Don’t Wait Too Long – Tarion, Bulletin 19R and New Condominiums

Post by: Craig Robson

We received a call recently from a prospective client who was interested in developing a condominium project.  The conversation went something like this:

Caller: – “We are looking at doing a 6 storey apartment condominium.”

Lawyer – “What stage are you at?”

Caller – “4th floor is being worked on now.”

Lawyer –“Are you looking to sell the units or rent them?”

Caller  “Rent.”

Lawyer – “Good.”

Our response was based on the fact that if the caller was intending to sell new residential units out of the project, the project would be subject to the Ontario New Home Warranties Plan Act (“ONHWPA”) jurisdiction.  The entity responsible for administering the ONHWPA is the Tarion Warranty Corporation (“Tarion”).

If the caller was planning on selling new residential units, the project would then likely be subject to Bulletin19R “Condominium Projects: Design and Field Review Reporting” (“19R”).  19R came into effect on July 1, 2010 (replacing a similar long standing bulletin).

19R applies to vendors and builders of proposed condominiums that have both Part 9 and Part 3 Ontario Building Code (“OBC”) construction requirements and proposed condominiums that have only Part 3 OBC construction requirements.

For most of us who are not schooled in interpreting the OBC it is not always clear when 19R will apply.  Its applicability can sometimes be a surprise.  The basic assumption by some is that it only applies to “high rises”.  The true test of applicability is what part or parts of the OBC apply.

The question of what part(s) of the OBC apply to a proposed residential project should be put to the project engineer or architect at the outset of any such project if there is any thought of selling units.  This question should be posed well before any construction gets underway if there is any chance of the project being subject to ONHWPA.  Tarion asks the question in its application form but we have seen those applications prepared from time to time without careful consideration (called guessing) of what part of the OBC applies.

For the caller referred to above, she would have had a major issue if her intention was to sell residential units out of the project.

Her first issue would be that she should have enrolled the project in ONHWPA before construction started.  That in itself is an exercise of some length.

The bigger problem is with respect to 19R.  19R requires a lot of paperwork, submissions and professional reviews starting before and during all aspects of construction.  The caller in the above example may have simply been unable to comply with 19R because her project was too far along in the construction process to be able to comply with 19R’s preconstruction and submission requirements that are required before and in the early stages of construction.

19R adds a lot of red tape and cost to a project but cannot be ignored with respect to projects to which it applies.  Not being able to comply with 19R requirements may preclude a project from being brought into ONHWPA registration/enrolment.  If a project does not have this registration/enrolment, the builder is not allowed to sell the new previously unoccupied residential units in the project.

The Take Away

  1.  If there is any chance that there will be sales of new residential units in a new project, contact Tarion immediately and at the very least find out what the process is to comply with their requirements.
  2. If sales of new residential units are intended:
    • get the process underway with Tarion well in advance of construction commencement.  It can take a while; and
    • determine with certainty whether 19R applies well before any construction starts.  If 19R applies, make sure all relevant members of your project team know what is required of them – and then make sure they do it.  A qualified member of your project team should be charged with coordinating all of the 19R requirements.
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Beware the Single Pipe

Post by: Meghan MacDonald

Developers and builders need to be aware of section 7.1.5.4. of the Building Code if they’re considering building multiple buildings on one property and only one servicing pipe services the property.  This becomes especially crucial if the property is severed into two or more parcels or if there is any consideration given to having separate condominium plans on the property.

Section 7.1.5.4. provides:

 7.1.5.4. Separate Services

(1) Except as provided in Sentences (2) and (3), piping in any building shall be connected to the public services separately from piping of any other building.

(2) An ancillary building on the same property as the main building may be served by the same service.

(3) Water service pipes or building sewers serving buildings located on the same property may connect into a private water supply or a private sewer conforming to Article 7.1.5.5.

(4) No plumbing serving a dwelling unit shall be installed in or under another unit of the building unless the piping is located in a tunnel, pipe corridor, common basement or parking garage, so that the piping is accessible for servicing and maintenance throughout its length without encroachment on any private living space, but this Sentence does not prevent plumbing serving a unit located above another unit from being installed in or under the lower unit. (underline added)

 At first glance it doesn’t seem like there is an issue for developers/builders constructing multiple buildings on one property because according to subsection 7.1.5.4.(2), ancillary buildings on the same property can share one servicing pipe.

However, consider the following scenario:

  • a developer decides to build two separate apartment buildings on one parcel of land;
  • both buildings will be serviced by a single servicing pipe;
  • halfway through construction of the second building the developer decides it wants to convey title to one of the buildings to a related company.  The developer severs one of the buildings from the property in order to have the apartment buildings on two separate parcels of land.

The developer now has a problem.  Section 7.1.5.4. only allows multiple buildings to share a single servicing pipe if they are located on the same property.

It doesn’t matter that it was acceptable for both buildings to share the single servicing pipe prior to severance.  Once the parcel of land is severed, a violation of the Building Code exists and a municipality could require the installation of another servicing pipe before it will grant any approvals or permits that may be necessary for completion of the properties.

The same issue arises if for any reason two or more condominium plans are proposed for the property.

Installation of a servicing pipe after site servicing is otherwise completed can be a significant expense.

There is one way the developer can avoid having to install a second servicing pipe.  The solution is found in Appendix A to the Compendium to the Building Code:

A-7.1.5.4.(1) Separate Services

Building sewers and water service piping serving buildings that are not located within the same property may be interconnected if the owners of the properties and the municipality enter into an agreement that is registered against the title to which it applies.

There are two issues with this solution:

1. The municipality is not required to enter into this type of agreement because Appendix A is explanatory only and not part of the Building Code requirements; and

2. If the municipality does agree to enter into this type of agreement it will take time and cost money to create an agreement that the municipality will agree to sign.

Bottom Line: be aware of this single servicing pipe issue when planning construction of multiple buildings on one parcel of land because it could add complications and additional costs to a project down the road if the property is ever severed or if separate condominium plans are proposed for the property.