(Originally posted in the Winter, 2015 edition of the WB Condo Connection, Volume 6, Issue 4)
By: Wayne Klem, (Retired) Executive Director of Property Management – Toronto
At some point in its life, every condominium will either contemplate or will have completed a major project or two through its Operating Budget surplus, or the Reserve Fund through a study by the Corporation’s engineer, which has been submitted and approved by the Board of Directors.
These major projects could be corridor renovations, common element facility refurbishments, landscape revitalization efforts, exterior caulking and/or brick work, window replacement, roof replacement, chiller and cooling tower replacement, boiler and domestic hot water boiler replacement, along with major garage refurbishments. These projects will, on average, cost in excess of $50,000.00.
Under the Occupational Health and Safety Act, any project of $50,000.00 or greater is required to have a NOP (Notice of Project) registered with the Ministry of Labour. The NOP stipulates who the general contractor of the project will be and who should act as the responsible party to ensure that all health and safety regulations under the Occupational Health and Safety Act are being followed on the job site.
Typically, Boards of Directors look to management to oversee and direct such major projects. If management assumes this role we are then classified as the general contractor in the eyes of the Ministry of Labour. It is clear that management does not have the required skills or capacity to take on the role as a general contractor and the responsibilities that this comes with.
Management, on behalf of the condominium, would oversee a project in conjunction with the consultant and/ or engineer to ensure the project is: on schedule, that the site is kept clean after the day’s work, that the area is properly secured, that all progress payments are processed as approved by the consultant and/or engineer for Board approval, and would attend all site meetings and secure all approval from the Board for any change orders required to be implemented by the engineer and/or consultant.
Management strongly recommends that Boards of Directors consider the use of consultants and/or an engineering firm to be involved in any major project from start to finish, as they can greatly reduce the risk and maximize the value of a project. Of course, there is a cost involved to appoint a consultant whether it be an engineer, interior designer or landscape planner; however, the money invested in these professionals to guide both the Board and Management in overseeing a major project is worth the peace of mind in knowing that the Corporation’s best interest is being served.
The cost of a consultant can be charged against the Reserve Fund account as long as the project is part of the Reserve Fund Study. Consultants provide a variety of consulting services depending on the type of project being considered. Management, on the Board’s behalf, should provide three quotes from consultants who are familiar with the type of project being considered and have each outline their services and fee structure. These services would include but are not limited to: a condition survey, developing the scope of work, specifications for the project, tendering the work, receiving closed tenders on behalf of the corporation, and analyzing the quotes to provide the Board with a summary of the quotes received and a recommendation as to whom the Board should consider for the project. Once a contractor has been approved, the consultant will present to the board a CCDC contract form outlining the contractual requirements between both parties for the Corporation’s lawyer to review. Finally the consultant will manage the project and see it through to its completion including periodic site visits, approving progress billings, conducting site meetings and submitting to the Board and management any change orders required for approval outside the scope of work and specifications.
The bottom line, to protect the Board and management, is to select the right consultant for the task at hand and to utilize professionals who are familiar with the industry.