New Regulations for BC Strata Property Act

By: Ted Denniston and Sally Thompson

Depreciation Reports will facilitate building upkeep

The new regulations for the BC Strata Property Act have been introduced. The summary of the changes was published by the Office of Housing and Construction Standards. These changes include new requirements for Depreciation Reports, which are the reports used to determine the appropriate amount for the annual contribution to the contingency reserve fund. Depreciation reports are important to the long-term stability of a Strata, allowing them to save the money that will be needed to maintain and renew the common property

Highlights include:

• Depreciation reports are now mandatory for complexes with 5 or more strata lots unless the strata corporation exempts themselves by an annual ¾ vote. Strata corporations have until December 13, 2013 to obtain a depreciation report or hold a ¾ vote to exempt.
• Depreciation reports are to be carried out by a qualified person, who has knowledge and expertise to understand the individual components, scope and complexity of the strata’s common property.
• The Regulation requires that the Strata identify their depreciation report provider’s qualifications, error and omission insurance (if any), and the relationship between the person and the Strata. 
• Depreciation reports are required to be based on an on-site visual inspection of the site and all common (and limited common) property components, e.g., the building structure, exterior walls, roofs, windows, doors, balconies parking facilities, mechanical and electrical systems, landscaping, etc.
• The Depreciation Report must include a component inventory and evaluation of the property components.
• For each component, the report must provide an estimated service life related to any repairs or maintenance work (which usually occurs less often than once per year or that do not usually occur) over a 30 year period.
• The report must provide a financial forecasting section, including forecasting projects over 30 years, interest and inflation rates, and must provide three cash-flow funding models.  
• Updates must be completed, including a site review, every three years.

The regulations also define minimum and maximum contribution limits based on percentages of the annual operating budget.

• If the balance in the fund is less than 25% of the budgeted operating expenses, then a minimum of 10% of the operating budget must be contributed. 
• If the fund balance is higher than 25% of the operating budget, then additional contributions can be made if approved as part of the annual budget approval process  (which requires a simple majority rather than 75% as it used to).

Halsall has been providing Contingency Reserve Fund Studies in BC for ten years. The existing reports are compliant with the new regulations in all material respects. 

Should I use injection sealing to repair my slab?

Injection sealing is a technology where a grout material is injected into a leaking crack to prevent leakage. While there are many circumstances where this is an excellent repair method, there are some circumstances where it is simply not appropriate. It is important for building owners to understand these circumstances so they can be sure that injection-sealing is properly deployed.

If the leaking water is generally free from chlorides, then injection sealing is a cost-effective and appropriate repair. This would be the case for most foundation walls, on the underside of suspended slabs which are covered in plants (below a lawn for example) and generally in southern climates where de-icing salts are not used. The goal in these locations is to prevent the annoyance of water dripping into the facility below.

If the leaking water is chloride-contaminated, then injection sealing may cause more harm than good. Chloride-contaminated leakage would occur in northern climates below parking decks, parking lots and driveways.  This is because de-icing salts are applied in these areas, adding chlorides to the melt water.  The goal in these instances is two-fold: to prevent the annoyance of water dripping into the facility, and to protect the reinforced concrete structure from chlorides.

Why do chlorides matter?  When chlorides penetrate concrete, they depassivate the embedded reinforcing steel.  If oxygen and water are also present (and they usually are), then the embedded reinforcing steel starts to corrode.  The corrosion products take up more space than the original steel and therefore typically cause the concrete cover over the reinforcing steel to break off (this is also known as delamination or spalling).



Concrete Delamination - Copyright Halsall 2011

Injecting a leak in an area with chloride contaminated leakage can actually trap the chloride contaminated water in the crack or on the top surface of the slab. Injection sealing is usually completed from below.  Ports are drilled on an angle to intersect the leaking crack. The injection material is injected under pressure.  Done well, the injection material should completely fill the crack from the top of the slab to the bottom of the slab.  However, this injection does not fix the fundamental defect in the waterproofing system above the slab.

Water trapped in the depth of the crack, or on top of the slab (below the waterproofing membrane) can hasten the chloride-related corrosion and deterioration. In locations exposed to chlorides it is far better to excavate from above and properly repair the defect in the waterproofing membrane.  This not only stops water from dripping on occupants below, but also protects the slab from the chlorides, minimizing structural deterioration over time. The repair costs more in the first instance than injection-sealing, but less in the long-term because it reduces the risk of structural deterioration.

A proper condition evaluation and specifications should ensure that the appropriate repair methodology is used in the appropriate locations.

Glass-Clad Condos

Mary Wiens of CBC Radio One (99.1) is doing a series on Glass Clad condos starting November 14, 2011 on Metro Morning. The series includes interviews with John Straube (Building Science Professor at Waterloo), David House (developer), Sally Thompson and Doug Webber (Engineers at Halsall Associates), Janice Pynn (representing CCI National) and Linda Pinnizotto (Real Estate Agent). The series explores the concept that window-wall clad towers, when compared to towers clad with a lower percentage glass (and a correspondingly higher percentage of highly insulated wall system) might prove to be very problematic in the future as energy costs rise.

CBC Television at Five and Six will have a three-part series as well, featuring some of the same people, along with Ted Kesik (University of Toronto), Jake Smith (engineer at Halsall Associates) and Martin Blake (condo developer).

As a society we need to stop accepting that dishwashers and fridges have Energy Star labels, but buildings do not.

Tune in at 7:40am next Monday to Friday at CBC 1 (99.1) or at 5 or 6 pm Monday to Wednesday on CBC Television to follow the story.  Also, join in with the online component of this story to voice your views.

Sally on "The Tonight Show"

I will be a guest on the Tonight Show next Friday, November 4, 2012 at 11:30am.  I have been invited on as an expert on "Secrets to Successful Contracts and Tendering".

Well, OK, it's not the real Tonight Show, but it should be an entertaining facsimile complete with commercials, "the man on the street" and David Letterman's Top Ten (what's that? David Letterman didn't get the tonight show? of course he did - you are remembering wrong!).

Join us at this entertaining session at the ACMO CCI Conference at the Congress Centre on Dixon Road!  Have some fun and learn about contracts while you're at it.

The Condo Board is the Asset Manager

In Commercial Real Estate, properties are overseen by both a Property Manager and an Asset Manager.  The Property Manager oversees the day-to-day operation of the facility.  The Asset Manager oversees the property at the "investment" level.  The Asset Manager is responsible for maximizing the value of the property by setting and implementing a strategic vision for the property.

In Condominiums, there is clearly a Property Manager, but who is the Asset Manager?

It's the Board of Directors.  Boards need to understand this role and make sure that they take time away from the day-to-day oversight of the Property Management function to also focus attention on their Asset Management role.  This means that investments in capital repairs should be viewed through a filter of the role of the investment in the long-term vision for the property. 

Forgetting the Asset Management role invariably leads to short-term decisions and the gradual decline of the quality of a property.

Odour Transfer in Highrises

The following is a response I wrote to the question "What can unit-owners in highrise condos do about odour transfer" for CCI Toronto.

Odour transfer in high-rise buildings is a frustrating reality. While the building mechanical design incorporates some features intended to minimize odour transfer, such as pressurized corridors, this design methodology is far from perfect and there is inevitably some odour transfer that cannot be prevented.


If an owner experiences odours in their suite, they should do a little investigation of their own to gather information before contacting management. This will help to identify if the smells represent a deficiency that can be repaired, or if they are experiencing normal conditions. This will help prevent false expectations and minimize unit-owner frustration.


Odour coming in around the entrance door from the corridor can relate to a variety of causes:

- Make-up air unit not operating (or providing an insufficient amount outdoor air) so the corridor is not sufficiently pressurized. This allows odours from one suite to travel into the corridor and then into other suites. Repairing or rebalancing the make-up air should help.

- Strong odours can leave one suite and enter other suites even when the corridor is adequately pressurized. The only solution here is to ask Management to make sure that the odour generator is running their exhaust fan to minimize odours. If they are, then residual odour transfer through the corridor would unfortunately be considered normal.

- Strong winds, exterior temperature extremes, open windows, and excessive exhaust can impact pressure in the building causing some odour transfer that wouldn’t happen under normal conditions. This should only happen sporadically and is considered normal. Make-up air unit drawing in odours from the exterior and pumping it into the corridors. In this case, the odour would be present on all floors of the building. The solution is to ask Management to try to relocate the source of the odour or the intake for the unit, if possible.

Odour coming in through your bathroom or kitchen exhaust generally indicates an outdoor source. A neighbour may be smoking or cooking on their balcony or smells may be being exhausted from one suite and then drawn back into yours. Typically the back-draft damper on the exhaust fan outlet (at the exterior wall) will be found to be sticking open. This allows air to travel backwards through your exhaust ductwork and into your unit. A sticking back-draft damper can be repaired. This may be a unit-owner or a Corporation responsibility depending on your declaration. If odours still penetrate when the damper is fixed, the best solution is to run the fan when the offending odour occurs so the air is flowing outward instead of inward.

Odours in other areas of your suite (away from the bathroom exhaust, kitchen exhaust hood, and away from the corridor door) generally indicate transfer through a floor or wall. These floors and walls are also fire separations, so they should be continuous and incorporate “smoke seals” (which are also “odour seals”) in buildings constructed after 1990. In this case, the odour transfer may also indicate a breach of the fire separation. Typically property management will need to hire a consultant to do a pressurized smoke test to determine the source of this type of odour transfer. Pre 1990 buildings had fire-stopping without smoke sealing, so unfortunately, odour transfer across these walls or floors would be considered normal.


The number one source of odour complaints is cigarette smoke. The easiest way to prevent this particular odour transfer is to create non-smoking buildings. The builders are reluctant to do this because they think they are limiting the size of their purchaser marketplace. Interested condo owners should petition the builders to start creating non-smoking condominiums (like one built in Ottawa). Contrary to their concerns, it is highly likely that they would have a waiting list of purchasers wanting to live in a non-smoking building rather than a shortage of buyers.

10% of Less is Less

Many new Ontario condominiums have their first year reserve contribution set at 10% of the operating budget, as this is the minimum contribution allowed by the Condominium Act.  This has always been problematic, because most buildings require at least twice this amount to adequately fund their reserve.  When the first year reserve fund study is completed, the maintenance fees must climb dramatically to cover this increased reserve contribution (not to mention a possible hefty increase to the operating budget). 

Unfortunately this can be expected to get worse before it gets better!!  New condominiums are being designed using green standards (such as LEED™ or the City of Toronto requirements).  Generally speaking, these buildings have utility costs individually metered to the suites rather than being included in a building-wide utility bill.  This drives the corporation's operating budget down significantly.  Now, when the builders set the first year reserve contribution at 10% of the operating budget, they are working with a much smaller budget; so 10% of less is less.  Unfortunately, individual metering does not reduce reserve requirements (these buildings will still require renewal of their walls, roofs, windows, central plant etc).  This means that these buildings will have an even larger increase between their first and second year maintenance fees than we have traditionally seen.

The sad part is that a reserve fund study can easily be completed from a set of drawings, so there is no excuse for a builder to not know what the required reserve contribution should be.  Unfortunately, a builder who diligently took this path would appear to have priced themselves out of the market when buyers compare the first year maintenance fees across the market.  This cannot be expected to happen builder by builder; it requires an industry-wide change to the Condominium Act. 

Hopefully CCI-Toronto's initiative to get this change and others made to the
Condominium Act will be successful and this situation will become a thing of the past.

Beware VFDs on Make-up Air Units

Many owners of residential buildings are installing variable frequency drives on their make-up air units to save energy.  This is a very effective way to save money, however, it often creates unexpected problems.  Unfortunately, when you reduce the flow to, say, 60% of design flow, you do NOT get 60% of the flow out of each grille in the system.  Instead, you may get almost 100% of design flow at the grilles near the fan, and almost no flow at distant grilles. This means that floors distant from the fan are starved for fresh air.  This is causing air quality complaints as well as significant condensation problems. Not providing adequate fresh air also contravenes Property Standard bylaw requirements.

The problems characteristically presents with condensation on the lower floors of the building (if the fan is on the roof).

The building owner could attempt to balance the system at the lowest flow setting, but this may not be possible, as the pressure may not be high enough to get 60% of design flow at the furthest grilles.  Also, balancing at 60% flow (if it is even possible) means that when the fans run at 100%, the velocity will be very high at the top floors, possibly causing the air to blow right by the grilles (starving these floors) and almost certainly creating noise concerns.

A reasonable middle ground might be possible by balancing at some intermediate flow level (perhaps 80%) and foresaking some energy savings for better air quality.

A good starting place is to see if the original design provided excessive air flow. In this case, an across-the-board reduction in air flow might be possible, avoiding the need to cycle the unit up and down altogether while still generating energy savings.

Also, some systems are scheduled to reduce flow at night however, at night, the building is almost fully occupied, so this is the wrong time to reduce flow.  Occupancies are likely to be less during the day rather than at night.

In summary, using a VFD on a make-up air unit presents a host of problems.  Owners should be wary when proceeding down this path.  While the energy savings might be compelling, the related air quality and condensation problems might outweigh the benefits.