On Tuesday, June 22, Normac’s Calgary team hosted a Zoom webinar on the topic of Standard Insurable Unit Descriptions (SIUDs), featuring guest presenters:
Watch the recording below:
In case you missed it, as of June 16, 2021 Normac has acquired Reliance Asset Consulting. Read more about this here.
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.
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.”
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.
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.”
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.”
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.
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.
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.”
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.
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.
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.
On January 1, 2020, the Phase III of Alberta Condominium Property Act Amendments took affect. This came after a six month pause instituted by the Government of Alberta, specifically by the Honourable Minister of Service Alberta, Nate Glubish, in an attempt to cut red tape . The government wanted to alleviate the “administrative burden on condo corporations while protecting condo owners and their investment,” according the Government’s website. During this period, stakeholder round tables were held so that feedback from the industry could be incorporated. In the end, administrative changes, monetary sanctions, and increased clarity of the responsibilities of condo boards and corporations were all integrated into the Alberta Condominium Property Act Amendments.
One of the more significant changes has been the introduction of a Standard Insurable Description (SIUD). And SIUD must be adopted by all residential condominium corporations into an amended bylaw and filed with land titles by the first insurance renewal date after January 1, 2020. Moving forward, developers will be responsible for creating and delivering an SIUD to the owners once occupancy takes effect.
Once a Standard Insurable Unit Description is passed by the condominium corporation, the outline will help clarify what is a standard feature that is to be covered by condo insurance and what is an improvement to the unit that is to be covered by the home owners personal insurance. The goal is to prevent future disputes between unit owners, the condominium corporation, and insurance companies should there ever be an insured loss. An SIUD can additionally help ensure the condominium has the correct level of insurance to cover the standard finishes.
You can read more about SIUDs and their implementation here.
The updates to the Alberta Condominium Property Act Amendments also change practices around condominium insurance deductibles. Corporations will now be able to recover up to $50,000 from unit owners to cover insurance deductibles if damages originated from within their unit or in an area that the owner is responsible for, like a balcony, even if it was not their fault. Under the new legislation, the unit owner could be responsible for up to $50,000 of the deductible. If the deductible is only $30,000, the owner’s liability would be for the full $30,000. If it’s $75,000, the owner’s liability would only be for a capped $50,000.
As there is a potential for a new expense to unit owners in the event of an insurance claim several steps should be taken to mitigate their risk, as reported on Global News.
Other changes that took place January 1, 2020 as part of the Alberta Condominium Property Act Amendments are listed on the Government of Alberta website. These include, but are not limited to the following:
Condominium corporations will still have one year in which to pass an ordinary resolution to bring their bylaws into compliance with the changes to the Alberta Condominium Property Act. This process is limited to bylaw amendments that address actual conflicts that pertain to the updates in the new Condominium Property Act, and cannot be used to approve other changes to the bylaws which would still need to be approved via special resolution.
Normac’s expert property information collectors and insurance appraisers are uniquely positioned to assist in the process of defining a standard insurable unit description and can help prepare the outlines for condo boards and corporations. Contact our client services team today to learn about our various SIUD offers.
Service Alberta recently put a halt to the regulation changes that were to be implemented under Phase II of the Condominium Property Amendment Act, citing that the changes would create too much red tape and cause an unnecessary burden to Alberta condo residents. Minister of Service Alberta, Nate Glubish, released a statement August 8th directing all Real Estate Council of Alberta (RECA) proposed policies, bylaws or regulatory changes to first pass through his office for review and approval.
Alberta has been working towards the Condominium Property Amendment Act for the past five years, with Phase II scheduled for implementation in July of this year. With intentions to modernize legislation, more than 50 amendments were previously approved to help protect owners and increase effectiveness for condo boards. However, in response to stakeholder backlash to the regulations, the current government has paused Phase II to ensure that Albertans are heard and protected.
“Our government has a mandate to cut red tape that creates unnecessary burdens for Albertans in their personal and business lives, and we are working hard to make sure Alberta is open for business and free of unwarranted red tape.”
Minister of Service, Nate Glubish on August 8, 2019
Between July 2019 and January 2020, the government plans to meet with key stakeholders to determine if the regulation changes imposed by the amendment act constitute “an excessive administrative burden or challenge for condo boards, owners, and corporation involved in the condominium industry.” The regulations are anticipated to come into effect January 1, 2020, after stakeholder feedback can be taken into consideration.
To read more about the Amendment Act and it’s three phases, see our previous blog post here.
Please see this press release from Service Alberta for more information: Statement from Minister
Service Alberta has placed all Phase II changes to the Condominium Property Act on hold. During a six month period between July 2019 and January 2020, Service Alberta will be meeting with key stakeholders to discuss the proposed regulation changes and make amendments based on the feedback provided. There may be further revisions made during this review period which will likely effect the amendments set for January 2020, including the Standard Insurable Unit Description.
Please see this press release from Service Alberta for more information: Press Release
Over the past few months, Albertans have been preparing for the next stage of the Property Amendment Act, effective January 2020. Arguably the most discussed update in the industry is the standard insurable unit description, and how this new bylaw requirement will affect condominiums and their insurance process. Our team at Normac is committed to providing the education, resources, and service to assist condominium boards with this new regulation.
What exactly is the Standard Insurable Unit Description?
The standard insurable unit description is a way for boards to clearly document what is covered under the corporation’s insurance and what is an improvement that must be covered by an owner’s insurance, for any particular unit.
Service Alberta defines this document as an inventory of the typical standard fixtures and finishing in a residential unit or a class of units. It can be provided either to purchases by the developer or created and adopted by the corporation. It is the responsibility of the condominium corporation to obtain insurance covering the unimproved or “standard” unit based on this description. Insurance for any improvements to the unit is the responsibility of the owner unless clearly stated otherwise in existing condominium bylaws.
The corporation must also define how many classes of units will be documented and, in the case of older properties, what the unit classes should include in terms of these fixtures and finishes.
Once documented, the Standard Insurable Unit Descriptions must be voted in to the corporations’ bylaws. As the purpose of this bylaw addition is to limit disputes between owners and the corporation, it is important that this description be handled with diligence and is completed in detail to best protect all parties. It is also important to consider how the description is written for the corporation and the language used – as it must be clear, consistent, and comprehensive in the cases where the description is needed or challenged.
How and when should we complete our Standard Insurable Unit Description?
According to the Act, the bylaw must be passed before the corporation’s first insurance renewal after January 2020 – giving condos at most, three years to complete the standard insurable unit description. Many corporations have taken the opportunity to begin planning for this regulation and seeking information and resources on how they may be able to complete these descriptions ahead of time. We recommend that all condominiums begin preparing and acquiring information and resources to have these documents completed as soon as possible.
Normac can help condo corporations with their Standard insurable Unit Description needs.
At Normac, we have been completing insurance appraisal across Canada for over 20 years now and have always included the standard insurable unit breakdown as part of our appraisal reports. With this new requirement by the Act in place, we have the expertise and skill-set and are uniquely positioned to assist condo boards with defining their standard insurable units. We offer a turn key solution that that will allow condo boards to focus on other areas required of them, while we take on the heavy-lifting of standard insurable unit definitions. We are committed to helping all our clients with this breakout description and will continue to work with other interest groups in industry such as legal practitioners, property managers, and insurance brokers collectively to ensure we are consistently offeringthe best solution for your condominium.
For more information on Standard Insurable Unit Definitions, click here.
To request a quote, click here.
To read more on Alberta Condominium Property Regulations, click here.
Whether you are interested in buying a condominium, are currently an owner, or a condo manager, clear legislation set by the provincial government is vital to support self-governance, efficiency between parties, and the protection of all involved within the condominium community.
In December 2014, Bill 9 was passed. This bill, also known as the Condominium Property Amendment Act, was aimed at modernizing and enhancing the legislation previously in place regarding condominiums in Alberta. Since then, there has been an assessment and implementation of new regulations needed to bring about more than 50 amendments to the Condo Act, most of which for the protection of owners. Service Alberta outlines their plan for the implementation of these changes in three main stages:
Service Alberta – Phased Amendment Overview
More on the specifics of this outline can be found here.
For a full outline of the first stage of regulations that were passed on January 1, 2018 & April 1, 2018 – see this article.
Now that the next stages are fast approaching, it’s important to consider some of the upcoming changes that may be passed and how they may affect you.
There are a multitude of additional changes proposed regarding transparency and accessible information between owners and the corporation. These include requiring a board to notify owners of major changes to the corporation’s insurance policy and deductibles as well as changes to property replacement cost value and any permitted exclusions. The act has also proposed expanding permitted uses of the reserve fund to allow payment of professional services such as reserve fund studies and reports, and any improvements required by law.
Many of these additional regulations will benefit the majority of stakeholders of the condominium community in Alberta, however it is important that we all be as involved with the changes. Remember to take an interest in the condominium amendment Act, familiarize yourself with the regulations to be introduced and take part in engagement and feedback surveys, such as this one, whenever possible. Together, we can help ensure that appropriate legislation is put together for the hundreds of thousands of Albertans in the condominium community.
The city of Calgary is making international headlines for the construction of their New Public Library. The development was listed on Architectural Digest’s list of 12 Most Anticipated Buildings of 2018. With a $245-million price tag, the new library will open in November of this year and is expected to be completed on time and under budget.
The project is an architectural collaboration between Canadian based firm DIALOG and Norway’s Snøhetta and is being overseen by the Calgary Municipal Land Corporation (CMLC). DIALOG is known for some other Calgary landmarks including the Calgary International Airport, Telus Spark Building, and Energy Environment Experiential Learning Project at the University of Calgary, among other Canadian and US projects. Snøhetta’s designs can be seen around the world, including places such as Norway, Egypt, Saudi Arabia, and San Francisco. You can view some of the other projects by DIALOG and Snøhetta here.
The Calgary Public Library is elated to have these two working with them to build the new state of the art facility. The Communications Director for the library, Mary Kapusta claims, “not only is this going to be a huge landmark for Calgary, this is going to be an internationally recognized landmark for Western Canada.”
Located between downtown Calgary and the East Village, the library will act as a gateway between the two neighbourhoods. The exterior will feature large geometrical shaped windows that create an open ambience on the inside. A natural wood archway will allow for pedestrian access from one side of the library to the other without having to enter the building. The interior will also feature lots of natural wood as well as an enormous skylight in the roof designed to look like a human eye, called the oculus.
Calgary’s new public library will not only be beautiful, it will also be a functional space for learning and community engagement. Plans have been in place since 2004 and have incorporated feedback from Calgarians as to what role they wanted the New Central Library to play in the community.
With it’s 240,000 square feet of usable space and five levels, the library will boast a 350-person performance hall, 30 free meeting rooms, spaces for children and teens with media centres, studio space, and more. The library itself will contain 600,000 items and plenty of quiet study space. “We’re all book lovers so we want book lovers to have a great place to research and read,” says Kapusta.
The building is seen as a “huge engineering marvel” as it sits above Calgary’s Light Rail Transit system. The construction has been ongoing while LRT trains carry commuters underneath a tunnel without interruption. You can see the encapsulation process of the railway in this time lapse video.
To learn more about the Calgary’s New Central Library, you can visit their website here.
Other projects on the Most Anticipated Buildings of 2018 list include the ARC Power Plant in Denmark, The Mwabwindo School in Zambia, Nanjing Green Towers in China, and the National Museum of Qatar in Qatar. You can see the full list here.
Photos courtesy of: https://calgarylibrary.ca
All photos by George Webber Photography and provided to the New Central Library.
In January 2017, an amendment to Bill 23, the Alberta Human Rights Amendment Act, was put forward that would add age as a prohibited ground of discrimination under sections 4 and 5. Age is currently a prohibited ground of discrimination under all sections of the act, except for 4 and 5, which protect against discrimination when facilities, accommodations, services, or goods are provided, and when tenancy is regarded. This amendment was passed on November 14th and new age restrictions will come into effect on January 1st, 2018.
While this amendment makes sense, there are a number of complex issues which were raised. Kathleen Ganley, the Minister of Justice and Solicitor General addressed some of these in a recent news conference and how it will affect condo boards in residential buildings.
Where section 5 is concerned, she acknowledged the significant investment that many Albertans have made based on bylaws which were in place at the time of their purchase. This would allow them to live in communities of their choice. In response to the feedback they received, a few additional amendments were suggested.
Firstly, any seniors living in 55+ communities or condominiums will continue to be allowed to. She explains that the Government of Alberta understands that the older generation may choose to live together with people of a similar age and with certain amenities. There will be exceptions for live-in caregivers and unexpected care of minors.
Secondly, a 15 year transition period will be implemented for all buildings with age restrictions with a threshold of below 55. Hugh Willis, co-chair of the Government Advocacy Committee at the CCI North Alberta Chapter commented on this, explaining that the 15 year period seemed fair. It is enough time to allow owners to either make adjustments, or alternatively, in buildings that have 40+ age restrictions, it allows those owners to reach the 55+ threshold without having to let go of their investment.
Willis said that his CCI chapter consulted many condo owners and the feedback was overwhelmingly in favour of allowing age restrictions to be maintained, but that exceptions should apply.
“The belief that individuals should have a choice in their housing and lifestyle decisions is strongly supported by the condominium owners we consulted with in Alberta. At the same time, we recognize the national trend that restrictions by age can affect communities where there is a critical shortage of housing. As a result, we feel that the 15-year transition period is a reasonable and common sense solution to allow existing condominium owners to make consumer decisions.”
To read more about to Bill 23, the Alberta Human Rights Amendment Act, click here. To hear a recording of the news release, click here.
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