Vancouver Island Strata Owners Association PO Box 30091 -- Saanich Centre Postal Outlet Victoria, B.C. V8X 5E1 Helpline: (250) 920-0222 Website: http://visoa.bc.ca mail: firstname.lastname@example.org STRATA BULLETIN – FEBRUARY 2003 INSIDE THIS ISSUE: MESSAGE FROM YOUR PRESIDENT FEBRUARY 2003 Message from Your President First of all, I would like to extend belated, State of the Insurance Industry 2003 but no less sincere, good wishes for Harvey Williams, Board Member success and happiness to all our members and their families for 2003. You Asked Harvey Williams, Board Member Your Board has seen a very busy year just Proper Use of a Garburator ended as several initiatives were Johanna Morrow, Vice President undertaken. The most important “happening” was the very successful first Haggis Anyone? seminar held in Nanaimo on June 2, 2002. Peter Dembicki, Board Member We gained 56 new members from Nanaimo and points north. Tentatively, for 2003, we are looking for a site in Parksville for our up-Island seminar this year. When the Board has been completed, and Executive elected following the Annual General Meeting on February 16, the schedules for the year will be determined. On November 6, 2002 the Rental Owners and Managers Association invited VISOA to take part in their Trade Fair at the G.R. BOARD OF DIRECTORS Pearkes Recreation Centre here in Victoria. This was a wonderful way to introduce our President Florence Walker Association to prospective Associate and Vice-President Johanna Morrow Business members. In discussion with the Sec/Treasurer Linda Thompson Associate members of ROMA who had Webmaster/Editor Allen Walker booths at the Fair, most expressed an Board Members Peter Dembicki interest in joining us as we provide Helen Sheane education and assistance to members. Harvey Williams Two things have lead to the amendments to Harry Schmidt our bylaws which we will be discussing and voting on at the AGM. The fact that the Annual General Meeting had to be Page 2 postponed until February this year required units) has remained fairly static but the a bylaw change and the addition of the interesting change has been the increase in classification of Business Membership must the number of bare land strata corporations be recorded as an amendment. At the same that have joined or expressed an interest in time, the Board felt that other amendments joining since the seminar in September. should be made. IN ORDER TO SIMPLIFY The number of bare land stratas in YOUR REVIEW AND UNDERSTANDING Langford has been surprising to me, and OF THE PROPOSED AMENDMENTS, perhaps the most surprising, the number of COULD YOU PLEASE BRING YOUR these strata plans that are service by septic COPY OF THE VISOA BYLAWS WITH systems. This whole question brings an YOU ON SUNDAY, FEBRUARY 16. We additional government Ministry into the will have some copies available but don’t management of strata plans. want to reprint until the amendments have been completed. We are not planning to have a guest speaker at this AGM as we felt, given the Your Board has been able to prepare a number and complexity of questions budget for the coming year that does not received on a daily basis, that an open entail an increase in membership fees but question period where “anything goes” some changes in scheduling may be would provide those attending with an necessary. An Email survey of members opportunity to hear various opinions on has been sent to those members with Email solutions open to strata owners. The Board addresses and, through this mechanism, we needs you to attend this AGM as we amend hope to better understand the priories and our bylaws, propose significant changes in interests of our members at this time. We budgeting and hear suggestions for our will have a number of copies of the survey 2003 program. available at the AGM and it is hoped that those who could not be included will take the time to complete one and leave one it on your way out. In November, we, unfortunately, accepted the resignation of Cheryl Jenkins who was completing her first term as a Board member. She was an invaluable contributor to “all things financial” as we all learned the requirements of budgeting and maintaining financial records. The resignation of John SEE YOU ALL ON FEBRUARY 16, 2003 Lukaz was also accepted and the remainder AND DON’T FORGET YOUR THINKING of his term on the Board has been filled by CAPS AND IDEAS. Harry Schmidt. We will be seeking a replacement for Cheryl for a full two-year term. Our total membership (150 Individual and 221 Corporate members with a total of 5781 "Condominium Owners Organized and Volunteering to assist Strata Councils and Owners since 1973" Page 3 Vancouver Island Strata Owners Association – February 2003 STATE OF THE INSURANCE Industry Cycles INDUSTRY- 2003 The insurance Marketplace tends to cycle by Dorothy White CAIB CIP from what we call a “soft” market to or from Aon Reed Stenhouse Inc. a “hard” market. Typically, in a soft market, rates can be negotiated downward, Insurance is Global deductibles are low and insurance For the most part Insurers operate on a companies are willing to write risks that are worldwide basis with the exception of not very profitable for them. The last soft government insurance entities such as ICBC market lasted for 12 years. During a soft and some Mutuals such as Wawanesa market period, the insurers’ financial Mutual Insurance Co. Considering the statements will show that the amount paid global nature of the industry, the effect is out in claims is greater than what they have that the payment of claims anywhere in the collected in premium. In the past, their world affects policies. This is most profit came solely from investment income. beneficial as the spread of risk and premium The final 5 or 6 years of this last soft market intake is much greater to absorb the losses became more than what some companies incurred. However, it must also be realized could bear. Companies began that floods in Europe, tornadoes in the US, amalgamating, cutting staff, and closing earthquakes in Japan etc, all affect policies Branch Offices. There have been throughout the world. indications of a turn to a hard market since 1998. One or two companies even tried Re-Insurance increasing their rates hoping that others would follow, but instead, business was Even though an insurance policy will show simply moved to another insurer who would only the insurer, the insurer does not have maintain the lower rating. the capacity to keep the full amount of the risk. A portion of each risk is distributed to Throughout the year 2001, we were one or more reinsurers. At the end of each advised that the negotiations between the year, there are negotiations between the insurers and the reinsurers would, for sure, insurers and the reinsurers to determine result in a hard market for 2002. We were which types of risks they will write and to prepared for increases in the 10% to 20% what capacity of each risk they will range over most risks. The events of participate. The agreements (called September 11th of that year threw us into Treaties) are not known by the general the hard market immediately. Claims are public and usually not even known to the still not completely settled and won’t be for Broker. It is therefore the reinsurers that some time yet. The estimate of loss is $80 tend to control the rates. billion US, which makes the terrorists attacks the single largest loss in history. There are only 9 major reinsurers – 3 in That, combined with the fall in investment Germany, 2 in the USA, 1 in Switzerland, 1 income has made our marketplace not only in Bermuda and 2 in France. hard but instead, severe. Instead of fairly reasonable increases for 2002 we saw very substantial increases from 20% up to 300 & 400%. There are some risks that the Helpline - (250) 920 - 0222 Page 4 insurers back away from altogether. The there is more damage to concrete buildings end of 2002 insurers’ results are not as than wood frame buildings during an encouraging as we’d hoped. The outlook for earthquake, the deductibles are now higher 2003 is for more of the same. The general for concrete construction – it ranges from market prediction is a continuing hard 10% to 20%. This is really the first time BC market for another couple of years before it has ever experienced insurance policies will even out. It is doubtful that the cycle written with a 20% deductible. The rates back to a soft market will happen much tend to follow the same course as the before 2006. Because of the severe deductibles. Older buildings, buildings of changes taking place, it is likely that the next concrete, all take a higher earthquake soft market will be a little more cautious than premium than wood frame. what we’ve seen in the past. Capacity Issues An insurance company looks at each “risk” based on what their probable maximum loss YOU ASKED could be. It is on this basis that they decide Harvey Williams, Director what level of the risk they are able to accept. Have a question about managing your The severity of the existing marketplace has strata corporation? Ask us, we’ve had a lot substantially reduced their capacity. For of experience helping strata corporations instance, a building valued at $20,000,000 solve problems, perhaps we can help you. could be more than an insurer is able to Questions may be rephrased to conceal the handle. Insurers advise their brokers of identity of the questioner and to improve what they can write – say, for example clarity when necessary. We do not provide $10,000,000. In the current marketplace, it legal advice and our answers should not be is becoming more and more common to find construed as such. However, we may, and several insurers subscribing on one risk. often will advise you to seek legal advice. You will find all insuring subscribers listed on the policy. A reader inquires: Our expenses for building maintenance will exceed the Earthquake amount specified in our operating budget Earthquake insurance has always though to before the end of our fiscal year. We may be a catastrophic type of coverage. have a surplus in our heating budget. Can Deductibles, in the past, have fluctuated we use some of that surplus for routine from 3% to 10% on whether a soft or hard maintenance? market is present. The current hard market Questions come up frequently as to has developed a scale of deductibles whether the Strata Property Act (SPA) depending on the age of the buildings, allows the transfer of money from one construction and, of course, zone. operating fund category to another. Vancouver Island is one of the highest Judging from comments I hear from condo earthquake zones in Canada. Most of the owners, it is a common practice to do so. companies will not write earthquake at all on Only a lawyer could provide an authoritative the older buildings – age varies with the opinion on this issue, but its worth checking insurer but usually about 1945 and older. As with the SPA. Section 98 of the Act deals "Condominium Owners Organized and Volunteering to assist Strata Councils and Owners since 1973" Page 5 Vancouver Island Strata Owners Association – February 2003 with unapproved expenditures Here’s what Condominium Manual (p136) on the other it has to say: hand, does not mention subsection 98.3 leaving the reader with an impression of 98 (1) If a proposed expenditure has not much greater flexibility in exceeding budget been put forward for approval in the budget items. Mr. Mangan is a lawyer which or at an annual or special general meeting, confers authority on his opinion. However, the strata corporation may only make the he may have been speaking at a more expenditure in accordance with this section. general level, leaving out some details. (2) Subject to subsection (3), the expenditure may be made out of the So, what is our advice? Our advice is to operating fund if the expenditure, together ask a lawyer. Or you might wish to take a with all other unapproved expenditures, “don’t ask, don’t tell” approach when the whether of the same type or not, that were expense in question is relatively small. For made under this subsection in the same example, the hall drapes are filthy so why fiscal year, is not use an anticipated $200 surplus in the heating budget to clean them now? On the (a) less than the amount set out in the other hand, if the hall carpets have become bylaws, or (b) if the bylaws are silent as to unsightly, and cleaning them will cost the amount, less than $2 000 or 5% of the $2,000 it seems prudent to seek approval total contribution to the operating fund for at a general meeting. I guess in the long the current year, whichever is less. run, what you do will depend on the level of (3) The expenditure may be made out of risk, you can tolerate. the operating fund or contingency reserve fund if there are reasonable But there is a risk. Mangan (p137) cites a grounds to believe that an immediate case under the old Strata Titles Act in which expenditure is necessary to ensure a strata council authorized a large safety or prevent significant loss or expenditure, far in excess of the Act’s $500 damage, whether physical or otherwise. limit. An owner refused to pay his share and it was only after a messy legal battle (4) A bylaw setting out an amount for the that he was forced to do so. purposes of subsection (2) (a) may set out further conditions for, or limitations on, any Mangan, Mike (2001) A Condominium expenditures under that provision. Manual - A Comprehensive guide to the (5) Any expenditure under subsection (3) Strata Property Act. British Columbia Real must not exceed the minimum amount Estate Association. Vancouver. needed to ensure safety or prevent [Note: Mike Mangan’s Manual is available significant loss or damage. to Association members for $35.00. Send a (6) The strata corporation must inform cheque or money order to VISOA and the owners as soon as feasible about any Manual will be mailed (out of town) or expenditure made under subsection (3). delivered (in Greater Victoria). If ordered A literal reading of Section 98 seems to from the British Columbia Real Estate allow expenditures over the amount in an Association, the cost is $39.96.] operating budget line only in case of emergency. This limitation is contained in subsection 98.3 above. Mike Mangan’s Helpline - (250) 920 - 0222 Page 6 A member inquires: The owners from doing the equivalent of “buying the Brooklyn whom I purchased my suite had two parking Bridge”. stalls. At my insistence, the purchase agreement for the suite included the two On the other hand, if a parking stall is stalls. The strata council has now assigned registered in the land title office as Limited one of my parking stalls to guest parking. Common Property, it goes with the suite This violates my purchase agreement with whether or not it is written into the purchase the previous owner. What are my rights? agreement. (Strata Property Act s. 258) And the right of exclusive use will go to any Parking stalls are often a source of friction future owners unless the Limited Common among condo owners. It can come as a Property designation is revoked. (Mangan, surprise to an owner to learn that they have page 179) To avoid surprises when no continuing right to a specific parking stall purchasing a condo, it’s always a good idea that has been theirs nigh on to the 20 years to examine the strata plan and resolutions they have owned their suite. Or as in the filed in the land title office or, better yet, case in question, new owners move in and have your lawyer do it. discover that a parking stall (or locker) that they thought came with their strata lot is Owners and strata councils should also occupied by someone else. Unless the stall review Strata Property Act s. 164(1)(a) in question is Limited Common Property when problems arise due to the assignment (LCP), they have only “short term exclusive of parking stalls. That section, entitled use” which means that the term is actually “Preventing or remedying unfair act” reads: for only one year – renewable. On application of an owner or tenant, the Supreme Court may make any interim or Under section 76 of the Strata Property Act, final order it considers necessary to prevent the strata council has both the right and or remedy a significantly unfair (a) action or responsibility to assign “short term exclusive threatened action by, or decision of, the use” of parking stalls and lockers. “Short strata corporation, including the council, in term” means only for one year at a time. relation to the owner or the tenant,…It is Section 76, with some legalese deleted always preferable that the council act in a reads: The strata corporation may give an pro-active way where another course of owner or a tenant permission to exclusively action could conceivably result in a costly use, or a special privilege in relation court action. to…common property … for a period of not more than one year, and may…(impose) Sometimes there are distinct advantages in conditions …may renew the permission or seeking legal advice in strata property privilege and on renewal may change the disputes even though some expense may period or conditions (and)… may …cancel be incurred in doing so. Not only do … (by) giving the owner or tenant lawyers bring expertise to the table that is reasonable notice of the cancellation. lacking on the part of most condo owners but a legal opinion is more likely to find Owners who think they are buying a acceptance by all parties to the dispute, particular parking stall along with their thus settling the matter once and for all. condo, just because the seller has written it into the purchasing agreement, may be "Condominium Owners Organized and Volunteering to assist Strata Councils and Owners since 1973" Page 7 Vancouver Island Strata Owners Association – February 2003 PROPER USE OF A KITCHEN • If putting through fibrous foods such as GARBURATOR asparagus ends, celery, etc, add a small Johanna Morrow, Vice President amount at a time with a full flow of cold water. Improper use of the kitchen garburator, or • If, no matter how careful you have been, in-sink eradicator, can cause a nasty there is an offensive odour coming from surprise for the owners and their neighbours. the disposer, wearing rubber gloves to Garburators can become plugged with rotten prevent cuts, wash the bowl and blades food and kitchen waste, including liquids with a mixture of half and half white poured into the sink. This could result in a vinegar and cold water. This will back-flow of waste to sinks above and below prevent the growth of bacteria as well as the suite where the problem originated. providing a cost effective odour Here are some important tips on the retardant. correct use of your garburator to prevent this from happening to you and your neighbours: If you are in doubt if something is suitable for the garburator, play it safe and put in • Use a strong flow of COLD water and with the regular kitchen waste. keep it running for at least two minutes after the noise of grinding has stopped. This will flush all food particles down the drain line. HAGGIS ANYONE? • Always use cold water when operating Peter Dembicki, Board Member the disposer to solidify fatty and greasy wastes so that they will be chopped and As Robbie Burns Day will have just passed flushed away. when you receive this Bulletin, one of Directors, Peter Dembicki thought it would • If you wash dishes in a sink with a be appropriate if you were to review a very disposer, always check to be sure that all ‘olde’ recipe for the time honoured haggis. small objects are removed from the sudsy water before you drain the sink. THE FOLLOWING RECIPE WAS TAKEN • Run the garburator each time you put FROM THE 1861 NEW EDITION OF “MRS. food waste in it. Less expensive (or BEETON’S BOOK OF HOUSEHOLD older models) are more subject to MANAGEMENT” corrosion from the acids formed by food INGREDIENTS: waste left for longer periods. A sheep’s paunch and pluck • Do not try to grind heavier bones or put 1 lb of finely chopped beef suet through fibrous material such as ½ pint of oatmeal cornhusks or thin onion skins. For the 2 finely-chopped Spanish onions newer machines suggest grinding fine 2 tablespoons of pepper bones such as chicken ribs which will act ½ a nutmeg finely grated as an abrasive to keep food particles 1 ½ pints of good stock or gravy from adhering to the blades. Rice Juice of 1 lemon expands in the drain system and should be put in the garbage, not through the garburator. Helpline - (250) 920 - 0222 Page 8 METHOD: Did you hear about the strata council Soak the paunch for several hours in salt that called a plumber because the and water, then turn it inside out, and wash it boiler didn’t work? thoroughly in several waters. Wash the pluck, cover the liver with cold water, boil it He came – walked around the boiler for 1 ½ hours, and at the end of ¾ of an hour from left to right and right to left and add to it the heart and lights. came to the front and kicked it. He Chop half the liver; chop the remainder of handed the President a bill for the liver, the heart and lights finely, mix all $100.00. The President asked why together, add the suet, oatmeal, onions, salt $100.00 when he only kicked it. The and pepper, nutmeg, lemon juice and stock Plumber answered “$5.00 for the kick or gravy. and $95.00 for knowing where to kick it.” Turn these ingredients into the paunch, sew up the opening, taking care that sufficient Al Kemp, Exec. Director of R.O.M.A. space is left for the oatmeal to swell. If the paunch be over-full, there is a possibility of its bursting. Put the haggis into boiling water, and cook gently for about 3 hours. During the first hour it should be occasionally pricked with a needle to allow air to escape. As a rule, neither sauce nor gravy is served with the haggis. When a small dish is required, a lamb’s paunch and pluck may be substituted for those of the sheep’s. TIME: To boil the haggis, 3 hours AVERAGE COST: 2s. 9d to 3s. 9d SUFFICIENT: For 8 to 9 persons "Condominium Owners Organized and Volunteering to assist Strata Councils and Owners since 1973"