26/11/2020 – Jurisdiction British Columbia
Part 72 published on 01/12/2020
Strata Corporation took reasonable steps to address water penetration. However, the Corporation’s refusal to make an insurance claim (for water damage) was significantly unfair to the owners.
The owners had suffered damage to their unit due to water penetration. The Tribunal found that the strata corporation was responsible to repair and maintain the exterior, but that the strata corporation had acted reasonably in addressing the water ingress. The Tribunal referred to past Court decisions, in noting that “the strata is not an insurer”. The Tribunal said:
The strata has no liability to pay for an owner’s expenses that are the owner’s responsibility under the bylaws, unless the strata has been negligent in repairing and maintaining common property.
Therefore, the Tribunal found that the strata corporation was not liable for the interior damage.
However: The interior damage was also “insured damage”, and appeared to be “very close to the deductible amount” ($15,000) under the strata corporation’s insurance policy. The owner was responsible for the deductible portion of the insured loss, and the corporation decided not to make an insurance claim. The Tribunal held that this was “significantly unfair” to the owners. The Tribunal said:
Not to make a claim would result in the applicants being denied insurance coverage they are entitled to under the (Strata Property Act), which would have a significant impact on the applicants’ financial responsibilities. The difference to the applicants being a $15,000 or more expense to repair (their strata lot) versus their proportionate share of a $15,000 deductible paid by the strata.
The Tribunal ordered the strata corporation to make an insurance claim in relation to the water damage.
Finally, the Tribunal declined to resolve the owner’s claims of harassment, finding that those claims fell outside the Tribunal’s jurisdiction.
Editorial Note: I’m confused by the Tribunal’s decision in relation to an insurance claim. It seems to me that there would be a deductible loss whether or not the insured decides to make an insurance claim. Furthermore: If the actual damage exceeds the deductible, the strata corporation should nevertheless have the right to avoid an insurance claim, as long as the corporation pays (to the owner) any amount that would be available from the insurer (if a claim were made).
Varshney v. The Owners, Strata Plan BCS 1677