Canadian Lawyer

September 2021

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www.canadianlawyermag.com 39 She says Ontario has one of the more stringent sets of condo rules in the country. The province stipulates that boards must regularly commission reserve fund studies, which only designated professionals such as engineers can carry out. Reserve fund studies typically approximate the replacement value and lifespan of building components. But Lash notes that while these studies must be updated every three years, a physical assess- ment involving a site visit by an expert is necessary only once every six years. As well, says Lash, "all the law requires is that there be a plan in place to fund the repairs." There is leeway in the act that allows the boards of directors to develop a plan that differs from the engineer's recommen- dations. "That is definitely one of the things that need to be changed," she says. Lash adds that current laws also don't ensure that owners heed warnings from consultants hired to evaluate if enough money is being set aside for major repairs. The rules talk of there being "adequate" money in the reserve fund, but there is no actual definition about what is "adequate," Lash says. In British Columbia, where condominiums are called "strata," its version of a reserve fund study is called a "depreciation report." Vancouver-based condo lawyer Jamie Bleay notes that while it's mandatory to have these reports done every three years, the report can be waived if three-quarters of the owners agree to put it off. The diversity of people who own or live in condos can be one of the biggest problems in tying the hands of a strata corporation board when it comes to depreciation studies and repairs. Of the more than million-plus people in B.C. who live in strata, you can have, for example, retired empty nesters, young people just able to find the money to pay the mort- gage, and investors who own the units but may not even live in the country. Bleay points to a case he has worked on where a strata board has tried to pass a special levy to repair the roof, which is 40 years old. "But they have a mixture of resi- dent and non-resident owners and a few new owners who are probably stretching them- selves financially," he says. There has been a vote three times, and it failed to reach the three-quarters majority needed to get the work done each time. "While the long-term interests in keeping the building maintained properly are the same, the short-term inter- ests of the various can be very different." The conflict of different views is at least part of what happened at Champlain Towers South. It was built in 1981 and only had the first assessment of its condition in 2018. It found significant structural issues that required millions of dollars in repairs. "Owners, tenants and those who sit on condo boards need to take a lesson from Surfside when it comes to ensuring the structural integrity of their buildings." Denise Lash, Lash Condo Law The Champlain Towers South condo asso- ciation did have a reserve fund, but after 40 years, it had less than seven per cent of the money required for the necessary repairs to the building. While the inspecting engineers did not find signs of imminent structural failure, the necessary work was urgent. However, many residents balked at the US $9.1 million bill, refusing to approve the required work. It took three years of bitter infighting before an agreement was finally reached, and by then, the estimated cost jumped to US $15 million. Work had just begun when the building collapsed on June 24. PERCENTAGE OF HOUSEHOLDS LIVING IN CONDOMINIUMS, 2016 Source: Statistics Canada Vancouver Ottawa Saskatoon Moncton Calgary Québec Winnipeg St. John's Victoria Montréal Regina Saint John Edmonton Halifax Toronto 35% 30% 25% 20% 15% 10% 5% 0 Canadian Avg (13%) 30.6% 18.4% 21.8% 19.8% 17.6% 13.4% 8.3% 20.9% 14.0% 16.0% 14.6% 6.0% 5.4% 3.3% 3.8%

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