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

*Click here to view Normac’s current COVID-19 Response and Policies. 

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.

Hard Insurance Market Persists Through 2020

Toronto Construction Street View

As insurance companies experience significant losses, adjustments must be made for them to remain profitable. Whereas in the past, insurance companies offered competitive rates with lenient underwriting guidelines, the cyclical nature of insurance has turned this around. Canada is experiencing a hard insurance market where premiums are on the rise and policies are much more difficult to obtain. While some carriers are taking on preferred risks, others have completely stopped writing insurance at this time.

Hard Vs. Soft Markets

Insurance has a life cycle which is characterized by two periods – soft and hard. A soft insurance market reflects lower premiums, broader coverage, relaxed underwriting criteria, more policies, as well as healthy competition among carriers. On the other hand, a hard insurance market reflects higher premiums, strict underwriting criteria, less policies, as well as less competition among carriers. We are currently facing a hard market.

Rise in Premiums + Deductibles

Since the start of the hard insurance market, premiums have been skyrocketing nationwide. British Columbia strata corporations are facing premium hikes between 50% and 300%. Tony Gioventu, Executive Director of the Condominium Homeowners Association, (CHOA), adds that, “deductibles are going from the conventional $10,000 or $25,000 to $100,000, $250,000 or $500,000.”

Subsequently, some condominium boards in Alberta are seeing condo insurance increases up to a 700%. Ryan Chernesky sits on the condo board of a building he owns two units in. In 2018, the premium on the condo building was approximately $51,000. Last year, the insurer declined renewal and only two other companies were prepared to take the risk. The lowest quote was approximately $402,000 – an increase of 690 percent.

“We’ve been told by the insurance companies that it’s to do with the 2016 wildfire and there is an increased risk associated now and various other reasons on a more global scale,” Chernesky said in this article.

Why Now?

Current underwriting standards have been shaped in response to a series of global and local catastrophic events, a lawsuit-first approach, and an increase in construction costs.

In Canada, we have seen an increase year over year in property claims caused by severe weather. It is not just one single event that causes higher claims, but rather a series of events happening across the country.

  • There are approximately 5000 earthquakes that are recorded in Canada every year, with the majority in British Columbia. The risk also exists in eastern Canada, along the St. Lawrence and Ottawa River valleys.

  • In 2016, the Fort McMurray wildfires that swept through Alberta estimated a total loss (direct and indirect costs) of $9.9 billion dollars, with an estimated $3.7 billion in claims.

  • The 2019 spring floods in Ontario, Quebec and New Brunswick have also contributed to the increase in premiums. About, one in three Canadian homeowners are insured for overland flood risk, the Insurance Bureau of Canada said in this article released June 18.
Top Insured Damage Severe Weather Events in 2019 - Insurance Bureau of Canada
Catastrophic events like these have resulted in billions of dollars in losses for insurance companies. According to the Insurance Bureau of Canada, eight out of the top ten highest loss years on record are between 2010 and 2019.
Top-10 Highest Loss Years on Record - Insurance Bureau of Canada
In addition, the cost of building materials such as brick, wood, and cement has increased. As reported in this article, Rider Levett Bucknail (RLB), an international property and consultancy firm, stated that construction costs in Toronto has been increasing faster than any of the 14 North American markets, which include Boston, Los Angeles, New York, San Francisco, Washington DC, and Calgary.
Indicative Construction Costs - Rider Levett Bucknall

Cause + Effect

Insurance companies are taking a closer look at what the actual replacement cost of a building is and are finding that many buildings are underinsured. This may have been acceptable in the past, as a total loss was unlikely, but as natural disasters are more prevalent and building costs on the rise, insurance companies are now requiring buildings to be insured to their full replacement value.

As insurance appraisal experts, Normac stays on top of current construction costs and is aware of industry developments and trends. As a result, we deliver the most accurate and reliable insurance appraisals, and ensure that your properties are protected and always adequately insured to full replacement value.

For a no-obligation proposal, click here.

Alberta Condominium Property Act Amendments Finalized

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.

STANDARD INSURABLE UNIT DESCRIPTIONS

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.

DEDUCTIBLES

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.

  1. All condominium owners should have an unit owner’s insurance policy.

  2. Ensure that deductible coverage up to $50,000 is included in the unit owner’s policy, and if not, ask to have it added.

  3. Owners should also ask their property management firm or condo board for a copy of the corporation’s certificate of insurance which will outline the deductible amounts.

OTHER CHANGES

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:

  • The requirement to provide the minutes of all board meetings in the package for Annual General Meetings (AGMs).

  • Changing the requirement to disclose draft AGM minutes from 30 days to 60 days after the AGM.

  • Changing the maximum fee for an estoppel certificate from $100 to $200, or $300 if rushed, and add a disclosure statement document fee of $100, or $150 if rushed.

  • Changing the per-document cost for paper documents from a $10 flat fee to $0.25 per page, or $10, whichever is more.

 

  • Allowing condominium corporations to borrow up to 15 per cent of their annual revenue as the default limit but also allow that limit to be changed through their bylaws.

  • Removing the requirement to provide 60 days preliminary notice of an AGM and accept owner submissions for the agenda.

  • Eliminating tiered rates for deposits condominium owners provide to their corporation when renting out the unit they own and setting the maximum for these deposits at $1,000 or one month’s rent, whichever is higher.

  • Broadening the list of those who can conduct reserve fund studies.

TIMELINE

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.

Alberta Amendment Act Paused for Review

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

Climate Change and Canada’s Building Code

Climate change is among the top issues that Canada and many other countries have chosen to tackle. Our efforts to reduce the negative effects of climate change vary drastically and have taken form in several different ways in Canadian society – one of which is revamping building practices.

Over the past ten years, provinces throughout Canada have begun adopting methods and technological advances that would positively impact and reduce our carbon footprint. Many of these advances have made drastic impacts to Canadian building codes to reduce greenhouse gas emissions, material waste, and energy consumption. While we have seen these efforts represented more and more with new builds across the country, there is still a large amount of discussion around older properties and the renovations and updates required for adequate progress.

For example, Ontario’s Planning and Growth Management Committee submitted this article in 2017, highlighting requests for further improvements to the Ontario building code in a battle with climate change. The requests (also common amoung other provinces) were as follows:

  • “Continue to expand the list of items in the Ontario Building Code’s list of “green standards” to include incremental energy efficiency provisions for all buildings”
  • “Take measures to discourage the growth of illegal renovation and develop technical support and training for the building industry, building officials and building owners”
  • “Continue to review the Ontario Building Code for other potential amendments to mitigate against the effects of extreme weather such as flooding, ice storms and extended periods of heat and extreme winds. Specific areas which should be addressed include passive cooling measures in buildings, and a review to ensure that climatic data in the Ontario Building Code reflects current conditions.”

The third recommendation is especially interesting, as we are now beginning to view the effects of climate change as something to expect and prepare for its effects rather than just something to attempt to prevent. In fact, the issue of climate change has begun to hit so close to home, that homeowners in Toronto are being offered a Basement Flooding Protection Subsidy Program– a program designed to mitigate flood damage from the ever more common sever weather events.

The issues Canada is facing with the current day impact of climate change is in fact so severe that the Canadian Building Code is expected to be fully reformed with strict guidelines and rules set to take effect 2025. With more frequent wildfires, heat waves, and flooding, our buildings will need to be designed and renovated to meet these new challenges. If these building code changes are ignored, the infrastructure failures associated with climate change could cost Canada $300 billion over the next decade as outlined in this CBC article. There is no doubt that our buildings, roadways, and city systems will take on great changes over the next 10 years in response to the effects of climate change – the question is whether your property is able to begin that process.

Did you know that Normac is Canada’s leading insurance appraisal firm? For more information on or to request a quote, click here or email info@normac.ca. To read more on Canada’s Building Code and Climate Change, click here.