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REAL ESTATE would provide long-term savings for condominium owners, cutting energy use by 25 to 50 per cent, and would also reduce greenhouse gas emissions by more than two tonnes per dwelling per year. But, as Nevison points out, the real- ity of the marketplace is such that it doesn't make sense for a developer to add $1.5 million to the up-front cost of a new building, since relatively few purchasers are thinking about long- term energy savings or reducing global warming when they're looking for a new home. Such an investment might make sense for a developer planning to retain ownership of a commercial or rental apartment building, but not to a condo developer that turns over owner- ship of the building to a condominium corporation controlled by the people who purchase the units. "It's not some- thing the developer retains and enjoys the benefit of any extra investments, so we have to be competitive in our costs," he says. There is a way of financing these projects, however, without a loss to developers or a huge up-front cost for condo purchasers. This involves ser- vice providers linking up with insur- ance providers to invest in the project and assume ownership of the energy- efficient infrastructure on the condi- tion that the condominium corporation makes a commitment either to a long- term maintenance and service contract or lease-to-own arrangement where- by the service provider can recoup its investment over a period of, perhaps, 15 or 25 years. The problem with making this kind of arrangement in Ontario is that, under s. 112 of the Condominium Act, during the first 12 months after a newly created condominium board has been elected, it has the right to terminate any contract entered into by the develop- er or the board originally appointed by the developer for the provision of goods or services on a continuing basis, for the provision of facilities on other than a non-profit basis or for a lease of all or part of the common elements for business purposes. In other words, says Herskowitz, within the first 12 months, "The board can say, 'We don't want to be burdened with this and we're not going to honour this agreement.' So what developer is going to risk the up- front capital infusion needed if these contracts might be terminated with impunity?" Nevison says Tridel has had discus- sions with Corix Utilities, a Vancouver- based company that builds and man- ages sustainable energy infrastructure systems across Canada and the United States. Corix has invested in geother- mal projects for condo developments in B.C., where there is no condominium act provision similar to Ontario's s. 112. But, says Nevison, "they weren't willing to put that $1.5 million into the ground here with the risk that the condomin- ium corporation could tell them, 'We don't want that system any more after the 13th month.'" 24 JULY 2010 www. C ANADIAN Law ye rmag.com Untitled-4 1 6/15/10 4:24:15 PM