Part 52 published on 01/11/15
Owner responsible for damage due to fire caused by owner’s tenant
The plaintiff owned a unit in the strata corporation. Damage was caused from a fire in the unit. The fire resulted from an illegal drug laboratory, operated by the owner’s tenant.
The strata corporation’s insurance covered damage to the unit and common property, but subject to a $50,000 deductible. The Court held that the damage fell within the deductible, and that the owner was responsible for the deductible loss under the corporation’s by-laws. The Court also said that the corporation was not obligated to carry out the necessary repairs and to then seek recovery of the deductible portion of the loss from the owner. The Court said that it was reasonable for the corporation to insist that the owner pay the $50,000 deductible in advance, before undertaking any repairs, or otherwise to leave the repairs up to the owner. The Court said:
In my view, s. 158 does not require the Strata to pay the amount of the deductible.
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In this case the damage clearly was caused by Ms. Louie’s tenant and occurred to her Unit. I find that the Strata did not breach the SPA (Strata Property Act) by not paying the deductible and by not commencing work on the unit in this case.
I conclude the Strata had the right to insist Ms. Louie pay for remediation up to the amount of the deductible and that given what was known at the time about the cost of remediation the demand for payment of the full $50,000 was a reasonable one.
The Court also held that the owner had no claim for lost rent, because the failure to reinstate the unit was the owner’s fault. The Court said: “The plaintiff has had years to mitigate her loss but has chosen to leave the Unit in a damaged condition. In my view this conduct falls well short of her legal obligation to take reasonable steps to avoid her losses.”
Finally, the Court granted the strata corporation’s claim for $4,292.79 (claimed against the owner) for costs incurred by the corporation for investigation of the fire and for remediation of some of the damage.