Canadian Lawyer InHouse

Feb/Mar 2012

Legal news and trends for Canadian in-house counsel and c-suite executives

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GLASS HOUSES? WHAT'S THE OF They're pretty to look at, but deficiencies in glass condos in major cities should have developers thinking about how best to mitigate their risk. By Michael McKiernan W hen condo histori- ans look back on the early 21st century, they may identify 2011 as the year Toronto's love affair with the glass tower began to sour. The summer was punctuated with incidents of falling glass from high-rise balconies shattering in the downtown streets, and the year ended with some developers and engineers voicing their concerns about the long-term durabil- ity and energy efficiency of buildings whose primary protection from the ele- ments is a wall of double-glazed glass. "Obviously, developers are very con- cerned, particularly when you look at the number of condos that have gone up, and are still going up using glass," says Leor Margulies, a partner at Robins Appleby & Taub LLP, who is also a member of the executive at the Building Industry and Land Development Association. He says it's essential developers get engaged when potential issues come up. "It's tough, because the industry wants to make money, and on the other hand it has to be socially responsible, and I think it is. They're actually really innovative and a lot of the buildings that are being built go well above the building code," Margulies says."It's not for the industry to set the standards. It's for the industry to work with the regulators to improve stan- dards, which is constantly happening. But if there's a problem, then the industry and government will sit down as they always do and try to find a realistic solution." Sally Thompson, an engineer with Toronto-based Halsall Associates, con- ducts reserve fund studies for condomini- ums, calculating the amount of money they need to set aside for future repairs and maintenance. She says window walls can be a significant source of major proj- ects, typically accounting for around 20 per cent of condo owners' reserve fund contributions. In the early years after construction, she says the quality of the sealing job between slabs of glass can make a big dif- ference. Once the building is complete, the original seal becomes inaccessible and the joints have to be resealed from the outside. In the first decade, some buildings get away with repairs to a few localized leaks, but one seven-year-old condominium she has done work for is spending around $500,000 to seal up joints on its tower. "With glass, there are so many joints to seal up that those projects become pretty significant. Some of these buildings need seven to 20 kilo- metres of caulking on a single tower," Thompson says. "In a perfect world, no cladding should need that major of a repair after five or 10 years. If you bought a brick building or a pre-cast concrete building you wouldn't expect it." At Earth Development, which bills itself as a socially responsible proper- ty developer, the company steers clear of glass walls, because of concerns over building performance."We're not anti- glass, we're anti-all glass. It's overkill to do floor-to-ceiling glass; you just lose so much energy," says principal Mark Johnson. His colleague David House says there are ways to get a glass look by sim- ply covering a better insulated pre-cast concrete wall with an outer layer of glass, but developers tend to be more attracted to the cheaper option of a glass wall."We want to believe it works. The market likes it, it's kind of cool to look at, it's cost-effective, and none of us are really forced to measure energy, so it doesn't really matter. But if people buying con- dos or leasing office space were the ones building the building, I don't think they would be interested in all-glass buildings. As soon as you figure out this will double or triple your energy bill, you'd think it was nuts," he says. "Some day, given our litigious society, I think someone will figure out this doesn't work and want to talk about how to get some compensation somewhere." Mark Arnold of Gardiner Miller Arnold LLP has represented a num- ber of condo corporations in disputes with developers, including unit owners at Harry Stinson's landmark downtown Toronto 1 King West development in a long-running dispute involving vari- ous alleged deficiencies. "One portion of it was similar to what you have with glass falling from balconies, because there were parts of the exterior cladding on the building that started falling off. We had to prove why it fell off and to what extent the builder had investigated from an engi- neering standpoint." The case eventually settled with a glob- al settlement before trial, making conclu- sions difficult to draw, but Arnold says INHOUSE FEBRUARY 2012 • 27 FU T URE

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