CondoVirus Episode 15 | Opening Toronto and insurance challenges in Condos

CONDOVIRUS EPISODE 15

Rod: Hi everybody. My name is Rod Escayola and I'm your condominium lawyer with Gowling WLG. Welcome to episode 15 of our series. Folks, tonight is the last episode of the season. We've decided that. Wait until you see the cliffhanger we have for you. Believe it or not Toronto is about to re-open. In fact, it's re-opened today. So that's going to keep you on the edge of your seat for the summer. Let's see how well they fair. Hopefully well, actually. In today's episode we're going to give you an update about re-opening Ontario with a bit of a focus on Toronto. We're going to recap on the COVID protocols. If you're going to re-open your amenities we're going to sort of clarify some misunderstanding that, I think it's wishful thinking, people may have heard something different than what we actually said with respect to that, but we'll reiterate it. Then we'll focus on condominium insurance and we have a special guest tonight to help us with this. As time permits, we'll also take some questions from the floor, if time permits. Now, tonight being the last episode you will recognize most of our usual cast of characters and this being the season finale I thought that I would pick game shows as tonight's theme to introduce them. Let's see how that goes. From Apollo Property Management, half mediator/half enforcer, knowing how to keep the feud out of the families we have Sean Cornish. Hi, Sean.

Sean: Hey, Rod. How are you doing?

Rod: Good, good.

Sean: I got nothing after that.

Rod: From Crossbridge, speaking on behalf of ACMO, trying to balance corporation's interest and owner's desires, we have Katherine 'Let's Make a Deal' Gow. Hi, Katherine.

Katherine: Good evening everyone.

Rod: Knowing when to buy vowels and when to solve the puzzle, from Lash Condo Law, spinning the Wheel of Fortune, we have Denise Lash. Hi, Denise.

Denise: Hey, Rod. Hello everyone.

Rod: Our two condo twins. We'll actually we're missing one of the twins. He's going to join us later. He's on the line right now with a local judge here. He's not in trouble. Don't worry about it. But so I guess I'm going to skip Graeme for now. Next in line then I guess, from Gowling WLG, knowing when to bid $1.00, come on down David Plotkin. Hi, David.

David:    Hi everyone.

Rod: Finally from the National Life Safety Group, keeping everyone safe with an eye out for the weakest link, we have Jason Reid. Hi, Jason.

Jason:   Good evening everybody. Hi, Rod.

Rod: Hi. I'm glad you could join us. We were having technical problems but thanks for joining us. So, we have the chat channel. It is going. It's live and well. Keep chatting. We have good people out there. I see some of the usual's. That's great. If you want your question to be specifically ignored make sure you put it in the question and answers. No, no. If you want your question to come to our attention and you want it to be sort of above the fray of the chat channel put it in the Q&A but we're going to try to see if we can manage both channels. As usual we're going to start with our disclaimer. I know it's your favourite part. Keep in mind that, especially for our good friend from Winnipeg, keep in mind that when we refer to legislation tonight we usually refer to Ontario legislation because that's our comfort zone, I guess, that's where we're from. Most of us. The information provided to you tonight is to the best of our ability, accurate, but only as of the date of the broadcast. So today is June 24, St. Jean Baptiste, from my friends in la belle province. As the situation changes usually daily, usually before long weekends we get announcements, keep that in mind if you are watching this in a rebroadcast. Also very important to keep in mind that the information we provide today is of general nature and may not necessarily apply to your specific situation. It's important that you seek advice from your professionals, engineers, lawyers, property managers, security advisors, insurance broker. So go get the information that really applies to your situation. Finally, I have to say that this session is being recorded. It's going to be posted later on, on Condo Advisor. That's condoadvisor.ca if you want to see our past webinars, or this webinar later on. All you need to do is you go to the website. There's a tab at the top corner that says webinar. Click on that and you'll be able to be redirected to whichever episode you want to see, to your heart's desire. What else do I have here? I think we got it all. Very good. Let's move on. This is who's on the line and eventually our good second twin will join us. These are the topics. David, in the absence of your condo twin, can you maybe update us, give us the Provincial update?

David:    For sure. So now, welcome to Stage 2, Toronto, Peel region. I know you've been waiting a very long time to join the rest of us. Congratulations, you are now in Stage 2. I'm sure this will be discussed in great detail throughout our webinar today by management and by lawyers. That does not mean that everything is now open and you can do all the things. It means that you are now able to follow specific outside lines that are being putting out for different businesses to go back to work. Certain businesses are being re-opened and all physical distancing protocols are still in effect for businesses that are opening. We will get in much more detail about that but, no, this is not the government telling everyone that we're back to normal. It's Stage 2 which is not the end of the road. The Windsor-Essex region remains closed. Sorry, not closed entirely, but in Stage 1. I think there's bits and pieces of the region that are opening Stage 2 but just double check with your own local public health authorities on that. From a timing perspective the declaration of emergency was now again extended, today, until July 15^th. So remember all those counts that Graeme has been doing for us on a weekly update. You are now counting from the July 15^th, end of the declaration of emergency. Again, that may or may not be renewed again.

Rod: Okay. So let's see, oh, this one was for later. Let me go here. I'll keep that for in a second here. Speaking of those deadlines and Denise you may need to jump into help me. So what we know now is that the emergency period has been extended until July 15^th, I think David just said. So this means that anyone who would have had their AGM scheduled to be held up to July 15^th, you could either call it now electronically, or if you really wanted you could postpone it and hold it in person within the 90 days following the period of emergency. So that would brings us, I think Denise, to November 12^th. If we look at this, this is the 30 day that's a bit more confusing, but if your AGM was scheduled to fall within July 12^th to August 14^th, the 30 days following the end of the emergency period, rather than have 90 days to call and hold your AGM you have 120 days. Right? So that brings us to November 12^th.

Denise: Now it doesn't have to be in person. Remember? It can be virtually.

Rod: Right. So that I think this is actually, and you hit it on the head, that's the actual lesson is that regardless, you can call and hold your AGM virtually. Whether you have a bylaw right now or not, and that period to do that, that period of exception, is 120 days. Whether you have a bylaw allowing it or not, you can call and hold a virtual AGM and vote electronically all the way up to November 12^th. Right?

Denise: Right. And also other meetings as well. So, requisition meetings, any other meetings that you have can be held virtually without a bylaw up until November 12^th.

Rod: That's right. That's right. These other meetings that you've just identified, Denise, those can't be postponed. Those have to be called within the timeline.

Denise: That's right.

Rod: The one postponement is for the AGM. Okay, so I think we've got it. Let me know go back. I know that Toronto is joining us in Phase 2. So that led Ottawa Public Health to issue a very important warning. So I'm going to bring it here. They're really encouraging everybody to wear their mask and, while they recognize that it's not very fashionable or comfortable, it really is a lot better than wearing a Leaf jersey I guess. And look who loves that sense of humour. Katherine Gow. Look at that.

Katherine: I did. I'm trying to incite a challenge between Torontonians and Ottawaians, I don't know even know how you say that properly, because it's not going to be comfortable when it's 40° outside to wear our personal protective equipment, our masks in particular. But we fought really hard to make progress going forward to enter into Phase 2 and I don't want it to be lost. I am thinking of the experiences we've had, very notoriously, in Trinity Bellwoods Park, and recently at the beaches in Toronto. Anything that we can do to encourage folks to do the right and responsible thing, all the better, and a lot of times in condo land it's us modelling great behaviour. I'm so pleased to see through the chats that folks have certainly got the message, at least all of you whose been attending these regular webinars, just because you can doesn't mean you should. And slower is better. So we're going to definitely be reinforcing that perspective here tonight, again.

Rod: I'm not sure how you manage to say within 144 characters on Twitter, Katherine.

Katherine: I did have to edit it 13 times. So, there's that.

Rod: Okay, folks. Let's recap the re-opening of the Province. As Katherine said yesterday during our dry run in practice, it's very hard to keep the brakes on, and we're all under increasing pressure to open all the amenities. But owners, and directors, must understand that the corporation continues to be responsible to control and manage and administer the common elements. And the corporation, that's all of the owners collectively, continue to be the occupiers of common elements. So if something goes wrong, if there's going to be a claim, if somebody's going to complain that the corporation re-opened without precautions or re-opened prematurely, it's the corporation that's on the hook for that. People quickly forget that while they really want to open their amenities, they forget that the Province continues to have very serious restrictions on what business can and can't do. Businesses out there are putting in place all sorts of protocols and physical safeguards and all sorts of precautions. We sort of have to keep that in mind when we're being asked, "When are you going to re-open the patio? When are you going to re-open the barbeque? When are you going to re-open the rooftop terrace?" We're going to post this. The City of Toronto has issued a 7 pager of precautions if you're going to re-open your Class B pool. We'll post that on Condo Advisor but all these precautions really apply, in my view, to any amenity that you plan on re-opening. So I guess, I'm going to first go to you, Jason, and then I'll turn to the two managers. What's the lay of the land? People ask us all the time when can we re-open the amenities? So, Jason, when can we re-open the amenities? What's your sort of take on that? Oh, you're muted, Jason.

Jason:   Thank you. So here's my take. Listen, we've constantly said they should not be open as of yet, and I'm a firm believer in that to this day. My suggestion would be is, that once it's permissible within your community or your area of jurisdiction, once it's permissible my suggestion is to wait 14 to 21 days. And why? 14 days is that latency period and then an additional 7 days, which works out to be 21, I feel a prudent condominium corporation that manages 3 or 4 smaller amenities typically, can learn the lessons of the larger facilities that are starting to open those now. They're really making their own rules. They're coming up with their own best practices. Yes, lots of municipalities have lots of guidelines but those guidelines are different in every municipality. They've got the same gist, but as a condo corporation, by suggestion would be to wait 21 days after so that you can see a real verification and understanding of those risks, and the impacts after 21 days.

Rod: Right. Right, right. Absolutely. On the management ground let me start maybe with Ottawa. Has anything changed and what's being re-opened, Sean? What's not being re-opened? What's the pulse out there?

Sean: It's, as you said, we're a little bit ahead of Toronto on the re-opening and that includes the pressure to get things open. With the weather we've seen a lot of interest in opening patios, rooftop terraces and barbeques. So far our recommendation remains open space outdoors, we're pretty comfortable with re-opening, with the proper guidelines, signage, restrictions and capacities. The pools, we have good guidelines from Ottawa Public Health on how to open and what you're required to do to open a pool, including submitting to Ottawa Health for permission 2 weeks ahead of time. The barbeques are a tougher one because our recommendation has remained. Removing any shared items. Any furniture, any barbeques, any utensils, anything like that. Really the barbeques are still off limits, as far as our recommendations go, but we definitely see the pressure on the boards. Inevitably in some cases they are giving into that pressure. All we're doing at this point where that's the case is really tightening up on making sure that cleaning protocols are there, making sure any users are fully aware of the restrictions and proper procedures for maintaining distance, limiting numbers and using their own chairs, using their own utensils if they're keeping the barbeques open. But it is a challenge because nobody has the staff to do proper cleaning and disinfecting so it's tough to have anything that's actually shared there other than outdoor space.

Rod: Right. In fact, what you've just described is very much in line with the actual guidance and restrictions we get from the Province, which basically says that outside amenities are the ones that you may want to consider opening. Inside amenities, other than the pool oddly enough, inside amenities at this stage they shouldn't be opened, and they're not being opened. The YMCA is not opening and GoodLife is not opening and so I think that's the guidance we get. Somebody from the chat line, before I go to you Katherine, somebody from the chat line called me back to order and made me realize that I forgot to introduce our special guest. Tricia Size, from Gallagher, and so with a catchy tune she knows when to take insurance at 200, never in jeopardy, who is Tricia Size? Hello, Tricia. Thanks for being with us.

Tricia:    Hi. Thanks for having me.

David:    Sorry. Maybe just on this point before you jump on, I see some questions in the chat also about, and this is something we've been getting many questions about, restaurants are re-opening, pools are re-opening, why are condos different? Why can't we do what all of these facilities are doing? So, maybe one of the managers wants to jump in and I could also give a quick legal on that as well.

Katherine: I think the shortest answer, the shortest distance there, is what's motivating a really rapid return to business by places like restaurants is the very fact that they're losing money. They're motivated by a restart of the economy. So that's a really important factor. A really important function. One of the things that is completely different in condo land is our access and our ability to staff the requirements in maintaining the physical distancing, the enforcement and the sanitation. I think it's now been several weeks ago that we talked about, primarily, the issue or concern being, one, whether or not we believe sanitation is necessary. Resoundingly, very clearly, it is the expectation. Second expectation, Toronto Public Health in particular and when it comes to things like pools, they're expecting a third party to be sanitizing. That is what their guidance says. That is what they're recommendation is. The third part of it is our business isn't operating a patio, strictly speaking. Our business is operating a condominium safely and opening the amenity spaces doesn't, strictly speaking, facilitate that right now. I wish it did for a whole host of reasons. But that's my feeling in a nutshell.

Rod: David?

David:    Yeah. Just from the legal standpoint on that, also you have to remember that the condo is considered the corporation to be the occupier of the common elements, and the condo is liable and responsible for the cleaning regimes and the decision making about what's open, what's closed and what are we following? We'll address it later. We've already addressed it about waivers and do it at your own risk. We don't advise that because at the end of the day the condo corporation is the occupier of the common elements and responsible for the health and safety therein. As Katherine said, condos are not in the business of running pools or the business of running restaurants, they may have these things on the premises as common elements that fall under the framework of the Condo Act anyway.

Rod: Right. I'll tell you what's my main guidance so far. There's a piece of legislation in Ontario called the Emergency Management and Civil Protections Act. It's under that piece of legislation that the Province closes things and opens up things and puts restrictions. Under this piece of legislation there's very important Regulation. For instance, the Regulation that tells you what's the length of the period of emergency and so on. It also lists what are the businesses that are essential and what business ought to remain closed. In my mind, if a gym ought to remain closed at the public level, I can't come up with any sensible reason to open it at the condo level. If it's going to be closed across the street at GoodLife or at YMCA, where they have the staff and the means and the finances to properly disinfect and clean and control people, if it's going to be closed across the street there simply isn't any good reason for us to open it on our side of the street. That's how I see it. When pools were re-opened at the Provincial level, well then of course, that makes sense. So now when we know the Province allows pools to be re-opened, now we need to ask ourselves, should be re-open? Right? Remember you can always be more restrictive but not more permissive. That approach of a condo corp being more restrictive, not more permissive, is the one that should guide you. As long as there's some restrictions out there you should probably emulate them. You should probably keep those in mind. Denise, I don't know if there's anything you want to add to that.

Denise: No. I completely agree with you, Rod, and we're recommending to our clients not to open the amenities, the pools, and keeping those open is a real concern. How are condominium corporations going to be able to open them safely? That's a real issue. Even though the public pools may be allowed to be open, we're still taking the position that it's too early.

Rod: Right, right. Tricia, I'll turn to you. From the insurance perspective, I guess, maybe things to keep in mind. What kind of exposure to the corporation or precautions in the COVID world that come to mind?

Tricia:    I'll just reiterate what's been said in that we look to the municipality, we look to the Ministry of Health, we look to all of those governing bodies that help us decide what is and what isn't safe. As long as you, as property managers, as directors, are doing your due diligence and acting honest in good faith on behalf of your corporation then that's the best you can do. I would always recommend though that you consult a professional if you are concerned. You call your broker or you speak to your legal counsel if there are ever any gray areas and that will certainly help you should there be a lawsuit following a perceived law.

Rod: Right. Right, right, right. Yesterday during our prep talk you were talking about some of the precautions that you thought would be useful. You were mentioning posting signs. But you were also mentioning that not being more open or more adventurous than the Province. So really following the public health guidance and not venturing outside of that. That has to do with how to avoid a claim, I guess, or how to minimize having to payout for the claim, right?

Tricia:    You got it.

Rod: I took notes.

Tricia:    <laughter>  Good listener.

Rod: I took notes. I'm going to say this. If I'm retained by someone, and I'm cross-examining a condo corp, and you've re-opened your gym before the Province allowed it to re-open, I would ask you exactly that. What made you think that you could re-open your gym before the YMCA? What possessed you to do that is really the question. Okay. Anyway, we sort of got off track here. Let's see if we can return to what we're talking about. With respect to opening amenities I'm not sure, Katherine, if you want to maybe tackle that. You're the one who sent me this wonderful 7 pages from Toronto. Tell us about that a bit. You're muted.

Katherine: It is terrific, not only because Toronto's the center of the Universe, I know it not to be, but one of the things that I was pleased to see in Toronto's guidance is ...

Rod: Oh. We're losing you.

Katherine: How precise they were being in terms of what they felt was necessary. What I think was most important was how specific they were, in terms of what they viewed to be a requirement for re-opening a pool, and the guidance that was therefore instituted. So it's been very clear in affording good direction to people who are contemplating opening their pools in condo land and I think it's a great piece of documentation upon which boards can rely when they say, "It's not that we don't want to. It's not that we're making up these requirements. It's not that we don't trust that you might even sanitize between yourselves. It's not that we don't believe you won't self-screen. It is that we are following the guidance that is issued by public health and we're taking it very seriously." This document also gives, in my opinion, some really strong indicators as to what is and should be expected on other outdoor areas, in terms of visual cues and being able to, as Sean had mentioned previously, ensure that there aren't additional folks gathering. Even if you don't have your condominium corporation in Toronto, I think taking guidance from a document that is quite specific here and clearly is thinking of condominiums as well as public facilities, I think it offers you a really good backbone for how you put together your plan for re-opening. And, again, every condominium corporation in Ontario is to have their own plan for re-opening. So consider it well and in detail. The other thing, the way it was phrased by one person, was to be cutting edge but not bleeding edge. So they didn't want to suffer the slings and errors of doing it incorrectly. So further to Jason's point, if you were to wait 21 days, not only are you waiting out the period of additional transmissions, the other thing that you're waiting out is learning and finding out some best practices. Right? We can then visit the YMCA and see how they do it and how they can effect appropriately. That might be the best way for us to implement at the condo level as well.

Rod: Right. I do think, and we'll post this directive, I do think that condo corps should have a look at that and should sort of see what they can implement from it, not just for the pools but, I'll give you an example. It's interesting that they're actually recommending that you screen staff and bathers and spectators and that you ensure that they don't have any of the symptoms. In fact, they're recommending that you screen them on the way in and on the way out. Most importantly, I think this is going to bring a smile to Jason's face, may be a tear to his eye, they're expecting, or they're recommending, that you maintain a log of who attended and who was there and have their contact information. Why would that be, Jason?

Jason:   Well, that's so that public health can reach back out to the condo corporation and say, "Somebody's been tested positive." and then they're going to be asking the condo corporation for the documentation of screening processes. Who was in that pool? What day? What time? Who else registered before and after? Because they want to start to make sure that they're doing that contact tracing. It's not as just as simple. Katherine's really pointed out, it's not as simple as just opening up the amenity. You need staffing. You need resources. You need documentation. So as an example, to put an amenity open that will serve 20 to 24 people a day, let's say, your taking on all this additional workload that has in itself additional risk and exposures and opportunities for gaps. So, yeah, it's going to be tough.

Rod: When you do upload our presentation from the condoadvisor.ca website you'll see that I've summarized it here as well. Okay. We're running out of time. Right. I was going to say we need to clarify. We don't need to clarify. We need to repeat what we've said last week about waivers because some people are saying, "Oh, well gee, they talked about a waiver last week. That must mean that there should be a waiver." and in fact, at this stage, what's our recommendation with respect to waivers, Denise?

Denise: Well, you know I'm glad you brought this up, Rod, because I've had people contact me saying, "I heard on Condo Advisor you and Rod are recommending waivers." and I'm like, are they listening to the same webinar? I'm just amazed by this. So I want to make it clear, no waivers. Don't open your amenities if you feel like you need to have a waiver. I just want to explain. Waivers, are they really enforceable? I don't think they are for this kind of thing. We generally see waivers where a unit owner wants to give their keys to somebody and have the concierge hand it over to them, or a personal trainer, those are the circumstances. Items that aren't within the corporation's obligation to do then you get waivers. But something like opening the amenities where it's the duty of the condominium corporations to ensure that they're safe, getting owners to sign waivers is not going to help in terms of any liability, and you tell me if an owner says, "I'm not going to sign the waiver. I'm using the gym anyway." what are you going to do? I think having lawyers prepare waivers for amenities is just going to cause more legal work and I'm going to save you legal fees by telling you not to do the waiver.

Rod: Right. One thing is to seek a waiver from someone when they're undertaking a risky activity, sort of outside of the ordinary business or obligation of the corporation, that's one thing. But just imagine this, a restaurant that would have you sign a waiver when you come in to order a hotdog. It just makes no sense. If you don't trust your hotdogs you shouldn't be in that business. I think the same applies to condo corps. Okay. Let's move on because this was sort of a recap from last week and I'd like to turn to Tricia because we had you come here to tell us about how insurance works in condos. Let me turn the mic to you and give us a bit of, we try to have like sort two themes now, one COVID related, one not so. So, Tricia, help us understand how the insurance scheme works in the condo world.

Tricia:    Okay. Well, I'm giving you a little bit of a picture which pretty much just sets out that you've got what the unit owner is responsible for with respect to insurance. So there's actually two responsibilities here. You need a unit policy and you need a corporation policy. The unit owner pays into both of these. One being to support it's own unit and the other being selective for the corporation in general. I just put out here what the condo's responsible for, at the bottom, the common elements, liability, boiler and machinery also known as equipment breakdown, D&O coverage and then cyber, whether or not that's pertinent to your condo or not. Then the unit policy will be for any betterments or improvements above the standard unit, contents, if it's not fixed to the wall then it's considered a content. Additional living expenses, you want to make sure that you have a place to stay outside of your unit should there be a loss and you need to vacate, for whatever amount of time. Condo definitely will not cover that. That's not part of the condo policy. Deductible, depending on what deductibles are with respect to property damage, water damage. You want to make sure that if that is ultimately your unit's responsibility that you've got coverage for it under your unit owner policy. Then personal liability. That comes with any policy, a personal liability line on there as well.

Rod: So the first stop, 5 boxes, is really what would fall under a unit owner's personal insurance and the bottom 5, I think, is what the corporation has to have. There's a reason why we're talking about that because that's going to bring us to, Denise, is going to talk about the insurance deductible bylaws. I'm going to talk about standard unit bylaws and let's see. Next slide for you, Tricia.

Tricia:    Sure. The question was what's affecting condo premiums and their deductibles and there's a number of things. It's not one quick answer. Very obviously property and liability claims. lnsurances too often see these days of the maintenance plan rather than an emergency option or a last resort. You may have heard the saying that water is the new fire. More claims are being made due to water losses in wealthy residential dwellings than ever before. We're becoming more of a ... society, every day, and as a result we're seeing more claims against condos for negligence. So as an example, I slipped and fell on the condo property and it's the corporations fault. So more and more claims are affecting the premiums. Making premiums and deductibles go up. Social inflation related to liability claims, rising cost of insurance claims, as a result of societal trends and broader definitions of liability. We're seeing claims that are bigger and therefore people believe that they are more entitled to larger sums. Mother Nature. We're getting that 100 year storm almost every year at some point, somewhere in Canada, and these are storms that are building and infrastructure just isn't capable of handling that frequently. So we're seeing higher claims, more costly claims. We have more free thaw cycle than we had before. It's an issue with both slip and fall issues as well as ice damage claims. So Mother Nature's not been the insurance industry's friend, by any means.

Rod: We did a survey on Condo Advisor a while back and the survey, one of the question was, in the past 2 years how has your corporation's insurance premium changed? There's 67%25 of those answering it responded that it has gone up by a lot. Is that like sort of a trend? Is that here to stay? Where's the market going here?

Tricia:    Well, as noted there on the slides, we've had historically low rates for a very long time. This hard market has really made it even more of an important time for rates to be boosted. So there's lot of reasons why rates are going up, as you've seen, but depending on who you speak to you'll hear that we're currently in a hard market. Meaning there's higher demand for insurance and a decreased supply of coverages. Insurance companies are making it more difficult to obtain insurance and they're making more hoops to jump through and increasing premiums when they do write that coverage. More and more markets, or insurance companies, are choosing to stop writing this type of business altogether, or substantially even limiting their capacity. If they were normally, say 5 years ago, they were willing to write $20 million dollar capacity of a property, they're not willing to write that, necessarily, anymore. They're only willing to write $5 million dollars worth of that property, and you're seeing a lot of subscription policies, or policies with more than one carrier on them. Ultimately it's harder to obtain insurance, and when you do obtain it, it's more expensive. It's been happening over the last, I'm going to say, 2 years. I don't see it softening anytime soon. I'm going to say we're in this for the long haul. I'm seeing it, and I have not been in this industry for 25 years, but I'm seeing it as headed in the same direction for at least another year if not more.

Rod: Okay. I see a lot of questions actually on the chat channel about that. How do we keep our premium low?

Tricia:    We avoid claims, as much as possible. As a broker I talk a lot about self-insuring and what I mean is it's losses below a certain threshold. Do not look to the corporation's policy to pay for it. So in today's market, if the loss is not at least double the insurance deductible amount, then don't make a claim. I hear so many clients, I hear so many corporations and boards frustrated to hear that, but unfortunately that is in fact the market that we're in right now. There's some debate as to whether condo corporations should include a line item in their budgeting for planning ahead for some of these losses so they don't need to go through insurance to pay for them. With a reserve fund you prepare for major repairs and replacement so it's wise to also prepare for those situations that you can't see coming. How else you can learn from losses. If you've had a number of claims that have happened that are similar and you see a trend. It's important to look at why those are happening and see how you can deter them from happening in future or mitigate them from happening. Mitigate the damages as a result of them. Risk management. Risk management is important. Take regular inspections of the property. COVID or not. Even with COVID we still have to make sure that we're doing these maintenance inspections. We're taking into account what we see. We're noting it and we're putting procedures in place or making repairs to those things that need them in order to deter it. Consider a standard unit bylaw or remove finishes from your standard unit bylaw. We're going to talk more about that coming up. Then educate the owners. Any time you put communication out to the owners just, if there's anything, any concerns that you might have, any ideas of how to keep the property safe, asking for feedback from them as to is there anything that you see that is unsafe or a maintenance issue that should be repaired. In the event of a claim it's possible that the corporation is going to be questioned as to what do you do on a regular basis to keep your people and your residents safe and visitors to the property? This is all documentation. Jason can speak to that. This is all documentation that you have in fact done your due diligence. You've reached out to the owners, etcetera.

Rod: Right. Right, right, right. This is music to Jason's ears, that's for sure. Okay. Let's see. We've covered that already. But I'm going to switch gears a bit because I see time flying by. So we know that premiums are going up. We know that deductibles are going up. We know that the 100 year storm is now a yearly event, or so, and so there's two ways to try to help your insurance history and to try to protect the corporation from these future increases. One of the tools is the insurance deductible bylaw. Denise will talk about that. The other tool is the standard unit bylaw. So, Denise, do you want to walk us through the deductible bylaw?

Denise: Sure. What we're recommending to condominium corporations is they try to get a higher deductible. That's important for the purposes of this insurance deductible bylaw. The first thing you want to check, because a lot of corporations may not be aware of this, they may already have an insurance deductible provision in a bylaw. So let's start from the beginning. We've got the Condominium Act and, with or without a bylaw, if an owner causes damage to their unit and it's an act or omission of that unit owner, which, Rod, you have on the slides here, if it's their fault and if it's within the unit, you don't need a bylaw. The Condominium Act says that that owner is responsible for the deductible. Damage to the unit, maybe your deductible is $25,000, that owner's responsible. If that unit owner causes damage to another unit, or the common elements, or if there is damage to the unit and it's not their fault, that's when you need this bylaw. So we recommend that you check your general operating bylaw. If it's not there then you do a separate bylaw to ensure that that unit owner would be responsible for the deductible if they cause damage to another unit, or the common elements, or there's damage in their unit and it wasn't their fault. That's what you would put in the insurance deductible bylaw.

Rod: Right. I guess if we take even a step further back, so the deductible is that first portion that's not going to be paid by the insurer. Right? As you said, Denise, it could be $5,000 but it could easily be $25,000 dollars and it could be more than that actually. We've heard stories in Toronto of deductibles over $100 and over $200,000 dollars. So that's the portion that the insurer will not pay when there's a claim made against the corporation's policy. Who pays that? That's the question. If there's going to be damage to a unit and the first $25,000 is not going to be paid by the insurer, well then the corporation has really just a few options. One of them is you turn to all the owners and you ask them to cough up $25,000 dollars to cover that deductible, if that's the deductible, and if you don't have that well, either you have a deficit or you have to special assess. That's every time there's a claim. The bylaw, Denise, you're talking about is how to be able to fairly turn the deductible responsibility to an owner. Right?

Denise: That's right and that owner could get their own insurance coverage under the unit owner policy to cover that deductible in the event that they have to pay. That's something we recommend you would advise owners of, in terms of getting their own insurance in place.

Rod: Right. Exactly. An owner would be able, if properly insured, would be able to turn to their own insurer to cover that deductible. Right?

Denise: Exactly.

Rod: Perfect. I was going to say any questions but I see the questions are flaring up. Let me just see here. Different tool now is the standard unit bylaw and this one is the interesting one. So you have to keep in mind, as the starting point, unless you adopt a bylaw the corporation is responsible to repair units after damage. Right? That has always puzzled me. Certainly the owner is responsible to maintain the unit. The corporation is responsible to maintain the corporation, the common element. But the corporation, unless you adopt a bylaw, is responsible to repair a unit after damage up to the standard unit. Anything that's above the standard unit you could have owner's insure and repair it themselves. That's the purpose of this bylaw is to define what are you going to put in that standard unit. Naturally there's a wide variety here. So if you include everything in the standard unit, everything that the developer sold you, that is more expensive to repair if there's damage. Right? On the other hand of the spectrum, if you remove everything from the standard unit, meaning that the owner is responsible to repair everything after damage, the less you have in the standard unit, the less expensive it is to repair after an insurable event. So the corporation has to decide what's the level of comfort here. Do you want to include everything and therefore face the risk of increased premium and more expensive repairs? Do you want to exclude everything and minimize the risk to the corporation? Or do you want to go for a middle ground and you just remove the expensive finishes? Such as flooring or cabinetry and so on. So, what has become more and more popular, and Denise may after that sort of give us more of a Toronto sort of perspective on that, but what is becoming more and more popular is to remove everything from the unit. By that I mean to have owners insure what they own. Right? If the standard unit is the concrete box and if you're always going to give your owners access to water, to electricity, to heat, A/C and so on, you give them access to all the common services but everything that's inside, everything that an owner owns; the floor, the cabinetry, the countertop, everything, if you turn that to the owner it sort of makes sense for them to insure that. They own it, they selected it, they wanted the expensive finishes, why would I be paying extra to insure that if that's my lifestyle? Right? So that's called the bare bones or, as well call it here, the bare box. If your standard unit is a bare box that's what the corporation will insure. It will insure the structure. It will ensure that you always have a place to put the unit but all everything you fancy in your unit, all the expensive finishes, marble from antique Greece and those wonderful woods from a distant country, that's great. It looks amazing. Repair it and insure it yourself. Not me. Don't put it on me kind of thing. So what would be the benefits of that would be it would reduce the collective insurance costs or, maybe more accurately, it would flatline going forward. It would help keep the premium down because now the corporation does not have to insure all these expensive finishes. It would be more equitable to owners if you went with such a bare bone or bare box standard unit. It would be more equitable to owners because, as I said, why am I paying for your life choices? Right? And it would put the onus on owners to be more careful, in most cases. If you know that you're on the hook for your own unit, well maybe you'll be more careful. Maybe you're not going to flush rice down the toilet. Maybe you're not going to turn on the taps and go for a walk. Also, in our experience, it reduces disputes between insurers and owners because obviously if the water comes from the unit above and damages the unit below, you suddenly have three insurers around the table. The insurer from above saying, "Well, that's not my fault. We don't cover this." The insurer from below saying, "Well, it was your water. We don't cover that." And the insurance from the corporation that would come in and say, "Well, yeah, we cover this. We don't cover that." By having a standard unit, which places on each owner the responsibility to repair their unit after them, that just streamlines the repair process. What's interesting is that most owners are already insured for that. If they're not insured it's not very costly for them to have their unit insured. So what we did last time I spoke about that, last week, we sort of, and these are just examples, but we basically went around the corporation and we asked people to tell us who is their personal insurer and what's their coverage and what it costs to cover. So you'll see, and again, these examples are just examples, but you'll see that on the first slide, improvements and betterments, all of these insurers were all already providing coverage. Now obviously Economical, in this example, provided more intact with at $500,000. Desjardins at $344,000 and to go down the line. So each owner gets to pick the level of insurance they want to repair their units, and you can see at the bottom, the cost isn't prohibitive. The cost for each owners. I know it may sound like witchcraft to you what we're talking about and think, "Oh my goodness. What are you talking about?"  But that's how every home in Ontario is insured. This is not novel what's being presented here. Maybe I'll turn to you quickly, Denise, and then after that to the managers. What's your experience in Toronto with respect to the actual bare bone? I think it's less popular over there.

Denise: Well, I don't know if it's Toronto or generally our firm, the past few years we've been doing standard unit bylaws, and taking out the countertops and the flooring, because that's were most of the claims were. We weren't really going beyond that but after seeing what's happened with the insurance rates and difficulty in getting insurance, even just our discussion yesterday, I think we're going to recommend going the bare bones route. Something else to keep in mind, and I see that Michael Clifton said something in the chat, we're going to have changes to the Act and we're anticipating that there will be a standard unit schedule or a bylaw. Do we wait until then? Or do we just do our own standard unit bylaws for now and then see what happens later?

Rod: Right, right. I guess time will tell how much the Province will break that section of the Act when they get to it. Sean, what's your experience in the Ottawa market? Are these sort of common? Are they being adopted?

Sean: Yeah, it's much like Denise said. We have seen the standard unit definition gradually getting stricter and stricter. Taking out countertops, taking out flooring, because those were the high risk items. But now we're seeing it's not enough. The claims are still escalating. As Tricia said, water is the new fire. We need to manage claims and the only way we can do that is to reduce the likelihood or the types of incidents that are going to result in a claim. That's to get down to that bare box. We are seeing more and more of the bare box definition. We'd always been a little agnostic on it, I think, until the last year and a half when we saw the tightening of the market, or the hardening of the market. With premiums, I had a momentary glimpse of hope when I saw one of our clients had a renewal with a 10%25 premium, last month, I thought, "Oh. This is light at the end of the tunnel." Yesterday we had one with 100%25 increase in the premium with no claims over the last year. So it's not getting any better and obviously we're seeing a huge increase in the claims that are going to be coming. So it's just going to get tighter and tighter, I think. So whatever we can do to manage claims I think we have to do.

Rod: Right. Tricia, the benefits for a condo corp in your neck of the woods, to adopting these? What do you see?

Tricia:    I see that we've got a lot of them already. I'm going to say most condos have them. If they're not already in place they're trying to get them in place. I see that we've got similar between bare bones, kind of a middle ground between bare bones and a full unit. What exactly did you want to know, Rod? Sorry. I mean we have certain questions on the chat.

Rod: The chat. That's great. Do you foresee, I guess, is that helpful to keep the premiums low?

Tricia:    I do.

Rod: I don't expect premiums to go down as a result of it but I do expect the premiums to be flatlined going forward. Is that sort of your experience?

Tricia:    I do see that as my experience. The less you have included in your standard unit the less the condo's responsible to insure and therefore repair in the event of a claim. So if there aren't claims they're going to be far less expensive, and therefore the insurer isn't going to be paying out quite as much money, and therefore the premiums don't have to go up or there's no claim surcharge, as we call it. Absolutely. I see that it's not a quick fix. It's kind of a long game. It's the long game to save the money down the road rather than quickly snap your fingers, get a standard unit bylaw in place or a bare bones bylaw in place, and then suddenly your premiums are up. I don't see that happening.

David:    Rod, I'm seeing a question in the chat that's coming up in a few different ways on this exact topic. How bare bones or bare box do you make a bare box bylaw? People are saying, "Can we just exclude everything and what does the Condo Act say on that?"

Rod: Right. So what the Condo Act says, and, Denise, if I misspeak jump in, but the Condo Act basically says that with a bylaw you can define what's the standard. The standard unit. Certainly our bare box model, in its strictest version, excludes exactly that. Everything. The flooring, the walls, the cabinetry, the counters, the sinks, everything. But always promises to provide the structure, a concrete box, concrete walls, concrete floor, and a connection to all the common services. That's the purest bare box version of a standard unit. If the owners are prepared to adopt such a bylaw, and they do, I had one adopted last week again and one the week before that, when you explain it properly to owners they see the benefit. Owners have to view this not as an owner. When you look at your insurance regime and scheme in your corporation. When you look at whether to adopt this bylaw, don't view this as an owner. Put your investors cap. The investors cap would say, "Which corporation do I want to invest in? Which is the one that has the lowest risk to the corporation? Which one has the lowest risk of seeing a claim result in our premium mix load?"  I mean we've seen that where premiums went from $20,000 to $75,000 to $110,000. So just do the math. The difference between $20,000 and $100,000 is $80,000 extra thousand dollars that you'll have to pay if you need to turn to the corporation when there's damage to a unit. Right? Or to multiple units. The bare bone unit is exactly that. There's nothing included in it. Now, you need to always ensure, and I think that was your caution, Denise, yesterday, whatever is a common element has to continue to be provided. We're only changing the definition of what falls within the unit. The corporation, I guess Denise, is always going to be responsible for the common elements.

Denise: That's right. That's why Schedule "C" is the first place to look to see what the boundaries of the unit is. Then once you have that you can determine the standard unit bylaw.

Rod: Right. Exactly. So I hope that answered the question. We're running out of time, folks. This is the final episode of the season, and I wish we could keep going for a long time, but I have a supper to go to. Sorry, folks. So any other questions, David, that you saw that's worth having a look at it?

David:    The thing won't stop. There are a lot of questions that I've been trying to jump in with ones that are relevant as we're going.

Rod: Right. I see that Michael says that, "The bare box has been in place pretty much since 2001 as standard practice." Because I remember when I started to talk about that here in Ottawa, people really thought I was a bit insane or very radical. Imagine this. Asking owners to insure what they own. Oh my goodness. Anyway.

Denise: Rod, I just want to say something. We were doing that, bare bones, but only for commercial units back in 2001.

Rod: Right, right, right. Okay. At the end of the day, folks, the bylaw is always submitted to a vote of the owners and if all requests of educating the owners, and presenting what is in their best interest and trying to convince them and get them to understand it is in their best interest, but at the end of the day, owners will get to vote and you need 50%25 of all registered units, of all units, to vote in favour of it if you're going to adopt it. Okay, folks. It's almost 6:00 o'clock so it's time to bring this episode to a close. I'm going to go around the table. I'm going to thank my panelists, as usual, and maybe ask them for a piece of advice for the summer. Sean Cornish, from Apollo Property Management, thank you so much. It's been quite a few episodes now. Any piece of advice for the summer?

Sean: Well, I would start out with a comment. I'm just find it. I was expecting a 2 hour season finale so I didn't expect to be finished quite so soon. But, advice? I've had the pleasure or the difficulty of straddling two Provinces and it's kind of interesting seeing how things are being done in Quebec and how they're being done in Ontario. I received an invitation yesterday to play squash from somebody I know in Quebec and visited a restaurant to see how they're using their COVID protocols. Katherine nailed it when she was saying, "We're not in the business of amenities. We're in the business of condos." and we should not be taking our cues directly from the private sector and how they're doing things because they have a profit motive and we very clearly do not, in the condos. We need to worry about the health and safety of our owners and residents and that should drive what we do.

Rod: Thank you so much. Absolutely. Katherine Gow, from Crossbridge, speaking on behalf of ACMO. In 144 characters, advice for the summer?

Katherine: I can't make my lips do only 144 characters. My advice for the summer, and I do want to thank you, Rod, for putting this panel together. It has been really terrific for me as an opportunity to crystalize a lot of my thinking surrounding COVID. I think it is part of what I would recommend to everybody through the summer. Take as many examples as possible from your property manager, from neighbouring communities, from commercial outfits in order to make your plan. Communicate it well and frequently. The other thing is if you communicate what you're thinking about before you actually implement it, not only will you gain buy in from all of your homeowners, you might get a great idea from them that you can use and implement. So keep the communication flowing. The plan will not be perfect no matter how much thought goes into it. No matter how much research and it will constantly change so be open to that as well.

Rod: Very good. Thank you so very much. Still going around the table. I can't thank you enough, Denise Lash, from Lash Condo Law. I can't thank you enough for all your guidance, for all your advice, for all the time you've put into this. For having taught me to blog and for pretty much having set me on the condo law path. Thank you very much.

Graeme:    Basically unleashing him on the world.

Denise: Well, yeah, no. I was going to say, Rod, you've done an amazing job of taking on this leadership role, bringing all the various organizations together and I want to thank you for that. I am getting constant compliments from clients and others who are just saying, "Condo Advisor is a really special evening." They enjoy it. Rod, especially you. But my closing comments, summer or not, is no waivers. This isn't a popularity contest so board members, don't worry about opening the amenities. As lawyers we want to protect you and we're doing that by telling you not to open the amenities. Not yet. Listen to Jason's advice. I like the 21 day period. Wait until others open up the amenities. Wait the 21 days. If no one gets COVID then think about taking those steps.

Rod: Right. Absolutely. Thank you, Denise. Graeme MacPherson, of Gowling WLG. Parting words, buddy?

Graeme:    Well, I've kind of rolled into this season finale like the class clown at the end of school right before the summer vacation. I crack a few jokes and show up late. I'd just like to thank all everyone who has been tuning in so often to see us. Thank you very much for that. It's been an absolute pleasure doing this. My advice for the summer is keep staying safe, stay informed and keep doing all the hard work that you've been doing that's hopefully getting us out of the woods.

Rod: Thank you so much. David Plotkin, of Gowling WLG. Parting words, buddy?

David:    Yeah. I just wanted to thank everyone also. It's been a tremendous amount of fun doing this every week. It requires me to brush up constantly on all of the moving parts and the changing directions coming out of government, and it's allowed me opportunity to interact with a lot of you, the viewers through the chat and through these webinars, but also great for getting emails now from former clients, the current clients, from new clients, just making mention of our webinars and how much we've all enjoyed it. My advice for the summer is that we're all still here. We all still exist. We're all still doing our jobs. We're just not doing the webinar. So please do feel free to reach out to us if you need our assistance and enjoy the weather and enjoy all your summers.

Rod: Wonderful. Thank you so much, David. Jason Reid, of the National Life Safety Group. You've been with us pretty much, I think, from the beginning. Always the voice of reason. Thanks so much. I can't thank you enough as well. You've provided all sorts of free templates to our viewers. Thank you very much for that. Parting words, Jason.

Jason:   Rod, thank you. I'm just privileged to be along side here. This has been a real mental health thing for me. I participate on a different sector or industry webinar 3, 4 times a week. Wednesday and Tuesday nights are the condo industry. It's amazing to see the passion and the dedication and the turnout to these events and what everybody on these calls have done to better their communities. You've raised above other industries, that I will not name, and that's impressive.

Rod: Okay. Thank you so very much. Tricia Size, of Gallagher Insurance Broker. You've been with us twice. Thank you, again. You did all the heavy lifting today. Any words of wisdom before we go, and before the door behind you gets opened by the kids waiting for supper, I assume.

Tricia:    Thanks.  I just want to say thanks for having me. You're a great group. It's been a great group to work with. I enjoyed answering the questions before I got a little lost. There's a lot going on, Rod. I don't really know how you do what you do. But well done. My advice is just, as all of these people sit in front of you on this webinar as David said, if you don't know just ask, reach out. We all are here. We're doing this. This is what we do. This is what we love. So please ask the questions and just make sure you're getting the answers before you make a move. Thanks, Rod.

Rod: Thank you. Well, folks, this was a lot of fun. It all started on a dark and cold Tuesday night on March 17^th and we hesitantly launch our first webinar on March 18^th and since then, week after week, we've had this amazing panel of experts. You've just heard them again. Can't thank them enough for what they've done. It's a lot of work to put these together but they're a lot of fun to put together. I'd like to make a special mention to two directors who have registered from the very beginning. They haven't missed an episode yet. We have Ross Glasgow, a director in Ottawa. In fact, I know exactly where he lives because he lives across the street from me, and ... Vanderberg, another director from Ottawa. Honourable mentions to people that actually did attend 14 webinars. Brian Birney, a director and David Dever, another director. There's tons more but these people they're frequent flyers. So thanks so much for your trust. Thanks so much for being with us week after week. We'll continue to monitor the situation and we will continue to blog about condo law. Two great blogs to follow, of course Condo Advisor if you so desire, but also Denise Lash has a great blog of her own. We will continue to blog on these things. We'll continue to bring you up dates and we'll keep our eyes open. If there's an update, usually the Province seems to unleash updates before a long weekend. So if anything like that happens, if we need to call you back to our living room here, we'll do that for sure. But otherwise, I think barring any unforeseen event, we're probably going to see you on the other side of this summer. I think that's where this is going. So, people, I thank you again. Thanks for your trust. Thanks for being with us. Be safe. Be healthy and be good to one another.