Mayoral Candidates Stymied by Mayor's Tower Renewal

At a recent mayoral candidate debate (for the City of Toronto), candidates could not come up with reasonable answers as to why rental landlords are not upgrading their buildings.  Their answers related to making funding available, low interest loans etc seeming to believe that rental landlords were simply not enlightened about the opportunties.  None seemed to understand the crux of the matter, which is that the Tenant Protection Act serves as a disincentive for rental landlords to upgrade their buildings. Adam Krehm, from O'Shanter Developments summarized the frustration of rental landlords eloquently in a report which I have forwared to Rob Ford.  Excerpts are copied below:

"• The concept of “cost no longer borne” causes the annual amortized portion of any investment made for the purposes of saving energy or water to be removed from the buildings annual operating costs when the investment has been largely amortized the rental income is then reduced accordingly. Thus the payback on the investment is eliminated about the time the investment is fully paid for. Thus the incentive for the investment is eliminated. Alleviating this problem would stimulate the desired energy conservation investment.


• With the existing rent control legislation if the absolute dollar value of a particular utility cost is reduced the regulations stipulate that this reduction be passed back to the tenants in the form of reduced rent. This requirement acts as a deterrent to the owner investing to cause large reductions in energy or water consumption.

• Under current rent control legislation if a capital expenditure is made to reduce a utility cost and the building has never been taken to rent review seeking an above guideline increase due to increased utility costs then the points made in the preceding two bullets do not apply. In the context of encouraging energy and water conservation in rental apartment buildings this is clearly irrational.

• It seems obvious that the idea that reduced utility costs should all flow back to the tenants in the form of reduced rents is at odds with the objective encouraging building owners to invest in reducing their building’s energy consumption. I would argue that any attempt to both pass the savings directly back to the tenant while simultaneously encouraging private sector participation is likely to require a cumbersome administrative system that is unlikely to function as intended."

The organizations representing rental landlords of Toronto need to meet with the new Councillors after the election to help them understand the conundrum they face so that the City of Toronto can better support the landlords in effecting change that will balance the protection of tenants with the incentives needed to green existing buildings.

CCI Toronto Hosting Mayoral Debate

MAYORAL CANDIDATES FORUM!!


Thursday, September 30th, 2010, 2:00-5:00 pm
Novotel North York Hotel, 3 Park Home Avenue, Toronto, Ontario

This will be your chance to interact with Mayoral candidates for the upcoming Toronto municipal elections and to hear from those that seek your vote in your area of the city.

Focusing largely on issues pertaining to condominiums, the candidates will be able to answer your questions so that they better understand the special needs of condominiums in Toronto. And in turn, your comments can impact their attention to the issues that are important to you.

This will be your best chance to see and hear the candidates before Election Day.

Mayoral Candidates attending:


Rob Ford
Joe Pantalone
Rocco Rossi
George Smitherman
Sarah Thomson


REGISTER EARLY AS SPACE IS LIMITED. YOU DON'TWANT TO MISS THIS EVENT!!
SEND US YOUR QUESTIONS!  goto http://www.ccitoronto.org/Events/seminars-Sept30-2010.asp


To better prepare for the discussions, please email CCI-Toronto with your question to present to the Mayoral candidates.
Send to:ccitoronto@taylorenterprises.com

Protect the Finish Warranty on your Common Elements

Each individual who purchases a house or condo in Ontario completes a PDI under their Tarion warranty.  This allows them to claim damage caused by the builder during construction.  But what about the common elements of a Condominium?  By the time a year has passed and the Performance Audit is issued, no one can prove who caused the damage to the finishes in the common elements.

While some builders are cooperative a repair the damage noted in the first year, regardless of the source, most will argue that the damage was caused by residents, and refuse to repair.

To maximize the likelihood that the builder will pay for repairs, the Property Manager can complete a PDI-type review of the common elements as soon as they arrive in the building (documenting the chips, dents, scratches and similar that are clearly from construction) and then to remain aware of the work being done by the builder during the first year so that new damage caused by their activities is clearly documented and related to those activities.  Without this sort of rigorous documentation, there is no way to prove who caused the damage.

Of course, the better solution in my mind is the win-win solution where the two parties agree that the damage was likely caused by BOTH residents and construction, and agree to split the cost to repair.  Neither feels taken advantage of, and both end the day feeling that the situation is fair.

Tarion Highrise Guidelines Coming

Tarion is developing a Construction Performance Guideline for Common Elements.  The existing Construction Performance Guideline was written to address the needs of individual homes and other low-rise construction, but has never served the high-rise condominium market adequately.  This document will help condominium corporations, Performance Audit authors and builders better understand what has warranty coverage under the Tarion warranties and what does not.  This should reduce the currently never-ending negotiation and make the resolution process more transparent for all involved.

Tarion is also soon rolling out a new claims process for common elements which should radically reduce the time it takes to resolve the claims made under the 1st and 2nd year warranty claims for condominiums registered after July 1 2010.

Both initiatives will be a welcome relief to the industry and to condominium boards.