For insurance purposes, if it’s not managed as a strata, it’s still a strata: Tribunal

The owner of a strata lot in a duplex that was not managed as a strata — for example, there was no strata board of directors, annual board meetings, etc. – must nevertheless pay for her half of the strata corporation’s insurance, the B.C. Civil Resolution Tribunal has found.

Anna Lamb, who co-owns one of two strata lots in the duplex, disputed that the duplex was in fact a strata corporation, since it was not managed as one. On that basis, she refused to pay her half of the cost of the insurance for her strata corporation, which was obtained by the other strata lot owner in the duplex, Charmaine Hornseth.

Hornseth purchased a one-year commercial liability insurance policy on behalf of the strata in September 2018. Lamb refused to pay for half that cost, so Hornseth obtained a July 2019 CRT order, by default, requiring Lamb to pay for half the strata’s insurance cost. Lamb reimbursed Hornseth for the strata’s 2018-19 insurance costs in August 2019, but again refused to pay her half of the strata corporation’s insurance costs for 2019-20.

This time, Lamb said she and Hornseth could each obtain their own insurance policies to insure their respective halves of the duplex. In fact, Lamb had obtained homeowner’s insurance from August 2019 to August 2020 for her half of the duplex.

Nevertheless, Hornseth obtained insurance for the strata corporation from September 2019 to September 2020 for a total of $1,129.80, paid monthly over the course of 12 months. She sought a CRT order for $564.90, which was Lamb’s share of the strata corporation’s insurance.

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The CRT found that Lamb’s homeowner’s insurance policy did not replace the strata’s need to obtain its own insurance coverage.

“Ms. Lamb says that, although the duplex is on a strata lot, it is not managed as a strata and there is no strata corporation,” the CRT said in its decision. “It is undisputed the parties have never held any strata meetings. However, as explained below, I find there is a strata corporation.

“The strata plan was deposited in the Land Title Office in September 1993. According to Section 2 of the Strata Property Act (SPA), the strata corporation was established when the strata plan was deposited. Even though the owners of this duplex have not managed their homes as strata lots, the strata does exist, and it must follow the SPA.”

In this particular situation, it was undisputed that the strata has not filed any bylaws in the Land Title Office. In that case, the CRT found, under section 120(1) of the SPA and Strata Property Regulation and its regulations, the strata’s bylaws essentially default to the standard bylaws.

Lamb said it was not fair that Hornseth could be the one making the insurance decisions on behalf of the strata without her input. But the CRT noted that under Section 150 of the SPA, the strata must also carry liability insurance. Since Lamb refused to pay her share, it was within Hornseth’s rights to make sure the strata corporation’s insurance policy was in place.

“Strata approval in a duplex means that both parties need to agree,” the CRT noted in its decision. “This is because both parties make up the strata council under standard bylaw 9(2), and each owner has one vote under section 29 of the SPA. So, going forward, it is up to Ms. Lamb and CH to jointly decide on the type and cost of strata property insurance, so long as the insurance coverage meets the SPA requirements set out above.

“I encourage Ms. Lamb and Ms. Hornseth to follow the SPA and standard bylaws in the future, which includes holding strata meetings, paying strata fees, and setting up an operating fund for the strata’s common expenses, such as insurance premiums.”

Feature photo courtesy of iStock.ca/spasmik