CCI Toronto News

August 3, 2021 - CCI Toronto News

“Condo Collapse!! What About Us??”


The Surfside, Florida condo collapse has grabbed the attention of everyone in the condo world.  Surprise!  Disaster!  Tragedy!  How?  Why?  We hope to address a number of relevant areas for the condo community at large.  Industry experts representing different specialties will weigh in on the event, each examining it from their perspective, and in particular as it relates to us here in Ontario.


Patricia Elia, B. Comm., LL.B., Adler Trained Coach, Canadian Condominium Institute (CCI) National Executive Board, and Senior Lawyer, Elia Associates

Patricia Elia is a senior lawyer with Elia Associates and has practiced condominium law for 20 years with Elia Associates.  Patricia is intrigued by the interplay of economics, the law and critical thinking models.  As an active industry participant, she believes that the sharing of knowledge is empowering for Boards of Directors. Patricia is passionate about the condominium industry because of the important role condominiums play in the lives of real people.

As of the day of writing this article, which is almost four weeks since the disaster occurred, people are still missing and five lawsuits have been commenced with respect to the collapse of the Surfside condominium and a judge has ruled that the insurance will not be enough. 

Where were the Directors?  What was their obligation and duty to protect the community?  Did they meet their obligation? Did they sign up for personal liability?  Will Directors and Officers (D & O) insurance be enough?  

In Ontario, we are fortunate to have the Condominium Act, 1998, which consciously brings the repair, maintenance, and replacement of the Corporation’s capital assets to the agenda of every board of directors, and to the attention of all unit owners.  Qualified professionals must prepare a reserve fund study (RFS) every three years; with the preparation of some of these studies there are actual physical inspections. The board must review the RFS and be proactive on both saving for and undertaking the capital asset replacements.  All unit owners are urged to read the RFS.  A Reserve Fund Plan (RFP) must be adopted, funded and MUST THEN BE IMPLEMENTED.  With this said, while work recommended by the plan should be implemented, the time and scope may vary from the RFS timeline if information supports the same. Boards should do their due diligence thoroughly and consider the risks associated with ignoring recommendations regarding repairs of a structural or safety nature, and only do so if a second opinion provides a viable alternative.    Finally, saving an inadequate amount to keep common expenses low is negligent in my opinion and, and Direction & O coverage should not apply to such negligent steps taken by directors. 

However, if there is a real concern that implementation of the Act has not been strictly or adequately complied with – how does this get enforced?  To the extent that boards, engineers, property managers and/or unit owners have contributed to the failure to comply consciously, I think that claims could arise against each of or all of these parties.   I think that boards who stumble upon negligence or breach of duty must be equally careful to not look the other way because the same could amount to a breach of responsibility and duty, or be oppressive. 

The disaster in Florida is a tragedy which could have been avoided.  It is a stern wake up call to every board of directors of a condominium corporation in Ontario to ensure that section 37 of the Act is fulfilled in discharging their duties of office. This includes adequate care, diligence and skill that a reasonably prudent person would exercise.  If you, as a director in Ontario,  knew that an engineer had reported to the board about the need for immediate rectification of structural elements and that the evidence was clear, what would you do? One director I spoke to said, they would not be living in the building any more.  In our practice we had to deal with an aquafer in the basement of a condominium that was washing away the foundation and the building was immediately evacuated until adequate rectifications and dewatering was implemented. Wilful blindness, excuse or ignorance is not going to exonerate anyone from liability nor is it going to be good enough to say “we did not have the money”. 


Lyndsey McNally, OLCM, CCI - Toronto Area Chapter (CCI-T) Vice-President, and Director, Condominium Finance, CWB Maxium Financial

Lyndsey McNally has worked with condominium corporations in the Greater Toronto Area since 2002 in a variety of roles including administration, physical building management, financial management, organizational management, and policy oversight. At CWB Maxium Financial, Lyndsey develops and implements customized financing solutions to condominium corporations.

Could such a tragedy happen in the Toronto market? The answer is unfortunately, yes.  Too often, condominium boards struggle with balancing the need for repairs and keeping condo fees affordable for owners.  The cost of major capital repairs has been escalating in recent years, and many of our condominium buildings are reaching an age where the most expensive projects need to be undertaken.

In Ontario, the Condominium Act 1998 offers some protection by setting out clear obligations for maintenance and repair, and an obligation to adequately fund the reserve fund.  However, there is still little oversight in condominium operations.  Often individual owners or groups of owners can apply strategies that block their board from being able to make the right decisions that protect the safety of community members.  It can be a difficult decision to proceed with very expensive repairs, because the individual financial position of each owner can vary so greatly and there is always pressure to keep condo fees as low as possible.

Delays are thankfully not always tragic, but they always have consequences.  It is better for condominium boards ensure they consider all their options, including the implications of deferring any required work.  Special assessments and drastic fee increases are not always the only option.  

Membership with CCI-T is so important because we help drive social and financial success in condominiums.  Not only do we provide education to the condominium market, but our expert professional and business partner members are there to provide the right advice and support to condominium boards.  When faced with difficult decisions, relying on the advice of professionals helps board members to use the right repair, communication, and financial strategies – and avoid liability.  

While we don’t yet know the exact circumstances surrounding the Surfside collapse, if you are a condominium director it is worth asking yourself if your building could be the next tragedy.  Are you prioritizing costs over safety? 

Insurance Appraisal

Vic Persaud, B.A., CCI-T Director, and Manager, Business Development, Suncorp Valuations 

Vic Persaud is a Manager of Business Development for Suncorp Valuations responsible for selling insurance appraisal services to condominiums. He is also on the board of directors for CCI-Toronto.

The Surfside condominium tragedy demonstrates that, although rare, total losses to condominiums can happen. So, what is the board’s responsibility relative to property insurance? In Ontario, the Condominium Act states in Section 99 (7) that” Subject to a reasonable deductible, the insurance required under this section shall cover the replacement cost of the property damaged by the perils to which the insurance applies.”  The board must therefore ensure that its property insurance coverage is for the full replacement cost of the condominium. 

How can a board determine the replacement cost of the condominium? Once constructed the cost of building materials and labour generally increases over time resulting in a higher cost to replace the property if a total loss were to happen. Insurance brokers may try to accommodate for these increases by applying annual inflationary increases often around 5%. This may or may not result in an insurable value that is reflective of the replacement cost depending on actual construction cost increases. 

The most accurate method to determine the replacement cost would be to engage an independent third-party appraisal company to complete an insurance appraisal. A qualified appraisal firm will use current building material and labour costs to determine the replacement cost of the condominium as of the appraisal date. By engaging an appraisal firm, the liability associated with the development of the insurable value is transferred to the appraisal firm. Reputable appraisal firms will also carry Errors and Omissions Insurance for some additional protection of their clients. Lastly but most importantly, the appraisal firm should have appraisers that are accredited by the Appraisal Institute of Canada or American Society of Appraisers completing or signing the appraisal reports.

One final thought to keep in mind is that the cost of an insurance appraisal is nominal, often just a few thousand dollars, but the cost of having an under-insured property can result in serious financial and legal consequences. Even if a total loss never occurs, an insurance appraisal may result in premium savings if the previous insurable values were inflated incorrectly over the years.


Steve Ilkiw, Principal, CondoHive

Stephen Ilkiw is Founder of CondoHive, a strategy and communications firm focused on the needs of Condominium Communities.  Stephen holds a Masters Degree in Professional Communication and in addition to working with condo boards has extensive experience consulting to global, national and regional organizations.

As authorities in Florida continue to peel back the layers of who, what, when, why, and how, it’s imperative for all condo boards to give thought to what can be done to prevent similar scenarios in your own community.  Alongside the important legal, engineering, insurance, and management perspectives to ensure a building is sound and its residents protected, one should not ignore the role communications can play in preventing disaster scenarios.

First, a condo board should strive to have a trusting relationship with its stakeholders.  The stakeholder group includes owners, tenants, staff, vendors, neighbours, and others who are impacted by the decisions of the condo corporation.  Trust is gained through transparency, regular communication, and evidence of responsible decision making. Trust is also gained over time, so it is something your board should be regularly striving to build and maintain. 

Second, when a board communicates, it should think about its audience and desired outcomes. Are there language concerns?  Do we use too much jargon?  Are people digital friendly? Do we need a town hall event? How are people likely to react? Is the news going to be upsetting? Do we need people to act?  How do we want people to act? Keep asking questions until you have addressed the needs of your audience practically and effectively.  

Third, when faced with a situation where significant costs or actions are required to avoid a bad situation, consider including an external perspective. Look to the management company to bring in someone senior, consult with CCI-T CondoSTRENGTH peers, or look to a communications consultant.  When you’re in the middle of a difficult scenario, you may often lose the perspective to make the right decisions. Someone external will help keep you on track.  

Finally, in the scenario where a Board is addressing an important issue, make a plan.  Plan for budgets, timelines, roles, responsibilities and do not forget a communications plan. It is equally as important as other aspects of a plan, and often the one most forgotten.

Going back to the original point of trust.  Everything is easier when there is already a strong foundation of trust.  This is something every condo board can action today. Do we have our stakeholders trust? Can we improve this trust? What can we do to maintain or improve this trust? 
What happened in Florida is rare and unlikely for any condo in Ontario.  But even in our city there are plenty of floods, fires, unforeseen structural repairs, and problems that are put off for another (more expensive) time. So be a forward-thinking board by building trust now and always communicate effectively.  


Sally Thompson, Managing Partner, Synergy Partners

Sally Thompson has over 30 years of experience delivering high quality property condition assessments, reserve fund studies, performance audits and engineering related to building renewal. Sally strongly believes that clients value sound, reliable advice over the lowest price, but in exchange, can be counted on to give 100% to everything she does.

The media is linking the failure of the Surfside building to deterioration of the concrete frame, in part due to exposure to salt water in Florida and proximity to the ocean. Salt is one of the Achilles’ heels of reinforced concrete structures. Normally reinforcing steel in concrete is protected against corrosion due to the high pH of the concrete.  This causes a “passive layer” to form that protects the embedded steel. However, when salt is introduced into the concrete, it can permeate to the level of the steel, remove the passive layer and cause the steel to corrode. The corrosion products on the steel take up more space than the original steel, causing expansive forces which then cause the concrete to break up.  This is often referred to as “delamination” or “spalling” depending on whether the concrete is just loose or has actually fallen off.

Unfortunately, we are not immune to the destructive power of salt here in Ontario. There are several sources of salt that can damage Ontario structures. De-icing chemicals used on our roads get tracked into parking garages. For buildings constructed prior to 1990 or so, salt was sometimes added directly to the wet concrete as a set-accelerator when the concrete was cast during cold weather.  Salt may have been put in the formwork to melt snow and ice prior to placing the concrete. While these practices have been stopped since, the salt that was added to those buildings at the time of construction continues to cause deterioration of portions of the structure that are exposed to water.  This especially applies to balconies and garages. 

Carbonation, a reaction between carbon dioxide in the air and the concrete which reduces the pH of the concrete, can also cause corrosion of embedded reinforcing steel. Soffits are more vulnerable to carbonation, so this type of deterioration is often seen on balcony slab edges and the undersides of garage slabs. Balcony slab deterioration was evident on the Surfside building but was unlikely to have contributed to the failure. 

Post-tensioned structures have additional risks, as they can be prone to corrosion, even without the compounding challenges of salt or carbonation because the steel reinforcing is installed in greased conduits/sheaths rather than directly in the concrete.

Boards must tend their buildings properly. Most, but not all, garages now have protective waterproofing systems installed.  If maintained properly, this waterproofing not only stops water from dripping on cars below the slabs, but also protects the structure from exposure to salt. If the building has admixed salt in the concrete, or is post-tensioned, then an additional degree of care, including routine structural evaluations, is required.

In Ontario, we have had a few corrosion-related collapses in the last thirty years.  Examples include a garage roof deck in Mississauga, a garage slab in Kingston, and the mall in Elliot Lake. All three were localized collapses that did not take the entire structure down with them but that may have been more from good fortune than good management. Two garages have also collapsed in Quebec in recent years. During my career, I have visited several buildings that required immediate shoring and/or repair to address structurally significant deterioration. 

Some jurisdictions require mandatory façade and garage evaluations every five or ten years. While there is no similar process in Ontario, our Professional Engineers are required to regard their duty to public welfare as paramount.  This creates a high duty of care with respect to ensuring that structural deterioration is addressed. Ontario engineers cannot simply report structurally significant deterioration and then wash their hands of the issues, which. on first blush, appears to have happened in Surfside. The engineer either needs to ensure that the required shoring and/or repairs are made. If the building Owner, i.e. the board of the condominium corporation in our case, refuses to complete the work, then the engineer should notify the municipal authorities of their concerns so that appropriate work orders can be put in place. 

The six-year requirement for a site-visit based reserve fund study (RFS) is a good opportunity to have an engineer scan your building.  However, in the case of heavy deterioration, the RFS will need to be supplemented by detailed component evaluations for deteriorated components. Professional Engineers Ontario is about to issue a guideline for reserve fund studies which indicates that they consider a RFS for high-risk buildings to fall into the practice of engineering. Once implemented, this will mean that the longer list of RF providers in the Condominium Act would only apply to lower-risk buildings, and only engineers will be able to provide a RFS for high-rises.

The Ontario condominium building stock has almost all (except a few conversions) been constructed since 1968; so, it is all relatively young, with just the earliest condos reaching 40 to 50 years old. Just like the Surfside building, many of those older buildings are struggling to finance and manage required repairs. Note that these repairs are not limited to structural repairs; many expensive components such as electrical systems, windows and cladding also reach the end of a normal service life in this time frame, along with second occurrences of many other renewal projects like roofs, boilers, chillers etc. Therefore, it is critical to have a high-quality RFS in place from day one that does not sugar coat the funding requirements of the building or defer costs onto future owners. Condominium owners need to shoulder the financial burden of properly funding their RF; otherwise, we risk creating many unmanageable situations.  The Condo Act could certainly be strengthened to increase initial RF contributions and provide greater clarity about “adequate” funding. However, the basic requirements are clear and well understood in the Ontario condominium industry.

Unfortunately, sometimes when a Board attempts to follow the recommendations of the RFS, owners object, and the Board is removed via a requisition meeting and vote, even though the board is trying to do the right thing. This appears to be the case with Surfside.  It should set off alarm bells. In Ontario, unit owners who sense that their building has reached an impasse like this, when required work is being bumped down the road unreasonably, can trigger an application for a court-appointed administrator. Although this is an extreme remedy, it is occasionally the only solution to help an underfunded and deteriorated condominium to get back on track.

Property Management

Murray Johnson, CCI(Hon's), CMRAO General License, CCI-T President, and Vice-President Client Operations, Crossbridge Condominium Services Ltd.

A condominium property manager for nearly 25 years, Murray is the Vice President of Client Operations for Crossbridge Condominium Services Ltd. and is the current President of the CCI-Toronto and Area Chapter.  A frequent speaker and author of many magazine articles Murray continues to support condominium director education from coast to coast.

Acknowledging that the Surfside condominium collapse is a tragic event, I can’t help but offer this tragedy as an example of the very worse that can happen if a board of directors continually puts off common element fee increases in the expressed “interest of keeping fees affordable”.  The candidate who runs for election to the Board on the basis of “keeping fees low” should be the largest red flag possible for Owners.  While we have Tarion for new construction defect resolution, a robust building code and a wide array of ongoing compliance legislation, there is no way to legislate against bad decisions.

Ontario law mandates that Reserve Fund Studies (RFS) and the accompanying funding plan must be updated every three years.  However what mandate is there that the study must be followed?  It’s true the auditor would report to owners that the RFS is not being followed, but what if the owners, like those in Surfside, exercise enough pressure on the board not to increase fees?  If lower fees were the driving force behind the actions of many owners, then the auditor’s report would have little impact.  In my opinion, the tragedy at Surfside only supports the fact that the entry level mandated education the CAO requires of all directors is far too little.  

It seems to me that when the province required managers to be licensed, they placed emphasis on the wrong players. Management has responsibility but no authority when it comes to condominium governance.  The very people from which managers must seek approvals are more often than not the least qualified to make sound decisions under the current regulations.  This is not only unfair to owners and directors but places the manager in between a rock and a hard place.  Engineers need to be firm in their positions of not allowing volunteer lay directors to influence funding plans or delay funding top ups as required.  Auditors and engineers, and yes even managers, need to be able to report directors who do not fulfill their fiduciary obligation and this ability needs to be tied directly to the person’s industry credentials.   In other words, if a professional is aware of drastically poor decisions of a board, ideally there would be a requirement to report it or lose your license or credentials.  Thank goodness Ontario (and Canada) has an organization like the Canadian Condominium Institute whose mission is to further the education of directors.  How about we mandate directors take the CCI courses in addition to the provincially mandated director training?

Board of Directors

Eric Lakien, Ph.D., M.B.A., CCI-T Director, and Director & Secretary, YRCC 798, Landmark III of Thornhill

Eric Lakien’s background, when he was gainfully employed, was in financial, operations and general management. He was elected to his condo board in 2017, joining a very dedicated, committed, experienced, capable and involved Board of Directors.  Their board has met with much success for the condo. Being very fortunate to work with an exceptionally skilled Manager, the condo has won two prestigious CCI-T awards - Condo of the Year in 2017, and the Condo of the Decade in 2020.

We have heard from our esteemed colleagues about different aspects of this tragedy as far as it relates to us here in Ontario.  When it comes down to it, most of the scrutiny falls on the condo’s board of directors.  Let’s discuss this aspect.  We have heard of the Reserve Fund (RF) issue.  In Florida it is essentially optional, based on certain conditions!  There are reports of a staggering assessment of millions of dollars spread over the 155 units of this condo.  So, the question to ask – can this type of disaster happen here in Ontario?

We might be tempted to immediately respond with an emphatic “No”!  The Condo Act requires every condo corporation to maintain a RF, and conduct various types of studies on a regular basis to ensure that it is adequately funded.  However, to fully answer the question, we have to dig deeper.  In other words, it depends!

Let’s look at what else we have going for us here in Ontario.  Section 27 (1) of the Condo Act very simply states, “A board of directors shall manage the affairs of the corporation”.  CCI-T has held many educational opportunities that delve into what this means.  What qualities does a director have to have? What is the mandate of the board? What are the responsibilities of a director to fulfill the mandate?  So, if a board of directors acts responsibly and transparently any looming problems can see the light of day and can be addressed.  

The condo should engage accredited outside experts to inspect and maintain building infrastructure.  The board should vet these contracts and management must bring the experts’ reports to the board’s attention.  The board must then ACT, as relevant.  Delay can be tragic, as we have seen with the Surfside collapse.  Burying heads in the sand, hoping that a problem will not manifest itself later is definitely NOT the way to go.  As the saying goes, “Do not be penny wise, and pound foolish”.  However, given the critical nature of what we do, this saying might be more appropriate, “In for a penny, in for a pound”!

In other words, it should never happen here, provided there is a responsible board and management.  This tragedy can and should be a constant reminder of the responsibilities and duties imposed on us as directors.  May it reinforce upon condo directors the importance of the positions we hold, and the critical nature of acting in the best interest of our community.


Can this happen here in Ontario?  Unlikely, and we certainly hope not – legislation and good governance are the frontiers that keep us safe.  However, some issues are paramount.  Let us remember the five T’s – Trust, Truth, Timeliness, Transparency and Tenacity!

On behalf of CCI-T, we extend our deepest sentiments to those affected by the tragedy.  May you be spared further grief.