Property Biz Canada
Proactive landlords can prevent exterior structural failures
Property Biz Canada
Tue Jun 12 2012
When it comes to the potential structural failure of building exteriors, whether glass or brick, it is better to be proactive and repair problems than to allow them to fester and get worse.
“It is invariably cheaper to be proactive than reactive. The proactive landlord will carry out building condition audits regularly, professionally, and deal with the issues as they arise” said Darrell Gold, a partner and commercial real estate lawyer with Robins, Appleby and Taub. “Then the small issue does not become a big one.”
While this is no doubt sound advice, the challenges for property include determining where a structural failure might occur, quantifying the risk of it occurring and how to finance any remediation work.
1950s Apartment Buildings Showing Their Age
One of the benefits of brick as a cladding material -- typically found on many of the apartment buildings in Toronto -- is that there are many visible indications when it is structurally weakened. Deteriorating exterior walls on GTA apartments constructed in the 1950s and 1960s is ‘fairly common’ as notoriously poor construction practices from that era are taking a toll, according Adam Krehm, Principal, O'Shanter Development Company Ltd., owner and manager of over 2,500 apartment units in the city.
Referring to 25 Lascelles Boulevard in Toronto -- one of a group of five buildings built in 1955 and purchased by O’Shanter in the 1980s -- Krehm found conditions that can lead to bricks falling from an apartment exterior. In one case, a builder didn’t leave adequate space on the floor slab at the outer edge of the building to support an entire brick, leaving bricks only partially resting on the slab. Over time the concrete weakens with age, water absorption alters the strength of the materials and the brick becomes less secure. A plaster like substance was used to hide this shabby construction practice, making it hard to find many years later.
On the exterior of stairwells of apartment buildings of this era, bricks are supported on a steel shelf angle that is supposed to be bolted to the side of the building. Krehm said that at 25 Lascelles, and in nine different buildings he’s seen, the shelf angle was never attached.
Inspecting an apartment building from a swing stage every two years is the most effective way to find deteriorating building exteriors, according to Krehm. This practice would replace the existing norm - which is a visual review of a building from the ground. Use of swing stages requires the installation of wire anchors to support the device that cost in the area of $20,000 per building.
O'Shanter spent $1.5-million dollars to repair the five buildings in the complex where 25 Lascelles is located, a cost that was recouped through a rent increase. In a less affluent part of the GTA, Krehm questioned whether a similar rent increase would be feasible.
Falling Glass Incidents Prompt Change
When brick and concrete grow brittle, they tend to give us warning signs as the risk of failure grows. Signs that glass is going to break, whether in a balcony guard rail, window wall or balcony door, is much harder to see. To make an effective visual assessment would require disassembling the frame holding the glass and examining the area around the bolts, clips or other devices keeping it in place explained Graeme Scott a structural engineer at Halsall Associates who specializes in cladding issues.
Alarm over five separate and widely reported incidents that occurred in 2011 -- where panes of glass fell from newly completed condominium buildings in downtown Toront -- is prompting changes to building practices. It has also spurred legal action on the part of some condo owners.
Owners in two condominium buildings claim that the value of their units was inaccurately represented when they were purchased after their balcony views and usage was blocked by building managers following these incidents.
Class action lawsuits are typically settled out of court where blame for the incidents isn’t revealed as a condition of the resolution. If it does go to court it could take five to 10 years for a decision, explained David Taub, a litigation lawyer and partner at Robins, Appleby and Taub.
One Toronto property developer has replaced all their tempered balcony glass railing guards with laminated tempered glass in its new condos, according to Gold. When tempered glass fails, it breaks and shatters into small pieces of glass, while laminated tempered glass has a bonding material that retains the small broken bits in a sort of glass blanket.
In about eight in a 1,000 cases it is inevitable that some glass will break, according to Scott. This risk can be reduced, but not eliminated, by installing glass in a way that reduces the load on the glass. Where broken glass ends up when it falls can be predetermined to some extent by location of shelves, planters and other building features.
There is a draft report that proposes changes to the Ontario Building Code that would introduce stricter engineering specifications for glass guards for balconies, said Scott. The Canadian Standards Association (CSA) is also pursuing a higher standard for glass components in buildings, however, new standards can take five to 10 years to be developed.
Expect More Structural Failures in High Rises
With over 20,000 high rises in North America reaching the age where structural failures typically begin to happen, we can expect this to become more of an issue in the future. There is also the prospect that not all property owners will act responsibly and repair their buildings. Where the cost of remediation exceeds the appreciation in value resulting from the improvements and increases in rent are not adequate to cover the related expenses the building owner may choose to ignore a problem, suggested Darrell Gold.
With so much multi-residential stock reaching an age of failure points, the real estate industry has the choice of taking the lead on the issue or of having others do it for them. “There definitely will be more problems arising. It is my hope that the industry will self regulate, respond as they should respond, and it does not result in changes to regulations,” said Krehm.
Legal Precendent Yet To Be Determined
Regardless of what the industry does, however, the courts will increasingly be the venue where the costs associated with aging buildings and poor material choices will be settled. There are more legal tools available now, particularly class action law suits, that were not available fifteen years ago. That combined with increased public attention to this issue will result in additional legal action, explained Taub. “There is no doubt that there are going to be more of these claims.”
Legal precedent for glass falling from buildings that causes injury (an entirely different situation than the class action lawsuits) is yet to be determined. It isn’t clear whether an area of law where property owners are deemed to be ‘negligent’ or laws about ‘strict liability’ will come into play. Strict liability where someone can be held responsible even if they are not to blame for an incident, is more commonly applied in real estate, according to Taub.
Taub expects that it will be many years before there are conclusive legal decisions applicable to the structural failure of building exteriors.