Canadian Underwriter

This decision on a $5,000 deductible could motivate condo corporations to change their bylaws

October 28, 2020   by David Gambrill

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A recent decision by B.C.’s Civil Resolution Tribunal (CRT) may motivate strata (condo) corporations to adjust their bylaws so that they can charge insurance policy deductibles back to their strata unit owners.

Based on the outcome of the CRT decision, if condo corporations wish to charge back insurance deductibles to unit owners, they will need to change the wording of their bylaws to eliminate language that requires the corporations to prove the unit owners were negligent in a damage loss.

At issue in The Owners, Strata Plan EPS2532 v. Komala was whether the condo corporation had to prove the unit owners were negligent in order to charge a $5,000 insurance deductible payment back to the owners.

Devi Komala and Preman S. owned Unit 607 in a B.C. strata building. On Jan. 9, 2019, water leaked from their washing machine, causing damage to two strata lots below. An owner of the one of the damaged strata lots took photographs upon noticing the leak. The photographs showed water on the floor coming from the washing machine area.

On the same day, a property maintenance technician, who worked for 18 years as a trained plumbing and heating engineer, inspected the washing machine in Suite 607. He found no plumbing-related or drainage-related sources for the leak. He offered his opinion that the leak was an “unforeseen incident” that was not due to “negligence or carelessness” by the owners.

The strata made an insurance claim to Platinum Pro-Claim for repairs to the two strata lots that were damaged when the washing machine leaked. On Feb. 12, 2019, Platinum invoiced the strata $5,000 for the deductible. Ten days later, the condo corporation informed the owners of Unit 607 that they were required to pay the deductible.

The unit’s owners argued before the Civil Resolution Tribunal that they were not negligent, and therefore they should not have to pay the insurance deductible. The CRT agreed with the owners.

In May 2019, the strata amended its bylaws, making owners liable for loss or damage where the cause originates in their strata lot, as CRT Member Julie Gibson wrote. “I find this wording does not apply to this dispute because the leak and repairs pre-date the May 2019 amendment.”

Consequently, the pre-May 2019 wording of the Condo’s Bylaw 3.23 applied. According to the CRT decisions, the previous wording of the bylaw says “an owner must indemnify the strata from any expense necessary to common property, limited common property, common assets or any strata lot caused by the owner’s act, omission, negligence or carelessness or by that of an owner’s visitors, occupants, guests, employees, contractors, agents, tenants or family members, to the extent that the expense is not reimbursed by insurance policy proceeds.”

The tribunal noted this wording is almost identical to the wording of other condo bylaws that have appeared in precedent-setting tribunal and court decisions.

“The strata did not expressly argue that Ms. Komala and Mr. S were negligent, but as noted above that is what the strata must prove,” Gibson wrote. “To prove negligence, the strata must show that the owners owed it a duty of care, they breached the standard of care, the strata sustained damage, and the damage was caused by the owners’ breach…

“Here, the only expert evidence about negligence is from [the property maintenance technician], who gave an opinion that Mr. S and Ms. Komala were not negligent. While the owners may have owed the strata a duty of care, there is no evidence the owners acted unreasonably. For these reasons, I find that the strata has not proven that the owners were negligent.”

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5 Comments » for This decision on a $5,000 deductible could motivate condo corporations to change their bylaws
  1. Eric+Lapenis says:

    Well the good news is this wording already in exists in the vast majority of strata buildings in BC with over 6 units. They need to change it back to a situation where negligence is a requirement. Buildings need to be forced to replace plumbing, install braided dishwashing lines, install water sensors and other mitigation actions to reduce water damage. We can’t continue assessing the losses to condominium owners policies or those costs will continue to rise as well.

  2. Brijanand+Goberdhan+FCIP+ACII+DipInsTT says:

    Allowing Condo Corporations anywhere to impose this form of quasi Strict Liability on strata owners is fraught with perils (pardon the pun) that the Insurance industry and Provincial authorities need to think through carefully to avoid funding dream cottages for the legal fraternity. Eric points to a greater issue; that of the maintenance responsibilities for respective elements of the property. Reducing the risk of loss is a more beneficial and productive approach as opposed to kicking the deductible can down the line.

  3. TBA says:

    Any condo corp in BC that changes the Standard Bylaws of the Strata Property Act and Change the wording to “negligence” is ridiculous.

    The act is plain and simple if just left alone. The Bylaws/Act states the Corporation CAN SUE for the “common expense” deductible if the unit owner is “RESPONSIBLE” this is the key word. Unfortunately, on advice of the legal systems they Corps are told to change their wording causing the current mess we are in right now with Insurance in BC and really all over Canada.

    If all people concerned will just read Section 9 Insurance of the Act and Regulations, then the definitions, it is extremely clear. AND the courts have made very clear who the “REPSONSIBLE” PARTY IS.

    Lawyers, Adjusters and Insurers have interpreted the Strata Property Act incorrectly and caused these issues Strata Corps face today. This started January 2000 when the Condo Act was changed to the Strata Property Act and for some reason it was interpreted that the Strata Corp is 100% responsible for damages and it went side ways from there. It was incorrect then and incorrect now.

    If everyone just reads the entire sections related to insurance and not just 1 piece (the common deductible expense), then we would not have these issues.


    Also, the “common expense” deductible is for common property (again, that is another part where everyone is interpreting this incorrectly). A Strata Lot is NOT common property (read the definitions), therefore, the Strata corps policy should never enter into a Loss UNLESS the STRUCTURE was damaged THEN, and only THEN, does the common expense deductible come into play.

    There is so much more, however in this form just impossible to explain.

    Just read the Strata Property Act in its entirety pertaining to Insurance:
    Strata Property Act – PART 9 section 149 to 162
    Strata Regulations – PART 1 Definitions
    Standard Bylaws:
    Division 1 (2)Repair and maintenance of property by owner
    Division 2 (8)Repair and maintenance of property by strata corporation

    Hope this helps

    • TBA says:

      PS, forgot to mention, if you review the cases you will also see that if the Strata’s started suing for the entire loss, they will probably win as the Strata Act reads today, however, in the last 20 years, everyone got stuck on the “common expense” deductible and cannot see past the Strata’s deductible.

      The Decisions are an easy read and will enlighten some

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