Condo Smarts: Owner can be held responsible for deductible after flood

2012-Tony-Gioventu.jpgDear Tony: We had a dreaded flood in our building caused by a defective washing machine where the pump switch failed to turn off. The tenant had started a load of laundry and left to get groceries. By the time she had returned we had to access the unit to turn the water off and five units below were damaged. She was genuinely apologetic and did not realize the risk.

 

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We have also experienced an owner eight years ago running the tub, falling asleep and wash cloth plugging the overflow until several neighbours woke the owner by pounding on the door and getting the water turned off. No doubt this is going to affect our insurance renewal come November as the emergency response and damages to drywall and flooring of each unit will likely exceed our deductible.

As owners and council members in a small high rise we have vigilantly implemented our deprecation report and contributed a significant amount to our contingency fund for planned renewals. We have no pending major upgrades until 2027 but occupant behaviour is destroying our insurance rating. If we have a substantial increase in our insurance because of this incident, are the remainder of the owners in a position to sue to the owner of this strata lot because our insurance rating is harmed?

Barry M., Vancouver

Owner and tenant education on managing and reducing the risk of claims is one of the most valuable actions for strata corporations. An annual checklist outlining the responsibility of occupants will greatly reduce errors that result in claims. While most actions are common sense, it is all too easy for residents to become complacent about daily use and function, and we routinely need reminders of our responsibilities. Appliance failures, water overflows from toilets, tubs and sinks, alterations and upgrades to taps and faucets, are frequent cause of claims.

Ultimately the owner of a strata lot is responsible for the actions of their occupants, tenants and guests. In this scenario, in addition to the failure of the defective washing machine, the failure to remain within the strata lot while the appliance was operating was the fault of the tenant. Your strata corporation is permitted under the Strata Property Act and your bylaws to seek recovery of the $100,000 deductible if a claim is filed. Occupants should never leave a strata lot if there is an appliance or fixtures in use, but we all do at some point and everyone pays the price when the failure is imminent. Running water, washing machines, dishwashers and dryers, should never be left unattended. Had the tenant been home, the water could have easily been turned off avoiding the disruption to five other owners and the insurable loss.

In a 2011 B.C. Provincial court decision, the owner was found responsible for the $25,000 deductible relating to an overflowing toilet. The eventual cause was flushing the toilet and leaving the unit before the system had cleared, resulting in a continuously flooding toilet bowl. The court found it is an owner’s responsibility to ensure that each time after flushing, the waste cleared properly from the bowl. The owner was in a position to monitor their proper working condition and to ensure on each use that nothing prevented the toilet bowl from emptying and nothing caused it to overflow. The owner owed a duty to the Strata Corporation and his neighbours to monitor the functioning of his toilet after each flush. Ironically, the amount of time to undertake such monitoring would be consistent with the amount of time it takes to wash one’s hands after using the bathroom. Lisa Mackie, a Vancouver lawyer who deals with strata insurers and liabilities, advises strata councils to closely review their bylaws to confirm they have sufficient language to pursue these novel claims. According to Lisa, “While the Strata Property Act opens the door for strata corporations to sue an owner for the deductible portion of an insurance claim if the owner is responsible for the loss or damage that gave rise to the claim, there is no automatic window of opportunity to recover increased premiums or damages that result from compromised insurance coverage. While there may be circumstances which support such a claim, it is also important to remember that a “win” in Court does not necessarily translate into actual winnings.” For those communities struggling with repeat offenders, Lisa suggests that there is likely more value in exploring other remedies the Strata Property Act has to offer, such as an eviction or forced sale.

tony@choa.bc.ca

Tony Gioventu is executive director of the Condominium Home Owners Association

Covid-19 Notice: As a precautionary measure to prevent the spread of COVID-19 CHOA staff are working remotely and our offices are temporarily closed. We understand these are challenging times for strata corporations and we are here to help. Even though CHOA advisors are working remotely we are only a phone call or email away and able to assist you with hosting meetings and notice preparation.

Tuesday Lunch & Learn Live with CHOA: CHOA is hosting a series of webinars once a week, for the next few months. Join us each Tuesday as we bring together industry experts to discuss the many issues affecting BC’s strata community. For more information visit our website at: https://www.choa.bc.ca/seminars/

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