Found this article about insurance issues with respect to condominiums:
Allison Lampert, Reuters
Globe and Mail, April 2, 2015
Rising claims for water damage in condo buildings and inadequate regulation have led insurance companies to refuse new clients or demand higher premiums for coverage, adding fuel to concerns about quality in Canada’s fastest-growing housing segment.
In March, Aviva Insurance Company of Canada stopped taking on new business from condo corporations in Quebec, citing rising claims and weak legislation that allows owners to set aside insufficient amounts to cover repairs and maintenance, spokesman Glenn Cooper said this week.
“Due to lack of regulation and an increasingly high amount of claims in the space, we would be unable to achieve an adequate premium,” Cooper wrote in an e-mail.
Ontario and Quebec are expected to introduce new legislation over the next few months to reform outdated provincial condo laws that critics say do not go far enough to prevent quality problems as condo buildings age.
Other insurance companies are being more restrictive about which condo corporations they will service, and the cost of coverage is rising.
“We know it’s a growing problem across Canada,” said Toronto attorney Armand Conant, who heads the condo department of Shibley Righton LLP. “Premiums are going up and in Ontario people are concerned.”
A survey in January of 700 Quebec condo corporations by an industry group found that 55 per cent changed insurers over the last five years because of higher premiums, while 13 per cent were refused a renewal by their insurer.
Rising prices for single-family homes in large cities, combined with Canada’s reputation as a safe haven from global financial storms, have driven condo development in Toronto, Vancouver and Montreal, attracting young professionals, aging boomers, and investors spooked by stocks, bonds and foreign banks at risk of failure.
Yet cases of shoddy construction in Canada’s largest city, Toronto, have led to lawsuits and high repair costs for problems such as water leaks, with premiums and insurance deductibles expected to grow further.
Water, the number one cause of damage, has already led to deductibles as high as $100,000 for certain condo corporations in Vancouver.
“We need to improve quality of construction and ensure repairs and preventive maintenance are rigorously done by the condo corporation,” Pierre Babinsky, a spokesman for the Insurance Bureau of Canada, said in an e-mail.
Then found this 2011 article about “glass condos” described as “throw-away buildings”
Throw-away buildings: Toronto’s glass condos
CBC News, November 14, 2011
Many of the glass condominium towers filling up the Toronto skyline will fail 15 to 25 years after they’re built, perhaps even earlier, and will need retrofits costing millions of dollars, say some industry experts.
Buyers drawn to glass-walled condos because of the price and spectacular views may soon find themselves grappling with major problems including:
■Skyrocketing energy and maintenance costs.
■Declining resale potential.
Glass condominiums — known in the industry as window walls — have floor-to-ceiling glass, so essentially the window becomes the wall. Window walls generally span from the top of the concrete slab right to the bottom.
One developer calls glass-walled condos “throw-away buildings” because of their short lifespan relative to buildings with walls made of concrete or brick.
“We believe that somewhere between, say, five and 15 [years], many, many of those units will fail,” said David House of Earth Development, which bills itself as a socially responsible property developer…
Glass walls have been popular among developers and consumers alike because they’re cheaper than more traditional materials and make a good first impression. But they aren’t energy-efficient and come with a hidden price that could soar down the road, engineers say.
Floor-to-ceiling glass walls heat up and swell in the summer, freeze and contract in winter, and shift with the wind, engineers say. The insulating argon gas between the panes escapes, the seals are breached and the windows are rendered useless against the city’s weather.
Eventually, the glass walls — the skin of these condo high rises — might have to be replaced entirely, with condo owners picking up their share of the multimillion-dollar costs.
“Now is about when we should start seeing trouble with 1990s buildings, with the glass starting to get fogged up, the rubber gaskets and sealants starting to fail,” said John Straube, a building science engineer at the University of Waterloo.
Condo owners file suit
Complaints and lawsuits have already begun.
Condo owners in a tower off Front Street [in Toronto] are suing the developer, Concord, claiming the window-wall system in the nine-year-old building near the Rogers Centre has defects and water is seeping through.
CBC called Concord to discuss the lawsuit, but there has been no response as of Monday.
Toronto is also seeing the high cost of retrofitting a highrise. At First Canadian Place, a retrofit will take three years and $130 million to complete.
Halsall Associates says the cost of re-skinning a residential tower could be $5 million to $10 million.
“But that is the actual removal and replacement only – there is nothing in there related to additional security costs or relocation costs for residents,” says structural engineer Sally Thompson.
Straube said many condo owners have no idea about the expenses they’re in for and don’t ask the right questions.
“Do you want a building that is going to appreciate over the long term? Do you want a building that will be comfortable and energy-efficient? If so, you need to ask tougher questions of the marketplace.”
Windows tempt buyers
The glass walls that undermine a condo’s durability and energy efficiency are a key part of the attraction when potential buyers first step into those sunlit spaces overlooking the city…
“As time goes on, what they have to be concerned about are maintenance fees,” [real estate agent Linda] Pinizzotto said. “There’s certainly a lot more care and requirements in the building if they have floor-to-ceiling windows.”
Glass-walled condos meet the requirements of the Toronto building code, although the code does not specify how long a building should last. Energy-efficiency is also a fuzzy area, since condos aren’t rated that way.
“We don’t have energy-efficiency ratings on condominiums and that’s too bad, because we get them on dishwashers, refrigerators, and they only cost a few hundred dollars,” said Ted Kesik, a professor of building science at the John H. Daniels faculty of architecture, landscape and design at the University of Toronto.
Janice Pynn, president of the Canadian Condo Institute, isn’t sure energy efficiency is a big factor for condo buyers initially — even for buyers who care about not wasting energy.
“People talk that they want it, but when it comes down to what it’s going to cost them, it doesn’t even come into the equation,” says Pynn, whose Simerra Property Management company manages 250 condos across the GTA.
“It really is ‘Can I afford to buy this?’ not ‘What am I willing to pay to have a green building, or a building in the long term, that will be far more economical, and cost-saving and for the environment?’ They’re just not asking those questions.”