CONDOVIRUS EPISODE 8
Rod: Good evening everybody. My name is Rod Escayola and I'm a condominium lawyer with Gowling WLG. I'd like to welcome you to our Condovirus Episode 8. After last week's long and winding road, today's episode is the "Light at the End of the Tunnel". I want to first start the episode by wishing a very happy birthday to two very good friends at home. Two condo misfits, just like everybody else on the line, Janine and Eric, I know they're watching because they can't go out, that's why they're watching on their birthday. I know it's a big number for one of you but, Eric, your secret's safe with me. For those of you who are joining us tonight for the first time, we've been holding these on a weekly basis. We're at episode 8, as I said, and what we do week after week, we try to give you real practical answers to the questions you didn't even know you had. The situation changes. Even this afternoon there was more new information for us to try to absorb and also every week we get tons of questions from our viewers. We love it. Keep sending them. We build our agenda on those. What we do, we try to answer your questions, I invite key industry experts and week and after week they're generous enough, or maybe they're bamboozled into joining us. They think maybe that there's a door prize. There isn't. Sorry folks. What I'm going to do, I'm going to go around the table and I'll introduce them to you. What I'm going to do is I'm going to also show all of the panelists here. Let me go around the table and introduce our players.
From Adams & Miles LLP, the man with a plan, Brian Antman. Good evening, Brian.
Brian: Afternoon.
Rod: Good afternoon. From Wilson Blanchard Management, the godmother of condo management, Sandy Foulds. Hi, Sandy.
Sandy: Good afternoon.
Rod: Another extraordinary manager, the Mary Poppins of condo management, Katherine Gow. Katherine, before the end of the seminar I'll ask you to come up with a Mary Poppins saying. So you have about an hour. They say that not all heroes wear capes. She's the living proof of this. Leading the avengers at Lash Condo Law, we have with us tonight, Denise Lash. Hi, Denise.
Denise: Hi. Good evening everyone.
Rod: We have had with us, for the longest time, our regular condo twins. The first one to sport a beard before COVID beards were a thing, ... himself, Graeme MacPherson. Hi, Graeme.
Graeme: I'm a trendsetter.
Rod: That's right. The trendsetter. Speaking of beards, our litigation Viking, David Plotkin. Hi, David.
David: Good evening. I had to buy myself a beard grooming kit for the first time.
Rod: You'll have to share tips. Now, with his arrival on our panel we went from condo twins to condo musketeers. Good evening, Josh Milgrom.
Josh: Hi everyone. Thanks, Rod.
Rod: Our safety and security expert, our own Agent 007, Jason Reid. Hi, Jason.
Jason: Good evening, Rod. Good evening everybody.
Rod: Good evening. From Keller Engineering we have our eager beaver, Justin Tudor. Hi, Justin.
Justin: Hey, Rod.
Rod: Let me see if I can put the screen now back on. I'm not sure if I'll be able to do two things at once. Tell me if it's there. Okay, so this past week we've received hundreds of questions from all of our viewers. We'll do our very best to try to answer them as much as possible. We'll do something a bit different this week. We have David and Graeme looking at the chat channel, and we'll try to bring some questions out and we'll try to answer them live as we go, as much as possible. What else we got here? Today's episode is about re-opening condo land. Now, don't get excited. Don't get carried away. We're not saying to go ahead and re-open it now. We're saying that you need to prepare now, for the eventual re-opening of condo land, whenever that's going to happen. Closing down, believe it or not, was the easy part. Re-opening it, in an orderly and safe fashion, is going to be far more difficult. You're going to be under tremendous pressure from the owners who will want to have their amenities re-opened. But you need to consider different factors. There's different considerations that go into the equation because you need to do this safely, as I said, and in an orderly fashion. It needs to make sense for your constituents, for the corporation, for your community. That's what we're going to focus on today.
Before I dive in, my disclaimer as we do every week, please keep in mind that whenever we refer to legislation we refer to Ontario legislation. Keep in mind that the information we provide you today is, to the best of our ability, accurate as of the date of this broadcast, which is May 6th, and the situation changing everyday this information may become stale fairly quickly. Most importantly, the information we provide you tonight is of a general nature. It's for general use. It may not necessarily apply to you. It may not necessarily answer your specific situation. It's important that you go out there and seek professional advice tailored to your very specific situation to get a solution that works for you. Finally, this session is being recorded. The bonus behind that is that we upload it on our condoadvisor.ca website. Top right, there's a webinar tab, you can click on that. You can see past webinars. Don't ask me how long it will take me to post it up. It usually takes a couple of days. In a couple of days you'll have it there. We also post the chat now because a lot of people have been asking for the chat so we also post the exchanges. We've changed the order also. We're going to start, apparently, I'm not sure if we're going to start with that. We're going to start with you, Graeme. Maybe you can walk us through the latest emergency orders, and what has been adopted on Monday, and what has been adopted today at 1:00. Can you help us make some sense of that?
Graeme: Yeah. Certainly. This questions actually came up in chat just now, was that the emergency order, with respect to the essential businesses and may of the various orders that have been made under the Emergency Management and Civil Protection Act, were originally set to expire today. But an order in council has been made, extending those until May 19th, for now. Then in terms of other updates we've received from the Provincial government, as of Monday at 12:01 sharp, certain businesses became open again. We've underlined the ones that may have an effect in condo land, perhaps. One in particular, it starts with an L, it's a word that has found its way into several of our webinars, the old landscaping. It's now official that landscaping businesses are permitted to open their operations.
Rod: Wait, wait, wait, wait a second. Wait a second. Did you just say that landscaping is now allowed in Ontario?
Graeme: It is now allowed in Ontario as of May 4th, at 12:01am.
Rod: So I'm not one to brag, but if it is now allowed, it means it was not allowed before which means that this panel was right all along. Anyway, I just wanted to say that. Go on, Graeme.
Graeme: Rod, ever not one to brag? So we're also seeing that some additional essential construction projects, including site preparation, excavation and servicing for residential developments are allowed open. While this is separate and apart from condo related stuff, if you wanted to go to the carwash or buy a begonia at the nursery, you can now do that as well. Golf courses and marinas are also opening but not to the public. Just for the purposes of preparing for the upcoming season. May be a light at the end of the tunnel. We're going to have to keep monitoring the situation.
Rod: Okay. Okay. Well maybe we don't see the light at the end of the tunnel quite yet, Graeme, but we see the tunnel. So we're moving forward.
Graeme: We do.
Rod: That's great. What about what happened today?
Graeme: So, yes, yeah. Today at 1:00pm the office of the Premier made an announcement that they were planning on several more businesses opening next week. So garden centers and nurseries are going to be doors open. You can come in in the same way that we can go into the grocery stores right now. Similarly with hardware stores and safety supply stores. That's going to be in effect next Monday and the next Tuesday. Then on May 11th retail stores with street entrances are going to be allowing curbside pick up and delivery. Also, we're going to be seeing an expansion, again, of the essential construction that's allowed. That's going to include below grade multi-unit residential construction projects that can now begin and existing above grade projects can continue. We don't have any more clarity on it than that right now. We're going to have to watch and see what the actual order in council that comes down says in terms of text.
Rod: Okay. Maybe we can ask Justin later on, when we get to him, maybe he's got some insight on this. Anything else, Graeme?
Graeme: Just something to keep in mind with respect to all of these openings especially if we are going to see more openings happening. It's important to remember that even if the Province says it's okay to do X, Y or Z, condominium corporations are still able to be more restrictive. So, it's just worth keeping in mind for directors out there that if you face pressure from owners to open amenities because if the government says a gym is allowed then it's allowed. Condominiums are still entitled to open the amenities at a rate that works for them, based on their circumstances, and they don't have to exactly open at the same rate that the Provincial government is opening amenities in the public.
Rod: Okay. Maybe on that slide, I saw a question on the chat about what is included in landscaping. I just can't shake off this topic, landscaping. So, we don't have a lot of guidance on that. Whether or not landscaping actually includes softscape, or whether it includes hardscape, and to what extent it includes hardscape. In my view, I don't imagine that the landscaping permission now actually authorizes, or allows, a very sort of substantial hardscape work. Installing or building supporting walls or cement planters. We don't know that but I have a feeling that that kind of work falls more into the construction side of the orders in council. That's pretty much the extent of what we know for now but it's a bit of a touch and go, to answer the question on chat. David, I'm going to turn to you now. What I'm going to ask you is whether you can walk us through the Province's re-opening framework.
David: For sure. We touched on this a little bit last week and I'll go into a little more detail now. Sorry, I'm having an audio issues but hopefully you're able to hear me okay. The Province has set out a three stage process. These stages don't have express timeframes. They're suggesting about 2 to 4 weeks per stage. The suggestion is the first stage, on the advice of the public health authorities, they would be opening up certain workplaces, allowing for some small gatherings and maybe for us, what that means in condo world, is in person board meetings, perhaps. Stage 2 is opening up more workplaces and more outdoor spaces, allowing some larger gatherings. Maybe that means smaller AGM's. The third stage, further relaxing the restrictions and then we'll have to see at that point, I mean of course this is all speculation, but what's going to remain in our lives from the move we've made towards some virtual and hybrid type meetings and what's going to go back to what was the old normal.
Rod: Right. Right. And maybe under stage 2, the opening of outdoor spaces, I think that maybe they'll be relaxing some of the parks or the play structures that exist in certain condominiums. We don't know that but we could see that probably falling into that category. There's really three stages that I see here. From a more restrictive one at stage 1 all the way to going back to Woodstock at stage 3, where hopefully, well I don't know if we'll be back to that normal, but I'm not sure that was ever normal. But so that's the framework but we don't have any dates, David, do we?
David: No. No dates. 2 to 4 week approximations and we don't really know when each stage starts or ends.
Rod: Right. So, that brings me to the next topic and I think Graeme actually touched upon it. This is the key message for you today. Sure, watching what the Province does is going to give us all a very clear direction, and some clues as to what can be re-opened and when to re-open things, but it's important for all condo corps out there to remember that ultimately the decision to re-open an amenity, and to provide a service, ultimately that decision will rest solely with every condominium corporation out there. The Province decision to re-open certain businesses is motivated by other factors and considerations which don't necessarily apply to the condominium world. For instance, we're not concerned about relaunching the economy. It's a laudable consideration to have but that's not one that is really relevant to condominiums. The fact that the Province, for instance, re-opens gyms or fitness centers does not mean that you have to re-open yours at the same time. You should re-open yours when it's safe for you to do it, when you have the resources to keep it operating, when you're able to meet all of your other requirements and obligations. Remember that condo corps can always be more restrictive but not more permissive than the Province. So you can't re-open it before the Province authorizes you to do it but you can certainly delay the opening until you're prepared to do it. That's at least how I would approach it. You'll have to ask yourself really two questions. Is it legal at this point and time for me to (insert the activity) have an AGM, re-open the gym, whatnot, is it legal? Is it permissible? Then the next question, is it safe to do it? Is it wise to do it? Every condo corporation will be different. It's going to vary depending on the demographics of your condominium. It's going to vary depending on the setup of your condo corporation. Each condo corporation presents different risks, different vulnerability. How big is your exercise room? How many machines do you have in there? What's the density in there? And so on and so forth. If at one point you need to pick between putting some of your resources on proper maintenance and disinfecting protocol of high touched areas, or maintaining your fitness room, you probably want to deal with what's really more important, which is to ensure the safety and security of your community. Keep in mind that at the end of the day condominium corporations, we can't stress that enough, condo corporations are responsible to take reasonable steps to ensure the reasonable safety of the occupants. Of anybody on the premises. Ask yourself these questions before you sort of fall in the trap of really wanting to re-open your amenities, just because you need or feel you want to re-open, or just because the owners are pushing you to re-open them. Also keep in mind that, I was making a joke about returning to Woodstock, but keep in mind that we may be actually returning to, I hate the expression, but a new normal. So re-opening the corporation may not necessarily mean returning to what you had before. It may mean returning to something a bit different and the panel today will focus on that, hopefully. I should have changed the slide here but I can't do anything. This is the slide that we just covered now. I'm going to turn to you, Jason, now if I could. I've brought you to the front of the queue, Jason, to give you a bit more time. You have two topics that are really of interest to me, anyway, today. One is you're famous re-opening amenities risk assessment and you're going to walk us through a tool that you've developed which is fantastic. And you're also going to have to, sadly, remind us of fire safety. I think we're facing an increasing fatalities. Let me unmute you if I can. Maybe you can walk us through these two topics, Jason.
Jason: Yeah. As a condominium corporation it's also a workplace. Under the Occupational Health and Safety Act we have a requirement, as a condo corporation, to conduct risk assessments for any tasks or jobs that our staff would do within our workplace. That applies to supervisors as well. That's really important when we take a look at addressing the hazards within the workplace for the employees. When addressing the hazards with amenities, or re-opening or re-engaging amenities, my recommendation is that you follow that same kind of methodology or same procedure. For the simple reason is, it's accepted across the Province of Ontario. The principles are guided, internationally accepted, and it works. When I suggest a risk assessment it allows you to go into that room and look at it almost as what's the function of this room? So let's use a gym for example. The gym has a function for people to go in and work out. Within 2 minutes of people working out they're going to be breathing heavy. The confined space will us allow, the machines. You've typically got machines packed into these rooms so that you can get more people in there to more use them. You're going to have to look at it through the lens of a risk assessment to both staff going in there to clean these areas, or service, or inspect, or patrol these areas, but you're also going to have to look at it through the lens of the residents and the acceptable risk, and have a methodology that's proven that your condo corp or workplace, can develop that. So, here's some examples. Bear with me.
Rod: I went back one slide. I think these are the examples you're looking.
Jason: Yeah. So, conduct a hazard assessment for each. With respect to the employees, there's some tips you can do. Stagger employee start times, lunch and breaks. You've got to notify the service providers of your condo of your new workplace rules and guidelines and where are you getting those rules and guidelines from? Your getting them from that risk assessment. In that risk assessment you're going to identify the PPE required for those employees. Now that you've identified that, which we all know what they are, we've got a provide our employees written direction on how to use that and access that PPE. And in the Occupational Health and Safety Act we've got to post that even. I think you can also have staff acknowledge it. But getting back to the risk assessment in the amenities. There is a wonderful hierarchy of controls that have been internationally accepted and I suggest you apply them through the lens when you're looking at opening up these amenities. So PPE has historically been looked as the most basic form. It's less effective of providing protection.
Rod: Jason, what's a PPE?
Jason: Personal Protective Equipment. Sorry.
Rod: Okay. Good. Thanks.
Jason: So, a solution that is really simple. Throw on a mask and go to work. Or throw a mask on everybody and have them return back to that amenity room. That's proven that it's not the most acceptable way of doing this. If you are going to open an amenity you're probably most effective opportunity is to ensure that social distancing maintains every 6 feet. So if you've got four machines in your gym you could be reducing your gym down to two machines now. Then you've got considerations for additional cleaning. Then you have considerations for additional patrols. Then you have considerations to make sure those staff are prepared to do those things and you have those resources and finances to do it. As an example, we had one condo board look at an additional five, to six, to seven thousand dollar additional fees just considering opening up two amenities within their building. Those two amenities would only service two people at a time. So they started looking at was that that risk and that hazard assessment effective? Absolutely. They're making the decision based on facts through the lens of internationally accepted principles and they're able to articulate why they're not opening those amenities.
Rod: Right. Can you help me understand the other ones, like administrative control, engineering control? What is that?
Jason: Yeah. There's probably different types of controls. So, as an example, some of the patrols you can eliminate or remove the hazard. You can substitute a hazard which means replacing it with something else. But some of the engineering controls is isolate people from that hazard. Or modify a piece of equipment to make sure that there's no more concerns in there. So those are levels you can address. Eliminate, substitute, implement engineering controls or structural changes and then there's policy and procedure and administrative changes that you can make.
Rod: And those could be the rules that the corporations have, or the scheduling, or the policy they'd put in place no more than the next person per at the time in the gym. Okay. That makes sense. Can I show your chart? Okay. Let me put it on and maybe walk us through this. We're going to post that on condoadvisor as well but walk me through this one.
Jason: Please do. As an example, if I'm a condo corporation I should have one of these or two or three of these filled for every employee or person that I have in my workplace. I should be reviewing what do they have to do in their job? What are the health or safety hazards associated with each step of that job and what types of controls are required to address those health and safety hazards? And again, those controls are based on that hierarchy of items you can choose from. So, really, risk that multiplication of consequence, probability and frequency and you can develop a risk score. I'm more than happy to share the risk profile document with you as well so that you can get it up on the website. It further explains how to use this. As an example, you can actually rank which job your superintendent does that has the highest health and safety hazards. That's where you would focus on addressing those controls. For example, they have to change these lights. In order to change these lights they have to bend down and pick up a bulb. They have to get on a 7 foot ladder. They change it and then they come down off that ladder. What are the health and safety concerns? They're now working at heights and are potentially bending over and picking up items. I can now, clearly, address those two items with either engineering controls, policies and procedures or personal protective equipment and document that.
Rod: Let me jump in. When I was looking at this chart initially I thought that it could easily be adapted. Rather than to focus on a job, or on a role, you could almost use it by focusing on a service provided or on an amenity that's being re-opened. You could ask yourself, for the gym for instance, or going to the garbage room, or using the concierge, or the valet parking, so if you look at the service or amenity as opposed to a step job, you could almost use it, I think, the same way. You'd ask yourself what would be the health and safety hazards that could be associated with this. With using the pool, using the sauna, whatever it is and you could probably use it that way, I think, you could not?
Jason: A 100% and that's what we're suggesting is because this is a proven model accepted throughout the Province and throughout internationally. You can use this to actually review some of your risks within your amenities. Absolutely.
Rod: Wonderful. Okay, let me move you to the next topic so we don't run out of time. Sad stats here.
Jason: Yeah. Listen, these are really tragic numbers. Quite simply we're seeing a large fire fatality increase over the Province of Ontario. Right off the bat, since January 1st of this year we've had 51 fire fatalities in Ontario. In March alone we had 17 Ontarians die from fire. These are unacceptable numbers. That's a 65% increase from this time last year. The Ontario Fire Marshall's offices, and Toronto and the GTA Fire Services are up and running. They are working and supporting the communities but the number cause remains, unattended cooking. We're seeing more and more people cooking, more and more people cooking who are not used to cooking, and they're leaving those cooking unattended. So if there's a message to communicate to your community definitely please focus on that one. In fact, we've even gone virtually. I'm holding a session at 7 o'clock tonight. We're booked solid. We're actually delivering resident sessions, virtually. We're holding staff training sessions for condo staff, virtually. So, we're seeing a shift. Still that demand is there for the code compliance. It's now going virtual. I encourage you to communicate that to your residents.
Rod: Okay. And, maybe let me turn to David or Graeme. Any questions from the floor that are relevant to this section before we let Jason go?
David: Yes. There's one question that's come up a few times in this context and in others. But I think here's a good place to talk about it. What about making owners sign a waiver? You want to open up an amenity, with or without whatever protection the corporation decides, and you have owners sign a waiver to basically sign anyway liability. Is that a good idea and is that something that any of you would advise?
Jason: I'm not a legal expert but anytime I'm in a position to make you sign a waiver to go into the gym and work out, or to use a movie theatre room, I'm probably doing that because I know that it shouldn't be open. Or I have some factors that would lead me to believe that maybe I'm having second thoughts.
Rod: I wonder if one of the legal minds wants to jump in. I don't know, Denise or Josh? If not I'm going to tackle it, maybe, I don't know.
Denise: Well, I'm just going to say I agree with Jason, completely. Putting out that waiver is suggesting that there's something that you're not doing. I think if you're fully confident that the facilities are properly maintained and safe, then there shouldn't be the need for the waiver.
Rod: Right.
Josh: Rod, I'll jump in on that too and just say that waivers aren't bulletproof in any event. Even if someone is signing a waiver it doesn't necessarily shield the corporation from liability. I wouldn't rely on that as justification to start opening things up when maybe they really shouldn't be.
Rod: Right. I was going to say exactly that. They have limited value. Graeme, do you want to jump in?
Graeme: Yeah, if we're just all dog piling on it my two cents of it, if the consideration here is should we get a waiver because this is risky, maybe the question to be asking is should you be opening this amenity right now?
Rod: Right. Right, right, right. Okay. Jason, I think I'm going to switch topics now if it's okay with you, and I'm going to turn to our inhouse engineer, I'm going to go over to Justin. I think we sort of covered already, Justin, the orders in council. I don't know if you have anything to add to that before you tackle your main topic.
Justin: No. Not much there.
Rod: Okay. So do you want to tackle the prompt payment legislation and, folks at home, keep in mind that the topic today, the main direction is, returning to normal. Re-opening business. So what does that mean when we finally are able to start to get work being done at the corporations? Take it home, Justin.
Justin: Yeah. This year was going to be hard for running construction projects and ensuring everybody adhered to the new prompt payment legislation without COVID. But now that people are locked up and they're not meeting as much, and everybody's afraid to touch the mail, and managers are extra busy because everybody's at home, and might miss an invoice, or because work might not be able to get inspected, this is going to become more important than ever. If all goes
Rod: Oh, we lost you there, Justin. Okay you're back on.
Justin: Alright. Condos are going to have a little bit harder time paying their bills this year. And this year is a year that the government of Ontario has provided an extra tool to contractors to ensure that money gets in their pockets and gets to their pockets quickly. So the Construction Lien Act, from 1983 was amended in 2018 and 2019, with two major changes. One, was the modification of the holdback provisions. There's a whole bunch in there but simply put it went from 45 to 60 days. Then there was the introduction of a massive prompt payment regime. That's what I'm going to talk about here today. Essentially it provided a way for contractors to ensure all owners are paying their bills in a timely manner and if they intend to dispute them there is a mechanism to do so. In a standard pure form CCDC contract, Rod put up the slide there, there used to be an invoice that went from the contractor to an engineer or a consultant for evaluation. If this wasn't a CCDC contract, or a standard contract, it might go to a property manager for evaluation. That evaluator would typically add about 10 days to evaluate the appropriateness of that invoice and then certify if for payment. After that certification goes out the owner has 20 days to pay. That's how it was supposed to work on paper. But we all know that condo work is a little different. So I have another slide there, Rod.
Rod: Yup.
Justin: This is part of a bigger point here but to say that condo work is a little different says that the contractor would send the invoice to the engineer or consultant. It would be evaluated within 10 days. Then that evaluation certificate of payment would go over to the property manager. The property manager, although they have to pay that bill within 20 days, it might not get to the board for a month. The board might be snowbirds. They might not do meetings for 4 months. It might take a long time to have that cheque. The board might look to re-evaluate whether this invoice should be paid or not regardless of what their consultant said. So, we typically see 20, 60, 90 payment on construction projects. That delay is what the changes to legislation were designed to do. There's one more slide here, Rod. So this is how the Act changed. The Act now says, and this applies to every construction project started after October of last year, whenever a proper invoice is sent to an owner there is a 28 day clock that starts from the day that proper invoice is sent. If the owner does not advise the contractor that they dispute that invoice within 14 days, the owner has to pay that invoice. Non-disputed. If the invoice is not paid at 28 days a process starts called adjudication, which is a new, something like the CAT, it's a regulatory authority that's been put aside to help deal with these disputes, then within 7 days of that 28 day milestone, force everybody into a pseudo-legal process to sort out where payment is. This affects all construction projects. If you can't pay the bill within 28 days the owner has to notify the contractor within 14. Why would you notify the contractor that you're not paying it? If you disagree with the value of the invoice, and the contractor's not willing to change it, that's a reason to notify that not to pay. If there's a setback off a previous invoice that was over-certified, that may be a reason not to pay. If you have a bunch of board members and self-isolation or quarantine, and nobody's going to be able to sign the cheque, you should let them know that you can't pay it. So how do you do this? There's a form 1.1 that's available on ontarioconstructionforms.ca that is an official form that needs to be put out. It needs to say how much you are paying and why. You need to file this with the contractor by the 14th day. Simply put, if you don't pay your bill on time, and/or you don't dispute it, the contractor can now bring everybody to a pseudo tribunal called adjudication. Adjudication is a body of independent adjudicators that are set to evaluate the value of changes, the extras on invoices and the cost associated with them. These decisions are designed to happen fast and act like court orders. So they'll have a lot of meat behind them. I went to some mock adjudications. I've seen what this is going to look like. It looks like a big red herring nest that you don't want to be part of. It's best to be on top of it and make sure your paperworks are done early on. There's obviously some issues associated with this. There is no room if you have a project that has a consultant in here for consultant review. The second the proper invoice lands on the owner's desk, whether it was sent to the consultant or not, that 28 day clock starts. You also cannot put in a contract that an invoice has to be certified by a consultant or an engineer or a property manager. Those terms are null and void. Cheques are going to have to be issued fast. If boards aren't meeting and not signing cheques they'll put themselves at risk of not being in compliance with the new Act.
Rod: Okay. I got two questions for you before I let you go. One question is, and you got to answer in rapid succession here, can we make a payment with prejudice? I'm going to give you the money, we'll sort it out later as to whether or not the quality of the work and whether or not it meets the requirements and so on.
Justin: Absolutely. Let's say you don't want to pay it but you went to 15 days and you forgot to put the notice in. Pay the invoice. These things can always be set-off on the following invoice. There's nothing to suggest that isn't available. You can dispute the next invoice and uses that invoice to set-off that previous payment.
Rod: Sure. Other question, what does this process apply to? Who does it apply to? Like all contractors? Or are we talking about construction kind of contractors? How does that work?
Justin: It applies to all construction projects in the same way that the lien provisions and statutory holdbacks applies to all construction.
Rod: So not to the landscapist, but really we're talking about construction work. Okay.
Justin: That's right.
Rod: Okay. You pretty much stayed within your time, Justin, but you used it all on this topic so unfortunately you'll have to come back next week for the constructing projects while social distancing. That's going to be next week. Thanks so much, Justin. We're going to now go and change topics. We're going to go into the financial mystery portion of the presentation today of the webinar. Brian Antman is going to deal with most of the financial elements. But somebody I forgot to introduce at the very beginning, and I apologize for that, is we have online with us Rob Detta Colli. He is an energy consultant. I was going to call him an energy expert but he says, "Let's go for consultant first." I guess an expert's more expensive. I don't know. So he's with Crossbridge. Rob, I'm going to turn to you in a minute. But to you now, Brian, what does the future look like. What's new ways of doing business? Something that came to mind to me was how do we deal with maybe electronic payments? Maybe that's the way of the future to preserve social distancing and so on. What can you tell us about that?
Brian: I've had a lot of discussions over the last 8 weeks about what the landscapes going to look like coming out of this. I think the work environment is going to be much different moving forward. Up until now management companies have had pretty much manual systems, typical system where invoices come in through the mail. They're processed. Cheques are written manually. They're sent out to the sites for signature. Brought back and put back in the mail for delivery to the different vendors. I think we're going to see an increase, at least I'm hoping, in some of the online payment systems and processing systems that are out there. I've even heard companies are not accepting cheques right now for condo fees; that they're only accepting preauthorized payments. Again, some vendors aren't accepting cheques for payment of their invoices. The landscape I think is going to be much different going forward.
Rod: Stop saying landscape, Brian. Stop.
Brian: Okay. Sorry.
Rod: <laughter>
Brian: The environment. There you go. So one of the things you have to remember though is that these new processes that are out there still have to maintain proper internal controls. Any property management company that is working in the condo environment today, most of them have a very strong system of internal controls. Without any sort of particular order I've just made a list of some of things that you should see, in the current environment, that should be carried forward moving forward. So, one of them is segregation of duties where certain duties are segregated from different individuals in a property management company. That might be where the property manager issues a PO, invoices are processed by a different person and payments are also processed by a different person. The whole idea is that there's no collusion amongst any of those individuals. We all know that one of the good controls is to ensure that directors have the ability to at least sign cheques. Typically what happens is one director signs a cheque and the property manager might be the other signatory on payment. The lien process has to be maintained so that all accounts receivable are collected. Financial statements should be produced monthly, reviewed and approved by the board of directors. Best practice suggests that cash should not be accepted for any payments, at any level, within a condo. Lastly, the accounts payable function, and the accounts receivable function, should be segregated also to ensure that there's no collusion. Like I said, the current process, at least in my mind, is very labour intensive. It's time consuming and consumes a lot of space within any office for invoices, both paid and unpaid, and all of the paperwork that we do have. There are companies out there that do offer automated services. They do have systems that all the internal controls are maintained. The approval processes are just automated so basically what happens is a vendor, like myself, performs a service, I would email my invoice in to the management company. That would get recorded and processed accurately, recorded into a standard account. Payments would be authorized. There may be electronic signatures. There may be manual cheques still. In my office what we're doing is we used to issue all cheques manually. What we're doing now is we've set a up a preauthorized payment process where one of the partners has to approve a payment before the payment is actually made.
Rod: Okay. Sorry.
Brian: One of the other things that is really a consideration is, what's the cost of these services? In looking at them, there's two sides of the coin, really. They're not cheap. That's probably why some of the management companies have been reluctant into implement them. But I think with the COVID-19 environment there's hopefully going to be a big push to implement these services. In my mind, they do save a lot of time, although the implementation phase can be quite time consuming. The cost is typically based on a flat fee or perhaps on the number of transactions by each corporation. The savings, well, you're going to save a lot of paper that you're not going through storage costs, courier costs, things like that. You can use this system either conventionally, as it's built, with electronic signatures. I have seen some companies who are using it still maintain manual cheques. That would be a little bit more time consuming and costly because of the issuance of manual cheques. That's really where I see the process going in the future. I think one of things we wanted to just speak about, related to the new environment is, electronic payments. I think Denise was going to just speak to some of the things that she's seeing in the current environment right now.
Denise: Yeah. I do. I just wanted to mention that we're seeing a lot of activity on our lien collections. Normally we'd get owners coming in with post-dated cheques or money orders or bank drafts, certified cheques, but now it's all electronic transfers. Which is a good thing because we're getting paid quickly and condominium corporations are getting their money right away. So a lot more electronic transfers.
Rod: Okay. Anything else, Brian, before I turn to our energy consultant?
Brian: I just wanted to mention a couple of things about going forward and budgets. I know we were going to try to get to this last week but we ran out of time so I thought I'd just spend a couple minutes on talking about, perhaps, you know we've been talking about all of these issues related to COVID-19 and it's my belief that going forward, protocols and procedures are going to be in place for a long time. With the way businesses are operating is going to be very different than we've seen in the past. I think owners, property managers and directors have to be prepared for this. In most cases there may be higher operating costs for condos and also I think that cashflows are going to be significantly affected. Why do I say that? First of all directors have the obligation, as well know, to maintain the assets and common elements of the corporation. But there will be, going forward, stricter government controls and regulations. We have to maintain proper health and safety measures. All of these things may come with a higher cost. Things like cleaning, security, social distancing, has to be implemented. For example, we see some of the condos now, they've installed screens in the security desks and other measures to ensure that the security staff is kept safe. There may be more stringent rules like we talked about with respect to amenities and social distancing. With more people around condos there may be more repairs and maintenance because people are in the buildings longer. Another factor is, really, cashflow. The reason I say that is because although we all know there is a lien process in place, you may see the cash receipts are affected, and it may take a long period of time for the corporations to collect those receivables, but they still have to operate. So there may be some cash flow implications related to the operations in condos. I think people just have to look at different areas within their budgets, understand that the costs have to be paid and everybody's in the same environment and we're all working to ensure health and safety.
Rod: Okay. Let me jump in. That's a perfect segue to loop Rob in actually. Speaking of some savings and some additional costs, I'll turn to you now, Rob. I'll unmute you. I think I've heard that very recently Ontario has extended the time of use hydro rates and, quite frankly, I've never really fully understood any of these different pricing regimes. Maybe you can walk us through this and what is this extension we're talking about? What does that mean?
Rob: Sure. Yeah, I guess I'd love to join this esteemed group because I sometimes feel more like a lawyer looking at some of these things than an energy manager sometimes. There's three main ways that condominiums are charged for electricity. We're just talking about electricity right now. The first one being time of use. That's what most single family homes, I'll say all single family homes are charged, that's kind of the typical. On peak there's a rate to that. Mid-peak there's a different rate and then on peak, there's a certain rate to that. That's how much single family homes are charged and I'd say about half of the condo corporations in Ontario are charged that way. There's two ... One other one called hourly which has an hourly piece to it and something called global adjustment. That's probably another 40%.
Rod: Is that sort of when we talk about condo corps being on a commercial sort of rating kind of thing?
Rob: Exactly, yeah. That's were you get all the acronyms thrown around. HAP which is an hourly price and global adjustment is the big one, referred to as GA.
Rod: There's a third method of pricing.
Rob: Yeah, there's a third one called the regulated price plan. You could call that the old method, before time of use came to condominiums. That's where you had two tiers. You got a certain amount of electricity you could use per suite at a cheaper rate. When you went above that then it got a little more expensive.
Rod: Sure. So, how does that play into this extension? What has been extended and until when?
Rob: Yeah. I've got, I guess I'm bearer of some good news, because this does help with some of the cashflow. This was first announced at the end of March. It's already been in place for 45 days. It's been extended to the end of May, May 31st. What happened in March 24th was that it said if you're being charged on time of use, so this doesn't fit with all condominiums, if you are charged time of use then you are being charged for the lowest or the off-peak rate. So that was 10.1 cents. What that means then, for a condominium is, that you're getting charged that 10.1 regardless of when you're using your electricity. It fits nicely just because there's more people home during the day.
Rod: Right. Right. Okay, anything else before I switch gears?
Rob: There's two more things I'd say that kind of caught up. The condos that weren't billed on time of use always felt that they missed out. There was two things recently announced that are essentially, I'd say, kind of catching up to the discount that the time of use condos have already had.
Rod: Okay. perfect. Thanks so much. Switching gears. Thanks for coming, Rob. At the last minute you came to bat. Thank you so much. We're going to now switch topics and we are going to turn the microphone to Denise. So, Denise, earlier on today Graeme spoke about the orders in council and the various extensions and this and that. How does that sort of tie into many corporations attempting to schedule some of there AGM's and is there some concerns with respect to that?
Denise: Well, yeah. I'm not going to get into how orders from council work because it appears that all of us couldn't figure it out. We don't know when this emergency period will end. What we do know, you can postpone your AGM's. However, there are corporations that still want to hold their AGM's and they want to do it virtually, because now you can do it virtually, and you can use electronic voting. But there is a risk and the risk is what happens if you call your meeting now and all of sudden the emergency order ends? Do we think it's going to happen? Yes, maybe, I don't know. Could happen 2 weeks from now. So you've called your meeting and then what happens? Well, according to the order of council, you cannot hold your virtual meeting outside of that emergency period. So now you've got a meeting that you've called, and you can't hold a virtual meeting because you don't have a virtual meeting bylaw and you're not in the emergency period, nor can you do electronic voting. So we talk about converting your meeting. So what you may have to do is convert your meeting to an in person meeting. But you've already sent out your notice with your virtual meeting, and you've already started your electronic voting. It may be different for those corporations that have an electronic voting bylaw, they may be in a better shape, because they can still use all the electronic votes that started during the emergency, but they can't continue with the virtual meeting. For those that don't have an electronic voting bylaw, you're going to have to call in your person meeting, you're going to start collecting proxies again. So we're back to proxies or in person ballots. Again, I have to stress the importance of if you don't need to call your AGM then maybe you shouldn't. But if you are going to call it just keep in mind you're going to need legal advice, because of the emergency period, and you're going to need to figure out how to transition to the in person meeting. Of course, it would be ideal if everyone had the virtual meeting and electronic voting bylaw, but we don't have that. Most corporations don't have that at all. Some have the electronic voting bylaw, only, but that doesn't give you the ability to do a virtual meeting. Even after, if we get past this and we go into the period in which the emergency period ends and you're in that transition, you could still have a virtual information meeting. So you'll go ahead and you'll have the virtual platform but you can't do motions on it, you can't do voting, you don't count those who've registered for the virtual meeting as being present, because you don't have a virtual meeting platform.
Rod: So I think what I takeaway from this is this, is the only way you'll be able, as of now, you'll be able to continue hold e-meetings and to continue have e-voting as if you pass a bylaw. Now may be the time to pass that bylaw simply because there's a bit of limited runway under the order in council and we're not sure how the transition will flow after. Adopting a bylaw now may allow you to continue to be able to hold your meetings electronically, and so on, and the second thing that I takeaway from this is that the issue we have is that orders in council seem to be extended always by 14 days. The issue is that when we call a meeting we have to give 35 days notice. So we're sort of throwing the ball out of sight and we're not sure what the playing field will look like when we get there. Anything else, Denise, before I move on?
Denise: Well, I see questions coming in. There's so many questions on meetings, like requisition meetings. Yes, you have to hold your requisition meeting. If you've lost one of the board, yes, you have to call your meeting. We're dealing, just now, with the AGM's which you can postpone according to the order.
Rod: That's very good point. The only meeting that can be postponed now are AGM's. In fact, AGM's that were scheduled to take place during this emergency period. If your AGM was already late on March 17th, you're not covered by the order in council. If it's a requisition meeting, a turn-over meeting, loss of quorum meeting, those have to proceed, as was explained last week by Graeme. Okay, switching topics. Let's talk about enforcing rules and I think Josh, you're the one dealing with this. What I have in mind is the very difficult balancing act between enforcing and being more flexible. How do we manage that? We've been telling people, until recently, to crack the whip but do understand that we're in a very specific situation right now, but we do have a obligation to enforce our rules. How do we negotiate this?
Josh: Yeah. Absolutely, Rod. The obligation to enforce is still there. The same obligation is there. The only difference is the circumstances. These have changed during COVID-19. We have lots of people practicing physical distancing, remaining inside their units, so we're bound to have additional nuisance related issues in the condo setting. But I think the question is, during this situation when we're dealing with COVID-19, what is unreasonable or excessive noise? Has that maybe changed a little bit given that everyone's circumstances have changed. People don't have childcare and there's likely a lot more children living at home and people are working remotely. All of these things need to be taken into account in terms of how corporation is enforcing and dealing with all of these issues. I think it's reasonable to expect a greater degree of nuisance right now, and it's probably slightly escalated the sort of tolerance level that neighbours need to expect, before we start taking those enforcement steps. Because we're just dealing with the perfect storm right now with all of these additional people living inside the units and dealing with different challenges. I think what we need to do is sort of pivot a little bit. We still need to be sending warning letters from management. We still need to be sending enforcement letters from legal counsel. But I think we need to have a little bit more of a focus on really trying to talk to the person complaining. Talk to the person making the noise. And, of course, document everything. Follow things up in writing. But let's place a little more emphasis on that first sort of mediated step of actually trying to talk to someone and trying to get somewhere without having to escalate matters. Especially to legal counsel. Nobody wants to receive a letter from a lawyer, especially right now. It's about trying to get that balance. Of course, if talking to someone isn't getting anywhere then, absolutely, escalate those steps. We have to do it. That statutory obligation for a condo corp to enforce is still there. But let's just take into account the sort of shifted circumstances that we're dealing with right now.
Rod: Okay. Very good. Thank you so much. In about 30 seconds, my two managers extraordinaire, what is the crisis this week?
Sandy: Well, nuisance and noise and complaints really is a big one. Josh touched on most of it. It really boils down to everyone has different needs right now during the pandemic. People are dealing with their children, working from home, like he said. Everyone just needs to be respectful of their neighbours and everyone's needs and let's try and work together to come up with solutions so that everyone can get through this pandemic.
Rod: Okay. Katherine.
Katherine: It's a meditative approach is really what it boils down. That's what Josh was speaking about. That's what Sandy is talking about. What it is, what has always been one of the challenges in enforcing rules and doing what is reasonable in condo land, is that your house in the field of the middle of nowhere happens to be on top of, beside or underneath someone else's home as their castle. What I say when I mean that is that we're often not understanding of what the other person's needs are. That's where we come into conflict. The sooner we can have people understand what those competing needs are, those competing values are, the sooner we can come to, most often, an agreement that will work for both parties. What Josh and Sandy have touched upon is the fact that more people than ever are struggling with mental health issues. CAMH has reported that there has been a 750% increase in calls, texts and other means of reaching out for support. Folks are not getting out and people are living in closer quarters. Trying to find ways where both people can be satisfied, and sacrifice a little, will get us the furthest as we try to all live together, safe at home.
Rod: Okay. Very good. Thank you very much. So we're out of time. I'm going to do like I do every week. I'm going to go around the table. I'm going to thank our speakers for having shared their evening with us. You only have 15 seconds each to say goodbye cause we're out of time. Brian Antman, from Adams & Miles LLP, thank you so very much for your insight. Any parting words? Well, you're all muted. Yeah. That's a problem.
Brian: That is a problem. Thank you very much everyone. I've nothing really to say. Look forward to next week.
Rod: Wonderful. So we're having a next week, folks. You hear it here first. Turning to you Sandy Foulds, from Wilson Blanchard Management. Thank you so much. Words of wisdom before we go?
Sandy: Be kind, put yourself in your neighbour's shoes. Everyone's got different struggles right now. Stay safe.
Rod: Thank you so much. Katherine Gow, a Mary Poppins saying before we go?
Katherine: Well, my typical one is keep calm, wash your hands and sanitize your cell phone. But the other theme, especially tonight, has to do with communication. The way forward is uncertain but if we talk to each other about what the challenges are, in terms of opening up all of the amenities which everybody would like, people won't like it but they will understand it. They will also understand when we are able to open them, and I also want to remind folks, it has been communicated before, having to go backwards as opposed to continuing forward with some of the restrictions, but in a positive way, they'll be well received. So be more conservative rather than more open, at least in the shorter term, it'll keep us all healthier and I think it will be better understood by your whole community.
Rod: Okay. That was the longest 15 seconds I've heard, Mary. Denise, Denise Lash from Lash Condo Law, also speaking on behalf of the Community Association Institute of Canada.
Denise: Yes. I was going to just say embrace technology. It's the new way.
Rod: Wonderful. Moving on now to Graeme MacPherson, Gowling WLG.
Graeme: Yes. Thank you everybody for tuning in tonight. Keep doing exactly what you're doing. That is staying informed. Staying safe and staying 6 feet away.
Rod: Very good. You sound like you're 6 feet away, at least, right now.
Katherine: Lean in.
Graeme: I'm just practicing safe distancing. We don't know if it travels through the mic. I am just joking.
Rod: David Plotkin, from Gowling WLG.
David: Thank you. Check in on your neighbours. Check in on your loved ones. It's been a long journey for all of us and physical distancing does not necessarily mean social distancing. They've replaced that word for a reason.
Rod: Yes. Absolutely. Josh Milgrom, from Lash Condo Law. Parting words?
Josh: Thanks, Rod. Thanks everyone. One more point on nuisance issues. We actually need to investigate nuisances so don't just take someone's word for it that there's actually a noise complaint or an odor issue or something like that. Make sure you're investigating, obviously in a physically distant type of way, but don't start sending off legal letters without having actually investigated something.
Rod: Very good. Thank you so much. Jason Reid, from National Life Safety Group. People are asking you to return next week to talk about the fire safety again and how that interplays with social distancing. So you've got a gig next week there, buddy. Parting words of wisdom?
Jason: Yeah, absolutely. I'm always a big proponent on documentation and as discussed before, the fire code, and now the Occupational Health and Safety Act requires the building owner or the corporation, to prove due diligence. Documentation is key.
Rod: Okay. Thanks so much for being with us. Justin Tudor, from Keller Engineering. Words of wisdom before we go? Oh, there it is.
Justin: The world's on fire.
Rod: Special thanks to Rob Detta Colli, for your presentation tonight. Thank you so much. It's very appreciated. Thanks.
Rob: You're welcome. I'm going to have, I think it's a publicly viewable summary, on the three pricing regimes and just what is in place during this COVID stuff.
Rod: And you're going to post that where?
Rob: On the Crossbridge blog. I think it's publicly viewable.
Rod: I think so too. If not it's going to be now. Thank you so very much.
Okay, well everybody, that's it for us. Thanks for tuning in. I know that you're time is precious so we don't take that for granted. Again, we're preparing for next week. We need topics. We need suggestions so send your questions, send your topics. So next week, on Wednesday, May13th, 5:00, same channel, same time, same people. The information will be posted on condoadvisor.ca. You'll need to register again so we know who shows up and to register you need to visit condoadvisor. Then there's a tab, webinar tab, you click on that. For the next few days it's going to be a very skeletal kind of agenda because I haven't prepared it yet. But this is your time, your chance to give us topics, suggestions, questions you have and that's how you register for the AGM next. Not the AGM. Did I just say that? For the webinar.
Graeme: That was a Freudian slip.
Rod: This is where you will get to see our webinar next week. Thank you again, everybody, all the speakers and people at home. Stay safe, be good with one another and see you next week. Take care. Good night.