Writ­ten by  Michael McK­ier­nan – Cana­dian Lawyer Magazine

When condo his­to­ri­ans look back on the early 21^st cen­tury, they may iden­tify 2011 as the year Toronto’s love affair with the glass tower began to sour.

The sum­mer was punc­tu­ated with inci­dents of falling glass from high-rise bal­conies shat­ter­ing in the down­town streets, and the year ended with some devel­op­ers and engi­neers voic­ing their con­cerns about the long-term dura­bil­ity and energy effi­ciency of build­ings whose pri­mary pro­tec­tion from the ele­ments is a wall of double-glazed glass.

“Obvi­ously, devel­op­ers are very con­cerned, par­tic­u­larly when you look at the num­ber of con­dos that have gone up, and are still going up using glass,” says Leor Mar­gulies, a part­ner at Robins Appleby & Taub LLP, who is also a mem­ber of the exec­u­tive at the Build­ing Indus­try and Land Devel­op­ment Association.

He says it’s essen­tial devel­op­ers get engaged when poten­tial issues come up.

“It’s tough, because the indus­try wants to make money, and on the other hand it has to be socially respon­si­ble, and I think it is. They’re actu­ally really inno­v­a­tive and a lot of the build­ings that are being built go well above the build­ing code,” Mar­gulies says.“It’s not for the indus­try to set the stan­dards. It’s for the indus­try to work with the reg­u­la­tors to improve stan­dards, which is con­stantly hap­pen­ing. But if there’s a prob­lem, then the indus­try and gov­ern­ment will sit down as they always do and try to find a real­is­tic solution.”

Sally Thomp­son, an engi­neer with Toronto-based Hal­sall Asso­ciates, con­ducts reserve fund stud­ies for con­do­mini­ums, cal­cu­lat­ing the amount of money they need to set aside for future repairs and main­te­nance. She says win­dow walls can be a sig­nif­i­cant source of major projects, typ­i­cally account­ing for around 20 per cent of condo own­ers’ reserve fund contributions.

In the early years after con­struc­tion, she says the qual­ity of the seal­ing job between slabs of glass can make a big dif­fer­ence. Once the build­ing is com­plete, the orig­i­nal seal becomes inac­ces­si­ble and the joints have to be resealed from the out­side. In the first decade, some build­ings get away with repairs to a few local­ized leaks, but one seven-year-old con­do­minium she has done work for is spend­ing around $500,000 to seal up joints on its tower. “With glass, there are so many joints to seal up that those projects become pretty sig­nif­i­cant. Some of these build­ings need seven to 20 kilo­me­tres of caulk­ing on a sin­gle tower,” Thomp­son says. “In a per­fect world, no cladding should need that major of a repair after five or 10 years. If you bought a brick build­ing or a pre-cast con­crete build­ing you wouldn’t expect it.”

At Earth Devel­op­ment, which bills itself as a socially respon­si­ble prop­erty devel­oper, the com­pany steers clear of glass walls, because of con­cerns over build­ing performance.“We’re not anti-glass, we’re anti-all glass. It’s overkill to do floor-to-ceiling glass; you just lose so much energy,” says prin­ci­pal Mark John­son. His col­league David House says there are ways to get a glass look by sim­ply cov­er­ing a bet­ter insu­lated pre-cast con­crete wall with an outer layer of glass, but devel­op­ers tend to be more attracted to the cheaper option of a glass wall.“We want to believe it works. The mar­ket likes it, it’s kind of cool to look at, it’s cost-effective, and none of us are really forced to mea­sure energy, so it doesn’t really mat­ter. But if peo­ple buy­ing con­dos or leas­ing office space were the ones build­ing the build­ing, I don’t think they would be inter­ested in all-glass build­ings. As soon as you fig­ure out this will dou­ble or triple your energy bill, you’d think it was nuts,” he says. “Some day, given our liti­gious soci­ety, I think some­one will fig­ure out this doesn’t work and want to talk about how to get some com­pen­sa­tion somewhere.”

Mark Arnold of Gar­diner Miller Arnold LLP has rep­re­sented a num­ber of condo cor­po­ra­tions in dis­putes with devel­op­ers, includ­ing unit own­ers at Harry Stinson’s land­mark down­town Toronto 1 King West devel­op­ment in a long-running dis­pute involv­ing var­i­ous alleged defi­cien­cies. “One por­tion of it was sim­i­lar to what you have with glass falling from bal­conies, because there were parts of the exte­rior cladding on the build­ing that started falling off. We had to prove why it fell off and to what extent the builder had inves­ti­gated from an engi­neer­ing standpoint.”

The case even­tu­ally set­tled with a global set­tle­ment before trial, mak­ing con­clu­sions dif­fi­cult to draw, but Arnold says cases like the Supreme Court of Canada’s 1995 deci­sion in Win­nipeg Con­do­minium Corp. No. 36 v. Bird Con­struc­tion Co. make it pos­si­ble to go after builders many years after com­ple­tion. In that case, the con­do­minium cor­po­ra­tion was able to recover its costs for repair­ing dan­ger­ous defects caused by neg­li­gent design and con­struc­tion 15 years after the build­ing was sub­stan­tially com­plete. Unit own­ers had to pay to replace the entire cladding after dis­cov­er­ing the prob­lem when a large sec­tion fell nine floors to the ground.

One prob­lem Arnold fre­quently runs into with devel­oper law­suits is find­ing a source of money so he can enforce any judg­ment. “By the time the law­suit raises its head, the builder-developer may have gone or the com­pany is left as a shell,” he says.

But that doesn’t stop him from pur­su­ing the mat­ter if there’s a case to be made for devel­oper lia­bil­ity. One case he’s cur­rently work­ing on involves a con­do­minium cor­po­ra­tion left with $500,000 worth of repairs to bring the project up to code. “The devel­oper is say­ing they’re not going to fix it, and there’s no money left to fix it, so don’t bother us,” Arnold says. “So I have sued per­son­ally the developer’s sole direc­tor, offi­cer, and share­holder, try­ing to pierce through the com­pany veil to get to the warm body, and he doesn’t like it very much.”

Mar­gulies is keen to stress that build­ings with alleged glass prob­lems have been meet­ing the Ontario Build­ing Code, and says the falling bal­cony episode pro­vides a text­book exam­ple for the way devel­op­ers and the author­i­ties should react when issues arise. In a Novem­ber report, Toronto’s city coun­cil rec­om­mended emer­gency amend­ments to the province’s build­ing code after inves­ti­gat­ing six build­ings at four sites affected by falling glass from bal­conies. Those included the Fes­ti­val Tower at the TIFF Bell Light­box and a num­ber of build­ings owned by Lanterra Devel­op­ments. By the time the report came out, Lanterra had already announced plans to replace tem­pered glass on its bal­conies with lam­i­nated glass. The process for mak­ing the less expen­sive tem­pered glass involves putting stress into the glass, which means that it breaks into small pieces when it fails. Lam­i­nated glass, on the other hand, does not shat­ter, mean­ing it is more likely to stay in place when it does crack. “Our first pri­or­ity is the safety of the pub­lic and our res­i­dents,” said Lanterra in a state­ment in August when the change was announced.

Mar­gulies says the Build­ing Indus­try and Land Devel­op­ment Association’s mem­bers were imme­di­ately involved with the city to find out why glass was falling and what should be done about it. “You can only build in terms of stan­dards that are set, so if there’s some­thing wrong with the stan­dards or one of the prod­ucts, then it has to be deter­mined and the builders will work with it,” he says. “The code is always being upgraded and we work closely with the build­ing code commission.”

In addi­tion to strict code com­pli­ance, Mar­gulies says devel­op­ers need to go back to basics to min­i­mize risks, spend­ing time vet­ting con­sul­tants, sub­con­trac­tors, and suppliers.

“My grand­mother used to say she couldn’t afford to buy cheap shoes. Yes, devel­op­ers are always look­ing for the best price for profit, but they’re also look­ing to build a good prod­uct, and the builders that use the right con­sul­tants, and maybe spend a lit­tle more on the right prod­uct are hope­fully less likely to encounter prob­lems,” he says. “My big builders are very cog­nizant of ensur­ing that they don’t end up in law­suits because of poor design or poor prod­ucts. They want to have a prod­uct they can rely on when they go to the mar­ket again. If there are prob­lems hap­pen­ing, that gets out.”

When prob­lems do arise, as they inevitably will, many will be cov­ered by the Ontario New Home War­ranties Plan Act, which imposes manda­tory seven-year war­ranties on new homes in the province. The act is admin­is­tered by the Tar­ion War­ranty Corp., and Mar­gulies says devel­op­ers’ behav­iour in the process can have an impact. “If you’re going to be in busi­ness, things will hap­pen. You can’t avoid it. If you build a 60-storey build­ing, there will be defi­cien­cies and issues, but I think the solid builders step up to the plate. They don’t wait for Tar­ion to come in; they deal with these issues. That’s what sep­a­rates out the good builders. Once they’re in the busi­ness for the long term, rep­u­ta­tion means a lot.”

Mar­gulies says con­cerns over the long-term via­bil­ity of glass-walled con­dos have been overblown, and Denise Lash, who chairs the con­do­minium prac­tice at Heenan Blaikie LLP in Toronto, says con­sumers may be unduly deterred by the idea of dis­pos­able glass-walled build­ings. Experts are work­ing on improve­ments to insu­la­tion in glass wall sys­tems, while other wall sys­tems are not per­fect, she says. “Although the window-wall sys­tems may not last as long, if you get prob­lems with pre-cast con­crete, you could have a very expen­sive over­haul 40 years down the road, that’s going to cost more than it would to do the ongo­ing fre­quent main­te­nance of win­dow wall sys­tems,” Lash says.

In addi­tion, she says reserve fund require­ments should help con­dos fore­see poten­tial issues and plan for deal­ing with them many years down the road. “Engi­neers will come in and assess the life expectancy of all these major com­po­nents, which includes the win­dow wall sys­tem, and they’ll come up with pro­jec­tions over a 30-year period of how much to con­tribute to reserve fund every year,” Lash says.

Even so, condo own­ers do not always react well when handed the bur­den of repairs or replace­ments through main­te­nance fee boosts or spe­cial assess­ments, and devel­op­ers are fre­quently tar­geted in law­suits. In Toronto, Con­cord Adex has faced more than one action from con­do­minium cor­po­ra­tions at its City­Place devel­op­ment near the city’s water­front, while fail­ing floor-to-ceiling win­dows are at the heart of a suit involv­ing Vancouver’s land­mark Wall Cen­tre. Some condo own­ers in the 10-year-old build­ing were hit with spe­cial assess­ments of more than $100,000 to repair an allegedly defi­cient seal­ing job that allows air and mois­ture in through cracks. The total repair bill is esti­mated at $7 mil­lion, accord­ing to a CBC report.

Van­cou­ver and B.C. are no strangers to condo law­suits. The province’s “leaky condo cri­sis” reached a peak in the 1990s as the region’s damp coastal cli­mate, com­bined with inad­e­quate con­struc­tion, left some devel­op­ers, engi­neers, and archi­tects in legal hot water. A 1998 com­mis­sion of inquiry led by for­mer pre­mier Dave Bar­rett laid into devel­op­ers, engi­neers, archi­tects, munic­i­pal­i­ties, and reg­u­la­tors for their roles in the deba­cle, which affected thou­sands of homes and resulted in repairs in the bil­lions of dollars.

Some of the orig­i­nal cases are still crawl­ing through the courts, and the episode has cast a shadow over the condo mar­ket in B.C., con­strain­ing growth while other real estate sec­tors boomed.

Although Toronto’s condo mar­ket shows no signs of stag­na­tion, it may be in devel­op­ers’ long-term inter­ests to address con­cerns about glass con­dos. James Balder­son, who runs B.C.’s Coali­tion of Leaky Condo Own­ers, says con­sumer con­fi­dence in con­dos has been per­ma­nently shaken on the West Coast, and he expects other regions to fol­low in the future. “Here, any­body with a brain is well aware of the leaky condo mess,” he says. “Peo­ple are wak­ing up all over the coun­try to leaky rot­ten con­dos. This will be a prob­lem long in the rev­e­la­tion, and it might go on for years and years as it did here.”

Stricter require­ments in the new Ontario Build­ing Code may force the hands of some devel­op­ers in that province. As of Jan. 1, 2012, all high-rise build­ings must come in 25 per cent above the Model National Energy Code for Build­ings for energy effi­ciency, a pre­vi­ously vol­un­tary stan­dard. “If peo­ple actu­ally com­ply with it, then that should inher­ently reduce the amount of glass you can put on a wall, because com­pli­ance is going to be a huge chal­lenge with floor-to-ceiling glass,” Halsall’s Thomp­son says.

Lash doesn’t see a shift entirely away from glass in the near future because devel­op­ers are guided by con­sumer demand for glass build­ings that deliver afford­abil­ity. Thomp­son would like to see an energy-labelling sys­tem for build­ings. “Only then will we see the truth about how these build­ings are actu­ally per­form­ing. You’d get some com­pe­ti­tion sud­denly, because builders will want to build some­thing that gets a bet­ter label.”

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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