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May 31, 2007|Article

Keeping the Lights On: Sub-Metering Contracts

Few could argue that for many condominium corporations, keeping the heat and lights on, represents a ‘core responsibility’. If performed well and without interruption, nary a thought or complaint is lodged. If performed poorly or with interruption, directors may raise the ire of the unit owners, or worse. Although no two condominiums are exactly alike, traditionally, the vast number of corporations purchase utilities, in bulk, for their uni owners. Water, gas and electricity, are commonly delivered to the condominium’s front door, metered once, and then distributed to each unit. Either monthly or quarterly the condominium corporation receives an invoice which unit owners indirectly pay, via their monthly common element fees. For some, this proposition seemed fair, as each unit owner would pay for these utilities in proportion to the size of their unit, as set out in corporation’s declaration. For others, especially the careful conservationists, this seemed unfair, as the there was little reward for one’s conservation, or penalty for another’s lack of it.

The adage, ‘change is the only constant’, recurrently applies to condominiums. In keeping with the growing worldwide concern for the environment, the Legislature for Ontario recently passed the Energy Conservation Responsibility Act. In essence, it mandates that no later than December 31 , 2010, all condominium units shall have a hydro st ‘sub-meter’. Rather than having one global meter, hydro shall be metered as it is consumed by each individual unit. The intention is that all unit owners shall be individually responsible for their specific consumption of hydro, regardless of a condominium’s particular declaration. By removing the pooling of the utility, it is intended that those who conserve are rewarded with a lower bill, while those who don’t, are not. From a legal vantage, condominium corporations shall be faced with a new level of issues as all condominiums prepare for December 31 , 2010, deadline. These issues st revolve around two points, being;

  1. the need to purchase and install the hardware, or sub-metering, and;
  2. the need to hire an administrator in order to generate and collect each unit owner’s hydro bill.

As with all things legal, the purchase of a good or service falls to the contract to ensure that the condominium corporation is both served and protected. To this end, every condominium corporation would be mindful to consider the following when considering the installation and administration of sub-meters.

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Robert Mullin