When condo historians look back on the early 21st 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.”
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.”
