintenance will extend the life of your parking garage systems and likely defer the need for more costly restoration.

PROTECT YOUR PARKING GARAGE

BUILDING MANAGEMENT

Spalling can occur when water enters brick, concrete or natural stone and forces the

surface to peel, pop out or flake off

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Proper record keeping is a necessity for good condo corporations. Without proper records there is no way to know the financial strength of a condo corporation, where money is being spent or if it is being stolen. Financial information includes bills, bank statements, investment records, invoices and tax records. Combined they present a picture of the overall financial health of the condo corporation. The most important information to monitor is condo fees received and cash balances in the bank or elsewhere. Next in terms of importance are long-term unpaid invoices, reserve fund expenditures and balance, unusual items such as overtime or special repairs, accounts payable and receivable, upcoming capital projects, and profit and loss statements which should be compared with prepared budgets. Monthly reporting of this information is essential. Typically, these records are provided by the condominium manager or management company. The treasurer should be reviewing these documents which are typically available two or three weeks after the end of each month. Problems tend to arise when there is a lack of reporting or reports are not reviewed. Regular reporting makes it easier to identify changes from the norm. Higher than expected spending in one area or an unanticipated drop in cash balances should result in questions being

asked. Unacceptable answers suggest potential problems that should be delved into. Trends should identify a pattern of increasing spending or revenue declines that can be addressed before financial losses occur. A smart and active treasurer is crucial to monitoring the financial status of a condo corporation and identifying problems before they become serious. Condo owners also have a responsibility. Financial records are available to condo owners who should also be reviewing them on a regular basis. It is their money and how it is used that is recorded in these documents. Unfortunately, most condo owners are not interested in reading and understanding financial records. Financial records should be retained for at least seven years. Where storage space is an issue, older records can be stored in electronic format so they can be referenced as needed.

FINANCIAL RECORD KEEPING FOR CONDO CORPORATIONS

FINANCIAL MANAGEMENT

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Running water can be soothing. The sound of waves can help people sleep. When it comes from a dripping faucet or leaky toilet tank, however, water can be expensive. At any given time the American Water Works Association estimates that 20% of all toilets leak. These leaks are either not of concern or have yet to be identified. A leaking toilet can waste 25 times more water than a shower leak and four times more water than a faucet leak. A leaking toilet can waste up to 250 gallons per day or more than $100 per month. A 300 suite condo building may have 500 toilets of which 100 may have leaks. This amounts to an estimated $10,000 per month or $120,000 per year wasted because of leaking toilets. Leaking showers and faucets add to this cost. With so much money at stake it is surprising that more condo corporations don’t take measures to stop the loss. Internal components of a toilet wear out over time and require replacement. A damaged flapper, float, lever or chain periodically needs to be replaced or recalibrated. Toilet bowl cleaners, many of which contain chlorine and other chemicals, can cause flappers to prematurely wear out. These cleaners should be avoided in toilets unlikely to be used for a period of time after cleaning.

An easy way to determine if your toilet is leaking is to insert a couple of drops of food colouring in the tank. Wait 30 minutes then check the bowl. Coloured water in the bowl means a running toilet leak. One way to efficiently check all suites for toilet leaks is to have an annual check on all toilets. This may be described as a plumbing audit where toilets, showers and faucets are checked for leaks. A plumbing audit can be undertaken by building employees or a qualified plumber. Identified problems can be immediately rectified, likely at a cost less than that of the water being wasted. For the technology-inclined, the Toilet Scrooge is an electronic device that sits at the base of the toilet. It monitors toilet fill cycles, times of use and flushes per day. This wireless device allows management to know when small leaks start and deal with them before they become big leaks.

COST OF WATER LEAKS $120,000 per year down the drain!

BUILDING MANAGEMENT

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On June 7, Toronto will join the rest of Ontario and elect a government to represent them. As has been our practice, Toronto Condo News identifies those issues specific to Toronto’s Condo Community. Over the past few years elected politicians have failed to respond to Toronto Condo News’ inquiries on condo-related matters. For those in Toronto’s condo communities that choose to vote based on condo-specific issues, this alone may provide a partial answer as to how you should vote. Two current condo-specific issues that may affect local elections are the Amended Condo Act and Condominium Authority of Ontario (CAO), and elevator servicing. Amended Condo Act and Condominium Authority of Ontario Virtually all agree updating the Condo Act was necessary. This revision included creation of the Condominium Authority of Ontario and mandated it be funded by a monthly fee paid by all condo owners. Some support this approach and work done by the CAO. Others question the need for the CAO and its funding by way of a tax on condo owners.

Recent changes to the Condo Act supporting Electric Vehicle Charging Systems in condo buildings and new CAO documents in support of this government priority, despite lack of enthusiasm for electric vehicles in general, is another possible indication priorities are amiss. Elevator Servicing Mr. Han Dong, MPP for Trinity-Spadina, is deserving of being singled out as damaging the Toronto Condo Community through his sponsorship of what many feel to be a poorly-considered bill regulating elevator servicing. If passed, this bill appears impossible to enforce without adding to condo maintenance costs. Mr. Dong failed to respond to Toronto Condo News’ inquiries after proposing this bill. When going to the polls on June 7, the Toronto Condo Community has an opportunity to control the outcome of elections by voting for politicians favourable to its interests. Your interests are best served by making an informed decision.

WHO TO VOTE FOR IN 2018

ELECTION 2018

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Condominiums have evolved from a strictly residential form of housing. Today they include not only residential living but retail plazas, hotels and office buildings. As with residential housing, all are individually owned. Common elements such as roof, hallways, parking and landscaped areas are maintained through common fees. Regardless of form, all condos are governed by the Condo Act.

An innovation encouraged by city planners is the creation of mixed-use developments. In addition to residential housing, a mixed-use development may include any number of private businesses or services such as restaurants, supermarket, day-care, school or exercise club.

Rather than isolating residential housing from services or businesses, communities have developed where residential housing within easy access to the services people require has become desirable. This facilitates community and places less strain on community resources such as transit. It promotes livability by making an area more enjoyable to live in.

People are happier when they have access to services and entertainment without having to travel a distance. Business use may entail added complications such as exclusive protections preventing identical or similar businesses from opening within the condo corporation. All parties benefit from a successful mixed-use development. Businesses benefit from customers who reside within walking distance. Residents improve their lifestyle when they benefit from access to what they require or desire without travel or unnecessary cost. Mixed-use developments are here to stay. They combine residential housing with a range of services desired by the local community. This is a win-win scenario that will continue to evolve.

EVOLUTION OF TODAY’S CONDOS

DEVELOPMENT & INFRASTRUCTURE

Source: City of Toronto

Toronto Condo Towers are Growing

June 2018

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The delivery of electricity has become so efficient that we take it for granted. It is there whenever we turn on a light switch or plug something into an outlet. It runs our elevators, delivers our heat and keeps us cool. The only time we take note of electricity is when its cost rises. Electricity is one of, if not the, largest items in a condo corporation budget. Understanding where it comes from and how it is used is an integral part of condo management. Much of Toronto’s electricity comes from Niagara Falls. There is a transmission system for transporting this electricity from where it is generated to where it is consumed. Maintaining this grid is expensive. Failures in the grid can result

in power outages that shut down lights, elevators and anything else that requires electrical power. On-site power generation is used by businesses that find periodic power failures unacceptable, and in healthcare facilities where life-saving medical procedures are done. Increasingly, condo corporations are looking at on-site power generation. Initially, it was in the form of diesel generators to provide temporary power so buildings could evacuate during an emergency. In 1984 emergency power generators were incorporated into the building code to ensure life safety systems remained operational. In the 2000s Ontario no longer required on-site fuel storage for emergency generators. This allowed natural gas, a more reliable source of fuel, to be

ELECTRICITY GENERATION Alternatives to purchasing electricity

CONDO EDUCATION

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used for emergency power generators. Natural gas generators have a continuous supply of fuel allowing for continuous operation. The term “sustained occupancy” is used to describe emergency power systems that allow people to remain in high-rise buildings rather than forcing evacuation. Most alternate sources of energy are impractical for high-rise buildings. These include solar, wind and wave technologies. While each can provide some power, none provide sufficient power to sustain a high-rise building. Fuel cells are sometimes considered as a way to store excess

energy generated from other sources for use when needed. Experience has shown that these are not an effective source of long-term power backup. Cogeneration, combined heat and power (CHP), is the production of electrical and thermal energy from one fuel source. Waste heat from electricity generation is recovered and used for applications such as space heating or water heating. These systems are located closer to where the power is used, and can be incorporated into a condo building’s HVAC system. Where used, electricity generated through cogeneration costs less than when purchased from the power grid.

DECONVERTING CONDOS

CONDO EDUCATION

As demand for rental housing increases, developers in some cities are trying to convert older condo buildings into apartment buildings and offering rents lower than in higher quality condo buildings. For decades the trend has been to convert rental apartment buildings into condo buildings. This was fueled by higher home values, easy financing and people willing to purchase condos with low down payments. Now the trend appears to have reversed. Today it is harder to obtain loans for purchasing a condo and the market is slowing. Others question the viability of repaying a large mortgage. Interest in renting has increased. The is called deconversion. In some cities developers will purchase all units in a building, fix up the building and rent suites at higher prices than investor-landlords charge.

ELECTRICITY GENERATION… CONTINUED FROM PAGE 16

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June 2018

Parking spaces in Toronto condo buildings can sell for up to $60,000. In buildings with a shortage of parking spaces, bidding wars can occur. Yet this is a bargain compared to London, England and New York City where parking spaces can sell for over $1 million. Newer condo buildings have fewer parking spaces than suites. Some have no parking spaces. As with parking spaces, locker space is at a premium in some condo buildings with lockers selling for up to $10,000. When selling a condo locker or parking space there may be restrictions. Some declarations may not allow parking spaces or lockers to be sold. Others may limit the sale to suite owners in the building. One reason for restricting who can purchase lockers and parking spaces is security.

The availability of parking and lockers in a condo building is dependent on location. Buildings in the downtown area are less likely to have as much parking as suburban condominiums where there is greater dependence on owning a car and less convenient transit. Downtown residents have easier access to transit, car sharing services, bicycle rentals and dedicated bike lanes. Even when parking and lockers are available in a new condo building, they are being sold separately. When purchasing a condo, a parking space and car can add up to $1,000 or more per month inclusive of additional mortgage costs, vehicle financing, insurance, gas and maintenance.

SELLING CONDO PARKING SPACES AND LOCKERS

CONDO EDUCATION

PROTECTING NON-SMOKERS

MEANS BANNING SMOKING

According to a Center for Disease Control and Prevention (CDC) study, “Completely eliminating smoking in indoor spaces is the only way to fully protect non-smokers from SHS [Second Hand Smoke]; Separating smokers from non-smokers, cleaning the air, and ventilating the building do not completely eliminate SHS exposure.” The United States Surgeon General and study results conclude there is no safe level of second-hand smoke. Click here to access the study.

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Long board meetings are an indication that something is amiss with your condo board. Board meetings are not social events. They should focus on action and avoid unnecessary conversation. Overly long board meetings likely result from unnecessary discussions about issues for which directors lack knowledge or expertise. This includes commentary on engineering issues and financial planning where none have the requisite expertise to speak with authority on such matters. Effective board meetings remain focused on problems and their resolution. Where decisions are difficult and information is lacking, people like to talk. This is easier than taking action and being accountable for decisions. Most agenda items come down to three considerations:

What is the problem you are trying to solve?

What information is needed to make a decision?

How can the information be obtained? Superfluous conversation provides little of value. Good decisions require a proper evaluation of the situation by someone with experience. Decisions made without some level of experience are ill advised. If the problem is water infiltration, it is likely that no

board member has the expertise to address the issue. It makes more sense to bring in qualified expertise and have them report their findings to the board. This requires that directors, or management, speak with the right people. These individuals may be board members, building residents, condominium manager or external expertise. Directors should focus on obtaining the expertise to obtain desired information. External expertise can and should be directed to provide options and a specific recommendation for directors to consider. Once desired information has been obtained directors are in a position to consider tangible implications. There are only three possible options to consider. 1. What happens if we do nothing? What are the

short- and long-term implications? 2. What happens if we repair the damaged system

or rectify a perceived problem? What are the short- and long-term implications?

3. What happens if we replace a damaged system? What are the short- and long-term implications?

Directors that focus on making decisions and moving to the next matter make more efficient use of limited board meeting time. They avoid discussing hypotheticals with or among people unqualified to provide recommendations for a solution. Their primary interest is to obtain real information, rather than opinions, as early as possible and then make a decision.

AVOID FOUR HOUR BOARD MEETINGS

CONDO BOARDS

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June 2018

Like hotels, condo corporations can and perhaps should expend more effort to generate incremental revenues by providing services to the community. Condo corporations have amenities similar to those of hotels which may be desirable to the local community. These amenities may include a swimming pool, exercise equipment, rental suites or party room. While intended for resident use, underutilized spaces can be made available to the community with revenues being utilized for the condo corporation. Westin hotels offer a “running concierge program” that is open to local residents. In association with a local running store, hotels organize a weekly 5k run followed by a post-run happy hour. The hotel benefits by making local residents aware of what the hotel has to offer. Offerings include catering and rental facilities for wedding parties, banquets and other events. Other community events

suitable for condo corporations include author readings, art shows and musical performances. Local artists can be brought in to explain their craft in a relaxed setting. Hotels reach out to the local community as a way to make people aware of their offerings and to obtain business through the programs they offer. These efforts include making lobbies and recreational spaces more inviting for those who want to relax or socialize. Condo corporations choosing to view their community in the same way as hotels can benefit by generating interest in whatever amenities or services they choose to make available to the community.

LESSONS FROM THE HOTEL INDUSTRY

COMMUNITY

629 King Residences, a new luxury condo building, is home to one of the longest outdoor swimming pools in North America and a luxury entertainment venue. Lavalle is a rooftop lounge situated above 629 King Residences. It includes a 155-foot long pool. This members-only lounge charges a $200 annual fee. The pool area includes breathtaking views of the city from all directions. There is a cabana, garden, DJs, ice cream parlour, juice bar and multiple bars. There is a 250-seat dining room for more formal dinners. Part of the pool can be covered for use as a dance floor.

LUXURY AMENITIES AT 629 KING RESIDENCES

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Hardwood floors are fashionable. They are also a challenge to noise control efforts in condo buildings. Sone condo corporations require that suites above the first floor be carpeted or have large area rugs that cover the majority of area. Exclusions may include kitchen and bathroom areas. To be effective, area rugs should be placed in spaces where people walk. When flooring is installed or upgraded, there may be a requirement that wood flooring include an underlayment that meets a minimum standard of sound transmission control. Such rules exist to help address noise issues which are one of the most common complaints in condo buildings. They are intended to reduce transmission of noise from one condo suite to another.

Noise can be transmitted through floors from people walking while wearing shoes, particularly women’s high heels and leather-soled shoes. Loud music, banging and jumping can also be transmitted through floors and walls. Carpeting and padding offer a softer surface that helps prevent sound transmission from one suite to another. In the absence of carpeting condo corporations have implemented rules, such as those mentioned above, to serve this same purpose.

HARDWOOD FLOORS AND NOISE CONTROL

RENOVATIONS

June 2018

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Condo corporations are a target for cyber-thieves. A survey by CFO magazine found that 20% of mid-sized companies were victims of cyber-attacks. Condo corporations fall into this category. These cyber-attack victims all have one thing in common; money and information. Cyber-thefts are about gaining access to information that includes bank account access data, credit card numbers and e-mail addresses. This information is used to obtain more information, identity theft and access bank accounts. Condo corporations are attractive targets because their bank accounts contain a substantial amount of money. They also have access to banking and personal information for condo owners. Equally important, they are less likely to have sophisticated cyber-security in place. This makes condo corporations a lucrative and vulnerable target. Losses from cyber-theft can be significant.

Condo corporations have no protection against cyber-theft. If theft involves use of a legitimate passcode to access accounts the bank is unlikely compensate for losses. Insurance protection may also be limited. The best defense against cyber-theft is to reduce the risk. √ Change passcodes on a regular basis. √ Update virus protection software frequently. √ Secure computers, and networks, using available

password protection. √ Develop a formal written policy for managing

personal information that includes what information is to be obtained, how it is stored, how long it will be retained and how it will be destroyed.

√ Don’t collect more information than is necessary.

√ Limit access to personal information. √ Do not send personal information via e-mail.

CYBER-THEFT RISK TO CONDO CORPORATIONS

SECURITY, SAFETY & FRAUD

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In some areas, particularly popular tourist areas, short-term condo rentals are out of control. Tourists are not at fault. They are unaware that some condo buildings have rules prohibiting short-term rentals. They would not be aware of condo rules to protect residential condo living. While those renting properties in contravention of condo rules and by-laws are at fault, so are condo management and directors who fail to abide by condo rules and by-laws. Those renting condo suites for short-term use may describe their clients as visitors or guests as a way to confuse the issue and justify their actions. Listings for short-term rentals don’t identify properties as condo buildings. Tourists have no obligation to abide by condo rules or by-laws. When on vacation they are likely to treat a condo suite as if it were a hotel or private house. These visitors or guests may be vacationing tourists. In addition to seeing the city, they may be boisterous or have late night parties. They may spend the day lounging around a swimming pool or working out in the exercise room. Support for tourists may include greeters and cleaners who require access to the property both before and after each short-term rental. Garbage must be cleaned up and disposed of. Increased wear and tear on a building requires added maintenance. Peaceful residential living is disrupted by this

commercial use of residential condo properties. Higher costs to maintain this commercial use requires higher condo fees. Listings for short-term condo rentals may describe the property in hotel-like terms. They may promote recreational features such as a swimming pool, exercise room, laundry services and other available amenities. Commercial promotion and use of amenities supported by condo fees and inconsistent with condo corporation documents is expected to be controlled. In residential homes people need to sleep. They may be up early to work the next morning or have other obligations. Those on vacation have a different set of priorities. When purchasing a property in a condo building, there is an obligation to abide by condo documents intended to protect common areas and use of residential properties. Where condo documents do not allow for short-term rentals, this is intended protection for residential living and notice to those who intend to use a condo suite for other purposes. This includes ensuring that condo fees are not being siphoned off to support a rental operation in violation of condo corporation rules. Those using condo suites as illegal hotels make a decision to ignore condo rules and by-laws by which their property is governed. Condo management and directors have an obligation to enforce their governing documents or change them.

SHORT-TERM CONDO RENTALS OUT OF CONTROL

RENTALS

June 2018

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Politicians running for election in federal, provincial or municipal elections have the right to canvas on condo corporation property during election periods. Section 118 of the Condo Act allows election candidates to canvas on condo property.

The Canada Elections Act allows canvassing from 9:00 am to 9:00 pm. The Canada Elections Act states ”no condominium corporation or any of its agents may prohibit the owner of a condominium unit from displaying election advertising posters on the premises of his or her unit.” There is no mention of access to common areas for posting posters or signs.

ELECTION CANVASSING - 2018

No corporation or employee or agent of a corporation shall restrict reasonable access to the property by candidates, or their authorized

representatives, for election to the House of Commons, the Legislative Assembly or an office in a municipal government or

school board if access is necessary for the purpose of canvassing or distributing election material.

CONTINUED PAGE 25 ….

CONDO EDUCATION

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Elections Ontario includes the following requirements:

At least one person seeking access must be at least 18 years of age;

Every person seeking access must, on request, provide valid identification; and

Every person seeking access who is not a candidate must, on request, provide a valid Canvasser Authorization Form (Form F0436) from the candidate.

Penalties for denying access may be assessed the following penalties:

$500 for the first contravention by the owner or condominium corporation

$1,000 for the second contravention by the owner or condominium corporation

$2,000 for the third and any subsequent contravention by the owner or condominium corporation

Canvassers who feel they’ve been wrongfully denied access to a multi-residential building must leave a Notice of Denied Access form at the property. The condo corporation generally has 24 hours to provide access to the property before the canvasser can file a Report of Denied Access.

Canvassing Signs

Federal

Canada Elections Act Permits canvassing between 9:00 a.m. and 9:00 p.m. unless well-being of residents is at risk. Condo Act Reasonable access to property must be permitted.

Canada Elections Act Allows owners to post signs on units allowing conditions on size and type. Condo Act May prohibit signs on common elements if in declaration or rules.

Provincial * See Ontario canvassing requirements and penalties below

Election Act Ontario Permits canvassing between 9:00 a.m. and 9:00 p.m. Monday to Friday, or 9:00 am to 6:00 p.m. on Saturday or Sunday. Condo Act Reasonable access to property must be permitted.

Condo Act May prohibit if stated if in declaration or rules.

Municipal

Condo Act Reasonable access to property must be permitted

Condo Act May prohibit if stated if in declaration or rules.

CONDO EDUCATION

ELECTION CANVASSING - 2018… CONTINUED FROM PAGE 24

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