Legal

April 15, 2024 Published by Golden Horseshoe Chapter - By Patricia Elia

CCDC Contract Questions

From the Volume 19, Spring 2024 issue of the CCI GHC Condo News Magazine

Q: What is the CCDC contract?

A: CCDC refers to the “Canadian Construction Documents Committee” (“CCDC”). This Committee was created nationally to be responsible for the development, production, and review of standardized construction contracts. It is comprised of volunteers from across the country in different sectors of the construction industry and includes public sector owners, private sector owners, and members from the Canadian Construction Association, The Association of Consulting Engineers of Canada and Canadian Bar Association members. The CCDC creates a baseline construction contract for certain types of construction contracts. The objective of the CCDC was to create reasonable fair standards for all the parties involved in the contract. What is great about a CCDC in the condominium industry is that it is a time and money saver.

Q: What are the different types of CCDC contracts?

A: For a full listing of condominium CCDC contracts, check out the website www.ccdc.org, which will provide you with a range of different types of contracts. In the condominium industry, we focus on the CCDC 2, which is a stipulated price contract or a fixed price contract (updated as of 2020); and the CCDC 4, which is a unit price contract (updated as of 2023); the CCDC 14, which is a design-build stipulated price contract and the CCDC 41, which deals with insurance requirements. The type of project will dictate the best type of CCDC to use. CCDC 2s are often the best for condominiums, in most projects because condominium Corporations want to be cost-effective and they want to know the cost upfront. There are other ways to approach projects and it would be wise to speak with your consultants to determine the best methodology for contracting. Each has various pros and cons, and they should be explored with legal counsel.

Q: What situations should a condominium use a CCDC in?

A: The CCDC should be used for any major construction project at your condominium Corporation. In my opinion, anything over $50,000 that has implications on the assets of the Corporation and requires a consultant, should have a CCDC. Why? Because the CCDC is a comprehensive risk management strategy. The CCDC addresses topics that will still be relevant even for a smaller project. For example, health and safety, indemnities, or insurance. Further, these are things that a condominium Corporation would not want to have its lawyers draft because it would be cost-ineffective. Accordingly, I would recommend you talk to your consultant to get feedback on whether a CCDC should be used in the context of the project. For anything over $100,000, without a doubt, a CCDC should be considered the baseline. I have heard of condominiums entering into large contracts greater than $100,000 on a purchase order. This is completely unacceptable in my opinion, and I think would be a breach in industry standards and may be a breach of a director’s duty, under Section 37 of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”). So please get the right advice on when to use the CCDC.

Q: What happens if a project goes wrong and there is no CCDC or contract to fall back on?

A: Good luck and get ready for legal proceedings and the bills associated with the same!!! The Corporation is going to be subject to whatever the common law position is of the day. The value of a good contract is that it creates clear obligations, processes, and delineates risks and obligations for the parties. When we work with CCDCs, we are focusing on the interests of our condominium Corporation and protecting its interests. This is important to appreciate. Who is protecting the interests of the condominium Corporation in the contract? It is the condominium lawyer. Other parties may have different interests regarding costs.

Accordingly, to bring balance to the situation, it is important that the Board also allow CCDCs to be reviewed by legal counsel, so that it can be vetted for risk issues and that Supplementary Conditions may be added. Supplementary Conditions modify the terms of the contract but are extremely valuable to customizing the Agreement to the actual transaction and the scope and nature of the project’s work. One special consideration is that, unlike most construction sites, a condominium is full of people, so we must address noise, dirt, debris and interferences.

Q: Who should prepare the CCDC contract?

A: We prefer if the Consultant prepares the CCDC draft initially. Then this will go to the Contractor for their feedback and then it should go to legal counsel for the Corporation. We have seen in the industry, and we are not surprised that sometimes the Supplementary Conditions or changes made to the CCDC, do not always reflect the best interests of the Corporation or have to be negotiated slightly. This is important because a condominium is a non-for-profit organization at the end of the day, and we want as little risk of falling onto the Owner as much as possible. I am always impressed with the evolution of the Supplementary Conditions, they are not static, especially with changes to the Construction Act, R.S.O. 1990, c. C. 30. We find that consultants are very proactive in their thinking and in trying to address issues of risks. It is always great to have another set of eyes to address these as well.

Patricia Elia is a senior lawyer with Elia Associates and has practiced law for over 25 years in the areas of condominium law and corporate law, in large and medium firms and the boutique specialty law firm of Elia Associates. Patricia is intrigued by the interplay of economics, the law and critical thinking models in condominiums and she likes to understand people. As a trained mediator, she understands the value of early and creative dispute resolution opportunities. As an active industry participant, she believes that the sharing of knowledge has the potential to empower Boards of Directors. Patricia is passionate about the condominium industry because of the important role condominiums play in the lives of real people.