Part 36 published on 01/12/11
Owner responsible for damage to unit improvement. Owner’s insurer could not assert subrogated claim against corporation
The plaintiff owned a unit in this high-rise condominium. A pipe inside the plaintiff’s dishwasher broke, causing water damage to the owner’s hardwood floor. The owner’s insurer repaired the damage, and then sought to recover the costs from the condominium corporation.
The Court dismissed the claim for the following reasons:
- The Declaration said that the owner’s insurance had to include a waiver of subrogation against the corporation. This prevented the owner’s insurer from asserting the subrogated claim (based on alleged rights of the owner).
- According to the Declaration, the owner was obligated to repair the unit. Therefore, Section 89(5) of the Condominium Act did not apply and the owner was obligated to repair the unit including all improvements.
Note that the Court also said that the hardwood floor could be considered to be an improvement even in the absence of a by-law establishing standard unit descriptions.
[Editorial Note: In my respectful view, there is an important omission in the Court’s reasoning. The applicable section of the Condominium Act, 1998is Section 99 (not section 89). Under Section 99, the condominium corporation is obligated to arrange insurance covering the common elements and the units (not including unit improvements). According to Section 99(5), the question of what constitutes an improvement to a unit shall be determined by reference to the standard unit description. In this case, there was no standard unit description. Therefore, the unit insurer’s argument would be that the condominium corporation was obligated to arrange insurance covering the damage (quite separate and apart from questions about responsibility for the repair). In other words, the owner may have been responsible for the repair, but the owner was entitled to have the corporation’s insurer cover the repair on the owner’s behalf (subject to any deductible on the corporation’s insurance). Responsibility for the deductible portion of the loss would then require separate consideration.
Unfortunately, there was no consideration of section 99 in the decision.]