Deficiencies in Common Property, Technical Audits and New Home Warranty Insurance

I always enjoy hearing Michael Ball, P.Eng. from Morrision Hershfield speak.  On January 22, 2013 Mr. Ball presented on the topic of "Technical Audits" at the CCI-SAC luncheon.

This topic has become more timely as a consequence of the changes being proposed by the Alberta Government to require all developers and builders of condominium projects to obtain insurance through a New Home Warranty Programs.  Mr. Ball made it abundantly clear to those present that failure to conduct a timely technical audit leads to it being a strong possibility that condominium corporations will be outside of the tight timelines imposed by the New Home Warranty Programs (1 year for all but structural issues and 5 years for structural issues) to make a claim on this insurance.  The proposed changes by the Alberta Government may also extend these timelines but in no way will these changes diminish the importance of a condominium corporation vigourously assessing the state of the common property. This is what a technical audit does.

Property Managers should be mindful of the possibility that failure to recommend in writing to Boards of Directors of condominium corporations to conduct a technical audit may lead to owners and others affected alleging that the Property Manager was negligent in not so advising.  More significantly, Boards of Directors should also understand the seriousness of the deadlines imposed by the New Home Warranty Programs and understand that the failure to conduct a technical audit could very well leave a condominium corporation on the wrong side of the deadline and leave Board Members exposed to similar allegations.

Morrison Hershfield; Presentation of Michael Ball to CCI-SAC on the Role of the Consultant in a Major Condominium Capital Project

Every once in a while the Canadian Condominium Institute - South Alberta Chapter will host a lunch speaker whose presentation is stellar.  This happened on March 23, 2011 when Michael Ball of Morrison Hershfield presented on the Role of the Consultant in Major Condominium Capital Projects.  Mr. Ball took those in attendance through the story of a very poorly built multi-unit condominium which had a total breakdown of the condominium's building envelope.  This multi-million dollar project exemplified the value in involving a consultant/engineer knowledgeable in the area in which the capital project is being done to avoid the ugliness and cost of capital expenditures being done improperly.  Without limitation, Mr. Ball indicated that an engineers as consultants could provide:

1. Investigative services with respect to leakage (roof/walls/below grade/windows), premature deterioration of cladding/roofing, structural capacity, warranty claims, and indoor air quality (mold);
2. Detailed design (technical specifications and drawings, best-practice design);
3. Construction services (tendering, contract administration, quality assessment and quality control)
4. Litigation support and expert witness services; and
5. Non biased third party facilitation between owners and contractors.

Without limitation, Mr. Ball noted that no project should proceed without detailed technical drawings being produced.  On its own insisting that a set of instructions - detailed technical drawings - be provided and followed creates accountability which otherwise may not exist.  Notwithstanding this plethora of support services which an engineer can provide, many condominium corporations make large capital expenditures without any assistance from an engineer/consultant.  Instead condominium corporations, to save money, sometimes rely entirely on the services of a self interested contractor and unfortunately sometimes to their detriment.


In the writer's opinion the most important distinctions between many contractors and engineers are the fact that engineers go through a rigorous education and engineers are professionals who are obliged by their professional organization, APEGGA, to act ethically.  Lawyers are similar bound to act ethically.  The Law Society of Alberta has endorsed a Code of Conduct which all lawyers must abide by in their relationships with their clients and with society at large.


Consultants without affiliation with an organization have no ethical obligation imposed upon them and may have insufficient education in the matters subject of the capital improvement.  It is imperative that condominium corporations ascertain this before proceeding with a capital project.  This is the heart of why I described contractors as potentially "self interested".  A less than knowledgeable contractor may recommend an intervention to a condominium corporation without a substantive basis for doing so simply because the contractor wants or needs the work or is ignorant.  Without an affiliation with a professional organization imposing an ethical obligation on the contractor a condominium corporation is relying entirely on the individual conscience of the contractor in respect of whether the intervention is necessary or if necessary if the contractor is sufficiently educated and skilled enough to conduct the capital improvement. 


The lesson demonstrated by Michael Ball to condominium corporations is to not be "penny wise and pound foolish" when it comes to dealing with contractors.  Obtaining the assistance of an engineer or similarly knowledgeable and skilled consultant will dramatically lessen the likelihood that condominium corporations will be taken advantage of by unscrupulous contractors.