Reserve Funds

September 9, 2024 Published by Toronto and Area Chapter - By Lisa Kay, Bharat Kapoor

Too Many Contractors in the Kitchen Can Spoil the Broth

From the Summer 2024 issue of CCI Toronto Condovoice Magazine.

Executing and coordinating projects within a building can be an intricate endeavor. The myriad components of a building will inevitably require repair, some of which can be anticipated with relative ease by utilizing the Reserve Fund Study as a guideline. However, others may emerge unexpectedly or from gradually evolving issues not yet identified in the Reserve Fund Study.

Many of these projects are independent of one another, allowing for easy prioritization and simultaneous execution if they happen in different areas of the building. Conversely, certain projects require coordination due to their interdependencies or because they are situated in the same location. Projects within the same area cannot necessarily be executed concurrently unless there are exceptional circumstances and both projects are managed by a single responsible entity, such as a constructor or general contractor – or else the broth may be spoiled.

Imagine a condominium embarking on a corridor refurbishment project, which includes replacing the carpet, updating wall coverings, and painting all surfaces. A general contractor has been hired to execute this project, and the work is well underway. Midway through this renovation, the condo board decides to undertake additional work outside the contractor’s original scope. This new work may include installing new suite door hardware, motion sensor lighting, or security cameras, and they aim to have it completed concurrently with the ongoing refurbishment.

The rationale behind this decision may be driven by a desire to save money by engaging a specialized company directly or simply the realization that, given the current renovation, it is an opportune moment to incorporate these additional upgrades.

This scenario can present some challenges:

1. Responsibility for Damages: If damage occurs to either party’s work, it may not be clear who is responsible.
2. Health and Safety Concerns: If someone gets injured while both contractors are working in the same area, determining liability can become complex.
3. Project Delays: Two contractors working simultaneously in the same area can create unexpected delays for each other, potentially costing additional time and money.
4. Compromised Project Notice: The clarity and communication of the project scope and progress may be compromised.

Critical thinking suggests that it is best to execute work in the same area simultaneously under one contract to avoid these potential issues. Why expose yourself to unnecessary complications?

A general contractor controls the project and is ultimately responsible for the health and safety of all workers. The general contractor must ensure that all workers on the project comply with the relevant Act and its regulations.

When a condominium hires one contractor to manage all aspects of a project, that contractor is considered the “constructor” and often referred to as the general contractor. In this role, the general contractor may subcontract some or all of the work to another party while maintaining overall responsibility for the project as long as the condominium contracts solely with them. If the condominium, acting as an employer, assigns its workers to the same project as the general contractor without the latter’s knowledge or agreement, the condominium may assume the role of constructor. However, if the general contractor agrees to use the owner’s workers and directs their work, they remain the constructor.

In summary, consolidating work under one general contractor is advisable to ensure clear accountability, streamline project management, and maintain compliance with municipal, health and safety regulations. You do not want a situation in your building where nobody feels responsible because every party can blame the other party.

Lisa Kay has been in the condo industry for over 23 years. Initially on the financial side 2001 – 2010 , providing loans to condominium corporations and now on the construction side (2010 -2024). She is the principal of KayCondo GC which specializes in condominium common area refurbishments. She has sat on the Board of CCI and on the ACMO Associates committee for over 10 years and was also on the board of her own condo for 6 years. Her diverse experience in the industry provides well rounded knowledge the workings of condominiums and the duties and responsibilities of their Boards.

Bharat Kapoor is a senior associate at Horlick Condominium Law PC. He excels in advocating for condominium corporations with a strong emphasis on alternative dispute resolution. Fluent in English, Hindi and proficient in Punjabi, Bharat adeptly navigates legal matters from mediation to court applications, contract reviews, enforcement of governing documents and the recovery of outstanding common expenses. His practice encompasses both solicitor and barrister work, ensuring comprehensive legal support for his clients.