Trend Watch: Ontario’s Mixed-Use Developments

Ontario Mixed-Use Developments

Recent data from the Toronto Regional Real Estate Board (TRREB) showed a steep 69% decline in home sales in early April, compared to the same time last year. Similarly, the number of new listings had also fallen 63.7%. One thing remains unchanged, however: housing prices.

Given the current economic climate caused by the pandemic, those in hopes of finding low housing prices are met with dismay as the average selling price for all home types in Toronto reached $885,371, a 3.7% decline compared to the same period last year. The Greater Toronto Area (GTA) housing market remained flat, with an increase of 0.1% to $821,392 for the same period over last year.

As housing prices in the GTA remain high, an increasing number of people are looking for alternative, affordable options outside of the city’s core. The biggest obstacle to overcome for these home buyers is how to live outside of the city without compromising their lifestyles. The answer is suburban self-sustainable mixed-use developments.

Revitalizing Suburbia

Many first-time home buyers and millennials are not willing to spend a fortune on small studios in the heart of downtown Toronto. Location is no longer a top priority for home buyers, according to Point2Homes Real Estate news. Today’s buyers value affordability, ease of access to work and entertainment, enough space to meet their needs, and modern features and amenities. Developers are responding by revitalizing some of Ontario’s oldest suburbs with large mixed-use developments.

Dubbed as “Hipsturbia,” Toronto developers are presenting walkable, condensed neighbourhoods with condo towers, restaurants, bars, cafes, and retail shops which create a familiar city vibe outside of the city. They are hoping to attract millennials into these otherwise unattractive neighbourhoods by providing easy access to public transit and a robust communities.

“Downtown Toronto is going to continue to thrive, but I think subway connected, suburban-urban locations are going to see a bit of a rebound in the next three to five years,” predicts Sean Menkes, director of office and retail at Toronto-based Menkes Developments Ltd.

“It’s a huge trend in the U.S. and it’s exactly what we’ve been planning for the last few years” said Jared Menkes, executive vice president of high-rise residential for the family-owned firm. “We’re bringing what we know downtown and bringing it to the suburbs.”

Development Highlights - Vaughan, ON

Menkes is teaming up with public-pension manager British Columbia Investment Management Corp. to develop an urban pocket in Vaughan, a suburb just north of Toronto. Construction for Mobilio started in 2019. This mixed-use development is an ambitious master-planned community with 12 phases, 40 buildings, and 10,000 residences. Phase 1, called Festival, is scheduled for completion in mid-late 2022 and will showcase a four-tower development and 85,000 square feet of retail. Residents can expect lots of outdoor play areas and walking paths, restaurants, shops, entertainment activities, top of the line amenities, and direct access to facilitated transit.

A rendering of “Festival” – Phase 1 of a master-planned community in the suburbs of Vaughan, north of Toronto.

Development Highlights - Mississauga, ON

Another exciting mixed-use development to look forward to is Mississauga’s Square One District by developer Oxford Properties Group and their partner Alberta Investment Management Corp. Claimed to be the “the largest mixed-use downtown development in Canadian history,” Square One District will begin construction in the summer of this year with expected occupancy to begin in 2024.  In this plan, they will be turning 135 acres into an 18 million square foot neighbourhood for 35,000 people, a dramatic boost to Mississauga’s population which is expecting a spike over the next 20 years, according to Mississauga Mayor Bonnie Crombie. This plan will host 37 towers, more than 18,000 residential units, office and retail space making it a “high density living and working zone.”

Square One District
Aerial view of The Strand, the transit-connected and pedestrian-friendly heart of Square One District.

Development Highlights - Ottawa, ON

Further North, the board of directors for the National Capital Commission (NCC) in Ottawa has approved a preliminary version of the LeBreton Flats master plan, which will include the redevelopment of 4 districts just west of Parliament Hill. Of the 24-hectare site, the commission is looking to have 44% parks and open spaces. The remainder will feature 4,000 residential units, 116,000 square metres of office space, and 21,000 square metres of retail space. The NCC describes Lebreton Flats as, “a place that is pedestrian and cyclist friendly, surrounded by lively and active parks and plazas, including the dynamic Aquedect District, the Ottawa riverfront and a large destination park.”  City of Ottawa Mayor, Jim Watson stated, “Ideally, we need to find things that attract visitors and complement the museums and monuments that are in that vicinity and it needs to be a destination for live, work and play and not just live.”

Lebreton Flats
Urban playground in Ottawa’s ambitious master redevelopment, Lebreton Flats, just west of Parliament Hill.

The Ontario Condo Act states that all corporations should maintain insurance equivalent to total replacement cost value for their property. During construction, Course of Construction insurance is required. However, upon completion and prior to the first occupancy, either the developers or the Condo Corporations must acquire Property Insurance for full replacement cost. Normac is Canada’s leading insurance appraisal provider. We are accredited appraisers who specialize in determining replacement cost value for all types of properties, including large mixed-use developments. Request a quote today.

 
Cover image from Cision in Canada, Oxford and AIMCo unveil Square One District, a new 130-acre 35,000-person mixed-use community in the heart of downtown Mississauga:
https://www.newswire.ca/news-releases/oxford-and-aimco-unveil-square-one-district-a-new-130-acre-35-000-person-mixed-use-community-in-the-heart-of-downtown-mississauga-818669612.html

Many Uninsured in Fort McMurray Flooding

Fort McMurray Flooding

On Sunday, April 26th, the rapidly thawing Athabasca River near the Regional Municipality of Wood Buffalo saw rising river levels escalate to full-fledged flooding in downtown Fort McMurray. By Monday, April 27th, close to 13,000 people had been evacuated from their homes.  As of May 1st, it is expected that more than 1200 building were impacted by the Fort McMurray flooding and that a boil water advisory could be in place until as late as September 2020. All of this comes after the 2016 wildfires devastated the community and amidst a global pandemic already impacting many businesses and residents.

Living On A Flood Plain

Much of Fort McMurray is built in a floodplain and while a flood of this measure hasn’t been recorded in 100 years, there have been 15 notable floods since the 1830’s. In 2019, plans were finally underway to improve flood defences in the area. The Regional Municipality of Wood Buffalo had started work on raising a road adjacent to the Clearwater River; it’s purpose to act as both a dike and a major arterial road. To date, $6.5 million of a planned $136.5 million had already been spent on flood mitigation, including building flood walls and berms.  Intentions to make Fort McMurray a walled city have now been thwarted.

This begs the question, why would perfectly rational people continue to build in an at-risk area. Based on extensive research conducted by the Globe and Mail, approximately 40% of the structures in the Lower Townsite and Waterways are directly in harm’s way.

Merwarn Saher, Alberta’s former Auditor General claims that politics are too blame. Despite Alberta Environment mapping out 48 flood hazard areas, including the low lying Downtown in Fort McMurray, the province leaves floodplain regulation to municipalities.  The hazard areas remain undesignated as off-limits to development due to a lack of community support. The problem is compounded by local officials who wish to revitalize the communities and can’t resist the income incentives generated by property development fees and annual property taxes. This is a common problem which can be seen in other parts of Canada, including Fredericton and Ottawa. “Meanwhile, it’s the provinces and the feds who get stuck with most of the tab for helping flooded communities recover.”

The Mayor of the Regional Municipality of Wood Buffalo, Don Scott, says, “More work needs to be done to keep the lower townsite as protected as we can make it. Council is going to have some pretty serious decisions to make about what steps we’re going to be taking.”

Most Uninsured For Floods

Mayor Scott claims that most of the community does not have any flood coverage or were vastly underinsured. The Insurance Bureau of Canada explains that overland flood coverage is not included in standard policies and typically not available to those in flood hazard areas at all. This means that not only will funds for repairs to buildings be unavailable, but there will be no payouts for any additional living costs associated with displacement, unemployment, or other consequences of the flood.

Monica Ningen, Swiss Re’s president and CEO of Canada & English Caribbean, told Canadian Underwriter, “If flood insurance is available to these properties, it is prohibitively expensive, reflecting the high probability for damage. For these high-risk properties, a mechanism to subsidize part of the premium would be required to make it affordable. This could be achieved through a partnership between the industry and the government.”

Mayor Scott is quoted in the Fort McMurray Today, “There’s a lot of damage and not a lot of coverage…Without federal and provincial help in this situation, there are going to be people facing financial ruin.” The Alberta Premier, Jason Kennedy, believes that the Northern Alberta flooding disaster will meet eligibility criteria for a Disaster Recovery Program, as a one-in-100-year flood event. Mayor Scott estimated on May 4th, that there was more than $100 million in damage.

Insurance Repercussions of 2016 Fires

The evacuation order from the floods ended on May 3rd, the four-year anniversary of the evacuation caused by the 2016 wildfires. 80,000 people were ordered to leave Fort McMurray as flames engulfed almost 2400 structures. The 2016 Fort McMurray wildfires are the largest insured catastrophe in Canadian history, estimated at nearly $4 billion.

Despite the fact that many were able to rebuild after the fires, there are others who are still in ongoing battles with insurance providers. For the condominium community, difficulty to obtain coverage has been exasperated by a nationwide hard insurance market. While condominium corporations are required to insure all units and common property to replacement cost value, according the Alberta Condominium Property Act, this hasn’t been possible for all condo boards and people are losing their homes because of it.

The Cedarwoods condo corporation saw their insurance premiums increase in 2019 by 650% following claims related to the 2016 wildfires. The policy they secured cost $925,000 and only covered one sixth of the total appraised value. The Winchester Greens condo corporation is in a similar situation where 2019 quotes jumped 800% over their 2018 premiums and for only one third of the coverage. Kathy Bowers, owner of property management firm, Fort Management, claims that in light of insurance premium increases and declining property values, many owners have no other choice but to hand over their homes to the banks.

A Perfect Storm

Between the 2016 wildfires, record low oil prices, COVID-19, and now the flooding, the devastation for this community is unfathomable. In neighbourhoods like Waterway, residents are looking at a second or third rebuild after the 2016 fires and summer floods of 2013. “Few have had the misfortune of being hit more than once by natural catastrophes, but that’s the case for many of the residents in Fort McMurray,” Ningen told Canadian Underwriter. 

The road to recovery for the Fort McMurray community is long and uncertain. There is no simple solution given the risks of living in the boreal forest and a flood zone. Rob de Pruis of the Insurance Bureau of Canada explains, “There’s some really big global economic factors that are also coming into play here as well that we may not have as much control over.” The municipal government of Wood Buffalo is calling on Provincial and Federal governments to step in and find a solution.  Alberta Finance Minister, Travis Toews, confirms that the government is working with insurance providers and has requested that they “work to find solutions for condominium owners in the region.”

At Normac, we are expert insurance appraisals and can assist you in determining your total replacement cost value. Have peace of mind that you are sufficiently covered during a catastrophe. Request a quote today. 

 

Cover image from Fort McMurray Today, Volunteer efforts save Heritage Village from flooding, Heritage Shipyard sees significant damage:
https://www.fortmcmurraytoday.com/news/local-news/volunteer-efforts-save-heritage-village-from-flooding-heritage-shipyard-sees-significant-damage

COVID-19 Disrupts The Canadian Construction Industry

COVID 19 Disrupts Canadian Construction

As we are now six weeks into a world-wide pandemic, we are looking at the Canadian construction industry to see how they are coping and what we can expect in terms of progress and costs. As an essential service, many sites forge on, but the decline in the availability of workers, accessibility to key construction materials, and delays associated with adapting site safety measures, are all leading to major disruptions across the industry.

About Canadian Construction

The construction sector is one of Canada’s largest employers and a significant contributor to the country’s economy. The industry employs more than 1.5 million Canadians and contributes to 7 per cent of Canada’s Gross Domestic Product (GDP). In March, the Canadian Construction Association (CCA) released it’s standardized protocols for all Canadian construction sites – a living document that is updated with the guidance of public health authorities. It highlights best practices and a consistent national approach to protect the well being of all those in the industry.

An Essential Service

Many job sites across the country have remained open and are subject to the recommendations set out by provincial governments across Canada. Mary Van Buren, President of the CCA is quoted in a March press release,

“The projects we deliver are fundamental to Canadians’ quality of life and to the success of our country. In many cases, they support the delivery of essential services, including the clean water we drink, energy infrastructure and the power grid, critical transportation infrastructure, and the hospitals and other health care facilities where we receive care.”
Public Safety Canada supports Van Buren’s claims and explicitly states which sectors of construction are essential on their website here. Yet, many provinces included commercial, residential, industrial, and institutional sectors in their lists of essential workers, including BC, Alberta, and Ontario.

Impacts on Construction Sites

Several provinces across Canada have declared a state of emergency, including Ontario, British Columbia, Alberta, Manitoba, and Nova Scotia. The provinces of Ontario and Québec have additionally issued all non-essential workplaces to be suspended until further notice. While in Québec, all residential construction has been shutdown between March 25 to April 20, some workers returned to residential construction sites to help the province avoid a housing crisis.  Exact figures are unknown as to how many private sector construction sites for residential and commercial use have remained open, but it is suspected that most have continued on despite disruptions and concerns from workers.

Reduced Productivity

The most obvious source of delay occurs from a full project shutdown, following a government order to suspend all work. Projects are experiencing low productivity due to understaffing and physical distancing. Physical distancing measures put forth by the federal government is restricting the number of people on-site and imposing an increased control of site movement. An example of this can be seen in developments where elevators and hoists are used; with only two workers at a time on a 40-storey tower trying to get to their floor[,] that’s an hour per person lost every day (minimum).

Worried Workers

The CCA claims that the construction industry already has “highly disciplined health and safety protocols” which are being “significantly amplified” based on recommendations put forth by public health officials. However, construction workers have voiced concerns about the inability to put the added protocols into practice. Jack Da Silva, an agent for Labourer’s International Union of North America (LiUNA) Local 183, was captured on video on an unidentified site in downtown Toronto stating,

“When you’re in the work site there, you guys don’t have six feet around you. We’re all breathing on each other. Where’s your eating facilities? Are they sanitized? Do you have water to wash your hands when you eat your sandwiches?”
A Labourers’ Union business agent’s video plea for safer site conditions in Toronto during the COVID-19 pandemic has been captured and broadcast.

After the recent outbreak at the Kearl Lake oil sands facility in Alberta, these concerns are legitimate and protocols need to be taken seriously and implemented to the fullest extent.

Supply Chains Affected

The disruption in supply chains is also putting a strain on construction projects due to restricted border access and limited manufacturers. While Canada has made efforts to keep supply chains open for trade and commerce, such as the Canada-US border, the decline in manufacturing from other countries is starting to have an impact.

In 2019, China was Canada’s second biggest source of imports, behind the U.S. (which supplies half of what Canada buys). However, much of the items that are imported to Canada from the US require materials which the US imports from China. At the peak of the Covid-19 pandemic, China had shut down factories which were responsible for producing 80% of it’s exports. The Port of Vancouver – a major hub for import goods has reported fewer container vessels due to reduced cargo-loading activities at Chinese ports. There will be a trickle down effect as we deplete our existing inventories, and despite China’s manufacturing beginning to pick up again, demand will continue to slow from it’s major trade partners in North America and Europe.

Dennis Darby of Canadian Manufacturers and Exporters (CME) said that manufacturers cannot shift their delivery models like other industries. “The production workforce can’t work from home. The local and international supply chains of production components will become restricted and their customers will limit purchases.”

Construction Costs

How construction costs will be impacted is still too early to be seen. It will depend entirely on how long the pandemic continues. The Altus Group has an interesting opinion piece on this that explains a short-term recovery from COVID-19 could see stabilized and perhaps even increased costs, whereas a long-term shutdown will see heavy declines. For a more detailed read, view the article here.

Final Thoughts

The construction industry and its costs are always fluctuating, similar to the fluid developments of COVID-19. The CCA is calling on the Government of Canada to issue a clear statement and work towards future legislation on how it will handle delays, project disruptions, and other costs incurred due to the outbreak. The construction industry plays a vital part in Canada’s overall economic health, so continuation of that sector is imperative for economic recovery. However, precautions must also be taken to ensure the safety of its workforce.

Normac is taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.

Cover image from blogTO, 3 Workers Test Positive For COVID-19 At Toronto Construction Site: https://www.blogto.com/city/2020/03/3-workers-test-positive-covid-19-toronto-construction-site/

COVID-19, The Canadian Economy, And The Housing Market

As Canadians enter their 4th week of a national shut down and physical distancing, we are beginning to see some of the effects on the Canadian economy. There has been an obvious downturn as businesses have closed their doors and workers laid off. While there are a few companies reporting growth during the pandemic, such as Canadian owned Dialogue Technologies and Loblaws, most are seeing steep declines and predictions of a global recession are looming.  While it is still too early to know what will happen or how we will emerge from this, here is a round of what experts are saying about the Canadian economy and how it will affect the housing market.

Canadian Economy - What Is Happening?

Economists and elected leaders agree that the COVID-19 pandemic is causing economic activity to slow and are acting proactively to curb anxiety for both businesses and consumers. The Government of Canada has unveiled a plethora of relief funds in support of small businesses and citizens; the Canada Emergency Response Benefit, subsidies for small businesses, increased childcare benefits, and support for students and vulnerable populations, just to name a few. The Government relief efforts topped $90 billion at the end of March and they have also been in discussion with major banks to further ease the burden on Canadians.

On March 27th, The Bank of Canada lowered the overnight rate to 0.25 per cent, down from 1.75 per cent in the 2nd week of March.  Other major banks have since announced that they will be lowering their credit card interest rates for customers under financial pressure caused by COVID-19 and offering Government backed loans for small businesses as early as next week.  This is in addition to their already implemented mortgage payment deferrals.

While these efforts will help many people during this crisis, critics wonder if it will be enough. Frances Donald, Chief Economist with Manulife Investment Management states that Canada’s economy was already showing warning signs in 2019 with a Q4 growth of only 0.3 per cent. Between a collapse in oil prices and a housing market bubble on the verge of bursting, Canada could have been already heading towards a mini-recession before the outbreak. Over 3 million people have applied for EI and the Emergency Response Benefit since the outbreak, setting “historic levels of devastation in the labour market.”

National Housing Market Trends

There is no single consensus on how COVID-19 will affect Canada’s housing market. Even prior to the outbreak, conflicting headlines about housing bubbles and whether or not we were in one shows that there is a dichotomy between those who anticipated a burst and subsequent recession, and those who believed that the Canadian housing market was generally balanced between supply and demand, despite regional differences.

Time will tell if Canada’s presumed bubble will burst over the following months, but what we know to be true is that the novel coronavirus is changing the way we buy and sell real estate. The Alberta Real Estate Association, in an attempt to minimize face-to-face interactions, has officially banned all of its members from conducting open houses and encouraged agents to use “virtual tours, video-conferencing and digital contract signatures.”

In addition to buyers and listers pulling back from the market, we are also starting to see fallout from lenders as mortgages get cancelled before closing dates. Ron Butler of Butler Mortgage claimed this happened to a client of his after the lender conducted a routine check and discovered the client had been laid off indefinitely. Bank analyst, Robert Hogue claims that the impact of physical distancing and an economic fallout could see home resales at a 20 year low.

Calgary, Toronto, and Vancouver – The Numbers

According to John Pasalis, President of Realosophy Realty in Toronto, Canada’s biggest markets were preparing for a “sizzling house-hunting season” prior to the virus entering Canada.  In February, we saw a 27% increase on home sales compared to February 2019 and a 15 per cent increase in the national average home price. Pasalis says, “that outlook has now dimmed.”

The Calgary Real Estate Board (CREB) claims that sales activity in Calgary has fallen 11 per cent in March 2020 compared to March of last year, the lowest level since 1995.  The number of new listings has also fallen 19 per cent. Chief economist Ann-Marie Lurie at the CREB is quoted saying, “This is an unprecedented time with a significant amount of uncertainty coming from both the wide impact of the pandemic and dramatic shift in the energy sector.” Because of this, Alberta is expecting price declines to be higher than originally anticipated.

In Toronto, Canada’s largest housing market, the first half of March recorded a surge in sales which were up 50% compared with the same period in 2019, highlighting the strength in Toronto’s housing market. However, after physical distancing measures were introduced in the latter half of the month, sales activity fell a significant 37% compared with a year earlier, and new listings had also dropped 33% from the 2019 figures.  As we are still in the early stages of the pandemic, Toronto Regional Real Estate Board (TRREB) president Michael Collins states that “sales figures for April will give us a better sense as to the trajectory of the market while all levels of Government take the required action to contain the spread of COVID-19.”

Similarities were seen in Vancouver where the first two weeks or March were recorded as the busiest of the year, according to the Real Estate Board of Greater Vancouver’s President (REBGV), Ashley Smith
. While March 2020 showed a 46 per cent increase over a record low March 2019, most of the sales were already in process before the Government of BC declared a state of emergency. By the end of the month, sales were 20 per cent below the 10-year average.

The Future Is Unclear

The most optimistic view at this point is that self-isolation will bring the pandemic under control so that businesses can re-open and workers can begin to return to their jobs by this summer. Doug Porter, chief economist at BMO Capital Markets, stated in a report, “We believe the fiscal steps are enough to help propel the economy into a forceful recovery in the second half of the year.” But this viewpoint is not shared by everyone.  Frances Donald is concerned that current programs, which are only in place for a three-month period, may not be enough if the majority of those laid off are not rehired. He is quoted:

“We are living through history that will end up in textbooks and case studies as we analyze central bank policy, how effective it is, how quickly central banks should be reacting, and whether or not we look back and say: ‘They acted too late,’ ‘too early,’ or ‘right on time.’”

From BNNBloomberg: https://www.bnnbloomberg.ca/rbc-cuts-prime-lending-rate-after-bank-of-canada-move-1.1400320

Normac is taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.

Coronavirus in Condos: Best Practices for Property Managers

social distancing best practices for property managers
As the COVID-19 pandemic continues, recommendations for our industry are constantly evolving. We have compiled a list of suggested best practices for Property Managers based on the information currently available. This is Pt. 2 of our series, Coronavirus in Condos.
“Wash your hands and practice social distancing.”

This message has been reinforced time and time again since the World Health Organization (WHO) announced COVID-19 a pandemic.   Property Managers are now facing an abundance of property related issues resulting from the novel coronavirus. Residents are spending more time at home, converting their homes into offices, and many are self-isolating. New precautionary steps are being implemented to stop the spread of COVID-19 and to ensure smooth day-to-day operations of Condo and Strata Corporations. Here are some of the recommendations being made.

Basic Condominium Protocol

Before diving in, it is important to lay out basic protocol that Property Managers should be implementing at this time. The Condominium Management Regulatory Authority of Ontario (CMRAO) states that condos should:

  • Provide alcohol-based hand sanitizers at main doors and elevators.
  • Display signs reminding residents and visitors to:
    • wash hands with soap regularly,
    • cough or sneeze into a tissue or your sleeve. Immediately dispose of tissue in a lined trash can and wash your hands,
    • avoid touching eyes, nose, or mouth, and
    • avoid contact with people who are sick.
  • Keep objects and surfaces clean and disinfected. Instruct cleaning teams to provide more focus on high-contact surfaces, such as front desk counters, door handles, or common areas.

Taken from: https://www.cmrao.ca/en-US/newsroom/blog/Coronavirus-in-Condos/

Notices to Owners

Property Managers should consider providing notices to tenants regarding the following topics:

  • Provide tips from and website information for the local public health authority, provincial Ministry of Health, and Health Canada, and request that residents comply with all recommendations.
  • Advise that resident should refrain from using the amenities (or close them all together) and minimize the use of the common areas, especially if they have recently travelled and/or exhibit any symptoms such as coughing or fever.
  • Advise that residents practice social distancing measures in common element areas such as lobbies, elevators, and other shared facilities.
  • Outline and communicate procedures for reporting to property management if the resident is in self-isolation or quarantine.
  • Reduce parcel deliveries by highlighting the difference between essential and non-essential items.
  • Remind residents of proper garbage disposal and preventing drain clogs and back-ups resulting from residents spending more time at home.

Service Provider and Contractor Best Practices

Before issuing work with service providers and contractors, Property Managers should consider the following precautions:

  • Discuss what steps are being taken to minimize the chance of exposure for residents, including ensuring that any representatives who have recently travelled to affected areas are not sent to the site.
  • Discuss what measures may be taken if representatives will be entering a unit to perform duties, to address any health concerns of the residents and of the workers.

    *Note that in response to COVID-19, Normac has opted to temporarily suspend ALL interior site inspections until further notice and has provided our clients with alternative solutions.*

  • Consider postponing non-urgent work where appropriate.
  • Discuss with all service providers whether or not any disruption in service is anticipated, including any disruption due to employee absence or supply disruptions.
  • Discuss with onsite staff, such as maintenance staff or concierge, any concerns they have relating to the safety of the workplace and encouraging all workers who feel ill to stay home.
  • Incorporate social distancing measures for over-the-counter communications with onsite staff.
  • Review options and consider business continuity plans in the event of any severe disruptions to the Corporation’s operations as a result of COVID-19.

AGMs and BOD/Council Meetings

One simple approach is to defer any and all meetings to future dates, after the COVID-19 restrictions are lifted. If the meeting must go on, consider the following:

  • Encourage proxy and electronic voting rather than in-person attendance.
  • If the total number of condo owners is less than the prohibited 50+ gathering, use a venue that is large enough to accommodate the required 2-meter safe distance between attendees.
  • Make hand sanitizers available as well as new pens for completion of ballots and sign-in forms.
  • Post signs with reminders of safety precautions — no handshaking, wash hands or use hand sanitizer, stand apart from other owners and maintain the required 2-meter distance, do not touch your face, etc.
  • Make arrangements for owners to view the meeting on a live video feed.
  • Keep the meeting moving as expeditiously as possible to minimize the duration of the meeting, perhaps offering to answer owner questions by email prior to the meeting to attempt to both reduce in-person attendance and to minimize the duration of the meeting.
  • Hold all BOD / Council meetings via Zoom Video Conferencing.

Taken from: http://www.mondaq.com/canada/Real-Estate-and-Construction/906464/Coronavirus-And-Condominiums-March-12-2020-Update

*Note some of this has been revised to reflect current recommendations from health authorities.

Final Recommendations

It is important to note that the coronavirus is a developing situation which requires an adaptive approach. The number of confirmed cases in Canada are continually rising, it is imperative to follow the latest developments and adjust your building’s protocol as needed. These best practices are to be considered general guidelines – any specific matters should be consulted with a legal firm.

Additional Resources

Normac is taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.

COVID-19: Normac’s Response

COVID19 Normac's Response

March 16, 2020

To our Normac Clients and Partners,

RE:  COVID-19 UPDATE


We appreciate how overwhelmed you must be with the news regarding COVID-19.   We are committed to being both responsive and responsible, navigating these difficult times with the safety of our team and clients at the forefront of our minds and procedures.   We remain focussed on three things:

  1. Ensuring the safety of our employees and clients
  2. Continuing to provide exceptional service to our clients
  3. Supporting local efforts to limit the spread and impact of COVID-19

We do not anticipate any interruption in Normac delivery of services.  We are, however, suspending all interior site inspections until further notice.  We offer an alternative to in-suite site inspections that will allow our appraisers to collect the necessary information in a timely manner.  We will continue to view the exteriors of buildings without entering the premises.


While our physical offices are not open, we continue to serve you with the same high standards and customer service as always.  A significant number of our employees already work remotely, and we are fortunate in that our business allows us to easily transition to a fully remote workforce.  We have the technology and systems in place to continue business as usual.  This makes us confident in our ability to continue providing great service to you and conducting business normally.

That means, among other things:

  • Our Client Services team will remain available for phone calls and emails from 6am PST (9am EST) – 5pm PST (8pm EST).
  • Appraisal reports and appraisal updates will continue to be emailed to all stakeholders with the same frequency and delivery dates as normally scheduled.
  • Standard Insurable Unit Description Outline self-completed forms will be offered as an alternative to in-suite site inspections. An SIUD expert will be available to assist condo boards through the process should any questions arise.

We are committed to serving our clients to the highest standards. Thank you for your patience and your trust in Normac. We are prepared to push through these challenges and put the safety of our Normac team, our clients, and our partners at the forefront of every decision we make. Stay safe and keep healthy.


Sincerely,






Cameron Carter

President


Download a copy of this letter. 


How to deal with coronavirus in condos. 

How To Deal With Coronavirus in Condos

coronavirus in condos
Last week, the World Health Organization declared Coronavirus (COVID-19) a national pandemic. Condominium corporations, directors of the board, and property managers should be on high alert, taking the necessary preventative measures to ensure their properties are safe. It is important to note that the possibility of transmission will always exist, however, can be drastically reduced with good hygiene practice and knowing how to deal with Coronavirus in condominiums.

What Is Coronavirus?

The coronavirus (also known as “COVID-19”) is a virus which symptoms include fever, cough, shortness of breath, and breathing difficulties. In more severe cases, infection can cause pneumonia, severe acute respiratory syndrome, kidney failure, and even death.

As of March 16, Canada has 324 confirmed cases of coronavirus. At the time of writing this, Ontario has the highest number with 145 confirmed, and British Columbia and Alberta are close behind with 73 and 56 reported cases respectively. The contagious nature of this virus means that this number will continue to grow exponentially.

The transmissibility of this virus is much like the common cold. The virus can be passed on from person-to person or through contact with contaminated surfaces or objects. This is why officials are recommending social distancing to prevent the spread.

Travellers, particularly those who are returning home from Europe, Middle East, and Asia are at the highest risk. Anyone coming into Canada is being told to self-isolate for 14 days and monitor symptoms.

How Does Coronavirus Affect My Condo?

Condominiums house a high number of people living in close proximity to one another with shared common spaces. These shared spaces include elevators, fitness rooms, condo lobbies, etc. The traffic in these areas pose a high risk for contamination, especially when it comes to door handles and elevator buttons.

If you are feeling sick, are returning from travel, or are other wise high risk of infection, it is imperative to self-quarantine as per the Canadian government’s recommendations. As a condo owner, this means remaining within your unit and having people bring necessities to you, or only leaving for medical care.

What Are My Legal Obligations On Behalf Of The Condo Board?

Quite frankly, condo corporations are not fully equipped to combat the spread of the coronavirus. The jurisdiction of this surpasses property management – into the domain of public health and communicable diseases. Rod Escayola writes in Condo Advisor last week that, Condo corporations have a duty to “control, manage and administer the common elements and the assets of the corporation.”  Similarly, boards of directors have a duty to manage the affairs of the corporation. Simply put, condos are there to manage the property, not pandemics.

The corporation can make rules on “the safety, security or welfare of the owners”, however this does not specify how to go about a contagion like coronavirus. In section 117 of the Ontario Condo Act, any activity that is likely to cause bodily harm (in units or common areas) is prohibited. Does this legislation give the authority to quarantine someone in their unit? Not likely, but that does not absolve the board from their social responsibility as leaders for their community.

Josee Deslongchamps, an Ottawa condo manager, provided this very informative notice to owners on the coronavirus. Condo boards could share a notice similar to this, which requests those who are at risk to self-quarantine and refrain from using common property, in a respectful and factual manner. It also communicates what precautions are being taken by the condo corporation to protect owners.

How To Deal With Coronavirus in Condominiums?

It is not expected for condo corporations to have foolproof measures against coronavirus. However, property managers and directors of the board can fulfil their fiduciary duty by taking these basic precautions:
  • Ensure that commonly used common element areas (sanitary facilities, fitness rooms, lobby/garage entrance door handles and elevator call buttons) are kept clean and disinfected with industry appropriate products;
  • Install hand sanitizers in common areas, by the main doors or by the elevators;
  • Post signs reminding owners to be extra diligent when wiping fitness equipment;
  • Remind owners not to use the fitness room, the pool or the amenities if feeling sick;
  • Encourage occupants having travelled to high risk-zones to consider avoiding using the common amenities for 14 days;
  • Encourage occupants/employees to self-quarantine if required;
  • Encourage occupants/employees to report to the corporation should they have been infected by the virus. This could allow the corporation to take early measures;
  • In certain circumstances, it may be worth considering postponing some of your social events… and perhaps even the AGM depending on how things evolve in your areas.  You may want to consult with your legal counsel before you do so.
Taken from Condo Advisor: http://condoadviser.ca/2020/03/coronavirus-in-condos/condo-law-blog-Ontario

Condo boards could also take note of how Italian condo dwellers are keeping their spirits up with music, or how other residents are working out together from their balconies in Seville, Spain.

The Bottom Line

Good hygienic practices go a long way in combatting airborne viruses. Taking proper precautionary measures in your condominium will drastically reduce the spread of coronavirus. In keeping with your community’s policy on Discrimination and Inclusiveness, residents are reminded that acts of racism, xenophobia and other discriminatory behaviours should never be tolerated. A collaborative community effort is vital in effectively managing a pandemic as such.

Additional Resources

CHOA – Preventing Coronavirus: https://www.choa.bc.ca/wp-content/uploads/600-014-Preventing-coronavirus.pdf

PAMA – What Do We Know and What Can We Do about COVID-19?: https://www.pama.ca/common/Uploaded%20files/pdfs/Almanac/COVID_19.pdf

ACMO – ACMO Coronavirus Advisory: https://acmo.org/acmo-coronavirus-statement

Normac is also taking precautionary measures to protect our staff, clients, and to do our part in preventing the further spread of COVID-19. Read more about our efforts here.

Hard Insurance Market: What Can Stratas / Condo Boards Do To Protect Themselves

What Can Condo Boards Do To Protect Themselves In This Hard Insurance Market

Recently, we posted articles about the hard insurance market and its impacts on the BC condo housing market.  The news about sky-high insurance premiums and deductibles, condominiums with loss limits or no coverage at all has many condo owners and boards panicking . They are turning to their insurance brokers and asking, what can we do to make our property more attractive to insurers?

The answer isn’t simple and the results won’t be seen overnight, but the best thing that condo boards can do is take better care of their property.

What Are Insurers Looking For?

The insurance industry is not regulated and as with any business, they can choose where to conduct business based on where they can be successful. In today’s technology era, access to data has become more available and insurance companies are seeing their losses instantly and accurately. Because of this, they can respond more quickly by pulling out of lines of business that are not seeing profits. With fewer players, the remaining insurance companies are tightening their underwriting and increasing their prices.

Multi-resident properties are especially prone to more claims. This is due to the construction of the properties (a leak on the 18th floor of a high rise building can do more damage than a leak on the second level of a single family home) and because of the community-mentality many owners have (“it’s not my problem, it’s the corporation’s problem”). Because of this, many insurers have backed out of the multi-residential property market.

Those insurers who have stayed in the market are looking for properties with the least amount of risk.  The Insurance Bureau of Canada lists 10 factors that typically affect premiums, and here is a summary of the most crucial points:

  • Replacement Cost: those buildings which are more expensive are under more scrutiny
  • Claims History: past claims are often indicative of future claims
  • Repair and Maintenance: insurers are looking at your pipes, roof, electrical and more to determine if you are at risk of an accident caused by deficiencies
  • Location: are you in an at-risk area for fire, flood, earthquake and if so, what preventative measures have you taken

There are a number of things both strata / condo corporations and unit owners can do to protect themselves and makes themselves more attractive to insurers.

What Can Strata / Condo Corporations Do To Protect Themselves?

  1. Obtain a Depreciation Report or Reserve Fund Study and strictly follow a regular maintenance, repair and replacement plan. Increase condo fees annually to ensure your contingency reserve fund is adequately funded.  This can be one of the single best ways to ensure your building has fewer claims.

  2. Revise bylaws to make the corporation responsible for the inspection of unit appliances and fixtures – check dryer vents, smoke detectors and fire alarms, aging appliances. Make unit owners responsible for repair or replacement when required.

  3. Invest in preventative measures such as installing sprinkler cages in hallways or water leak detectors.

  4. Ensure all trades have insurance before conducting any work on your property.

  5. Educate owners to be more careful and take more responsibility for their actions. The corporation should reinforce the idea that insurance should not be used for maintenance, it should be used for accidents which are not preventable.

What Can Unit Owner Do To Protect Themselves?

  1. Ensure they have unit owner’s insurance to protect personal property and unit betterments.

  2. Find out what are the corporations bylaws related to passing on deductibles to owners and ensure they have adequate coverage should they be deemed responsible for a claim.

  3. Follow the recommended usage and maintenance for all appliances – don’t run washing machines and dishwashers if you are not home.

  4. Follow the corporation’s annual maintenance guidelines, such as turning off water lines in the winter and in general, take better care of their units and shared property.

Final Recommendations

Ultimately, it comes down to changing unit owner behaviour. The nature of community living is that people have the mentality that if something happens, “it’s not my problem.” They are quick to make claims and resist taking responsibility. This can be seen in the number of claims made by multi-unit residences as compared to single family homes or commercial properties. More than 90% of claims are coming from water problems: appliances breaking down, aging piping issues, accidental triggers to sprinklers. All of these are avoidable when corporations and owners follow proper maintenance and replacement routines. You can find some relevant tips and information on the Government of BC official website.

It is crucial to also be proactive in communications with insurance brokers. See what specific advice they have and which projects could be taken on to make a property more attractive to insurers. Find out what steps they are taking with marketing your property and determine the communications plan to unit owners about potential increases.  While owners and corporations won’t see improvements to their premiums and deductibles immediately, over time, this will help increase their attractiveness to insurers and decrease their overall risk.

Normac has its finger to the pulse of the insurance industry and in response to the recent changes has implemented a new 60-90 day valuation delivery policy. In an effort to mitigate stress and provide brokers with ample marketing time, we now deliver our reports sooner.

For a no-obligation proposal, click here.

Are We Headed for a Collapse of the BC Condo Market?

A recent article from CTV News has some condominium owners in BC panicking as they grapple with an increasingly hard insurance market that could leave some strata corporations unable to pay high premiums or without coverage at all.

The Hard Insurance Market in BC

The onset of the hard insurance market is affecting the condo market across the country, with BC seeing especially difficult side effects in the multi-unit housing market. While climate change and an increase in the amount of property claims can be blamed, ultimately the hard market is caused by insurers operating at a negative cash flow for too long. The global insurance industry has been taking hit after hit over the past decade, following a long soft market where low premiums and deductibles contributed to annual losses for insurance companies. The multi-unit residential industry has not been profitable and many insurers are pulling out of the market all together. Chuck Byrne, Executive Director of the Insurance Brokers Association of BC (IBABC) explains, “The bottom line is that [the insurers are] not obligated to insure anybody for anything.”

For BC condo owners who were able to obtain insurance coverage for their strata, increasing insurance premiums and deductibles may lead to expensive special levies for condo owners. There are several hundred buildings currently citing 50%-400% increases in premiums which simply can’t be covered by a contingency reserve fund and must be funded through a special assessment. As stratas anticipate future increases, considerations must be made to increase monthly strata fees in order to fund the premiums in upcoming years. The question is whether home owners will be able to afford the increase to their monthly spends.

In other cases, some condominium buildings are left without coverage at all or with a loss limit, where the insurance does not cover total replacement cost.  In this situation, owners are at significant financial risk should a major peril ever occur. For instance, if an apartment building without insurance were to succumb to a fire, the self-insured owners who would be partially or entirely responsible for the rebuild.

BC Heading Towards a Collapse?

This is having trickle down effects on BC’s housing market. On one hand, mortgage lenders might not approve mortgage loans on a condo purchase where there is no insurance in place. Additionally, we may see situations where buyers are backing out of deals where adequate insurance has not been secured by the strata. When you put together BC’s ongoing issues with housing and affordability with the rise in premiums and deductibles, you have a recipe for disaster which could be leading to a collapse of BC’s condo market.

Some claim this could have been foreseen as the market stayed too soft for too long. But CHOA Executive Director, Tony Gioventu, claims that the extent of this crisis could not have been predicted. Those taking the hardest hit include expensive buildings with premium facilities and finishings, buildings with a high number of previous claims, or those who have failed to keep up with regular maintenance and repair.

The Insurance Bureau of Canada says that it is communicating with insurance brokers, underwriters, and condo groups to address the issues, with an upcoming regional meeting in BC scheduled for March. Other proposed recommendations coming from the IBABC include changes to the BC Strata Property Act:

  • Implementing a $50,000 cap on loss assessments to protect unit owners when a strata’s insurance deductible can be passed onto them if they are found at fault for a claim.

  • Introducing a standard definition of a strata unit, similar to what Alberta has just recently implemented.

The IBABC acknowledges that this won’t solve the imminent problem, but that it will help to build a strong foundation and “long-term stability [in] the BC strata insurance market.”

Normac has its finger to the pulse of the insurance industry and in response to the recent changes has implemented a new 60-90 day valuation delivery policy. In an effort to mitigate stress and provide brokers with ample marketing time, we now deliver our reports sooner.

For a no-obligation proposal, click here.