Generally, if something breaks in your strata lot – like a pipe, toilet or appliance – and it causes damage that is covered by the strata’s insurance, then you as the owner will be on the hook to pay the strata’s deductible. All the strata needs to prove is that you were ‘responsible’ for the damage. The bar to prove ‘responsibility’ is very low and more often than not you will be found responsible for any damage emanating from your suite.
The Strata Property Act is clear that a strata can sue an owner to recover the deductible portion of an insurance claim if the owner is responsible for the damage
158 (2) Subsection (1) does not limit the capacity of the strata corporation to sue an owner in order to recover the deductible portion of an insurance claim if the owner is responsible for the loss or damage that gave rise to the claim.
A recent case before the Civil Resolution Tribunal, however, shows an exception to this general rule.
In Clark v. Owners, Strata Plan LMS 3938, the owner of a condo’s washer flooded. The strata’s insurance covered the damage and the strata charged its $5000 insurance deductible to the owner. The owner made a claim to the Tribunal asking that the $5000 charge to his lot be removed. The strata filed a counterclaim, asking for an order that the owner pay the $5000.
There was no dispute on what caused the flood. A sensor in the owner’s washer malfunctioned, causing a flood that damaged the flooring in his unit. No other unit was affected.
At issue was a particular section of the strata’s by-laws. The strata had adopted a non-standard by-law that said the following:
a) Bylaw 37 (2): An owner must save the strata harmless from the expense of any maintenance, repair or replacement rendered necessary to the common property or any strata lot by an owner’s “act, omission, negligence or carelessness” to the extent such expense is not reimbursed from the proceeds of an insurance policy. Any insurance deductible paid by the strata must be considered and expense not covered by the strata and will be charged to the owner.
b) Bylaw 37 (3): An owner must repay the strata any monies the strata has paid for repairs made on the owner’s behalf which are the owner’s responsibility.
The owner argued that Bylaw 37 – which, again, is not standard – required an owner to be more than just ‘responsible’ for damage. Instead, it set a standard of negligence in order for an owner to be liable to pay the strata’s deductible. He relied on the case Strata Plan LMS 2446 v. Morrison, 2011 BCPC 519 (CanLII). The lawyer for the Strata argued that the by-laws of the strata cannot limit s. 158 of the Strata Property Act and relied on Strata Plan VR 360 v. Jauhar, 2016 BCPC 238 (CanLII).
The tribunal found that, in enacting Bylaw 37(2) “ the strata has deliberately turned its collective mind to insurance deductibles and adopted a negligence standard for the specific purpose of considering when an owner can be found responsible to pay a deductible.” The tribunal found that the owner was not negligent, despite having the responsibility to repair and maintain the washer.
As a result, the owner did not have to pay the $5000 deductible.