Strata Insurance

This post sets out a string of comments and responses I have made to others on social media concerning insurance matters under the Strata Property Act (the "SPA") and Strata Property Regulation (the "SPR").

NAME Owners are responsible for routine repairs and maintenance of their unit, not for damage from the occurrence of a major peril such as water escaping into their strata lot from common property pipes or other units. The strata is responsible for that under Part 9 of the SPA, including the deductible, and pursuant to s.121 contrary bylaws are unenforceable to the extent that they contravene the SPA.

NAME Please provide a section of the Act to support your advice… this will ensure that misinformation is curbed. We are trying to build owners of strata property up with reliable knowledge. Your actions are your own, but if you advise others with false stories as if they are law and others rely on your advice to their detriment, you could be liable for the cost, so be careful.

NAME If it's water damage it makes no difference whether it is to a strata lot or common property, the strata is responsible for providing full replacement value repairs and for paying the deductible amount as a common expense.

NAME Yes, it you watch that "story" on Global News you may notice right off the bat the Anne Drewa is immediately contradicted by the first thing out of Tony Gioventu's mouth. The law is not based on story telling, it is based on statute and governing enactments, including s.121 of the SPA. Please read Part 9 of the SPA and SPR, and your strata's Use of Property bylaws.

NAME It is probably true that your strata won't put in a claim if the damage is below the deductible, but that does not mean that the claim will be on the owner's insurance. If you read Part 9 of the SPA and SPR you will see that.

What it actually means if the strata won't report or repair the damage is the duty to report the occurrence to the strata's insurance and request compensation will fall on the owner as a named insured pursuant to s.155, so that the deductible is a common expense pursuant to s.158.

I think it also means that the owner has a common sense duty to the strata to request a s.133 remedy for violation of the strata's Use of Property bylaw prohibitions against anyone causing damage to a strata lot, as well as any nuisance or interference with use and enjoyment.

 

NAME With all due respect to your advisors, if you read Part 9 of the SPA and SPR, as well as s.121 and s.133, and your strata's Use of Property bylaws, you will probably see how you were tricked.

Industries acting in conflict profit from their own wrongs by churning up legal fees and inducing owners to pay multiple premiums and deductibles on the same property for the same perils with little, if any, risk to insurers.
Common sense should tell you that there is no way that strata's would be buying residential property insurance with deductibles up to half a million dollars if penalties were in place for contravening s.158 of the SPA!

NAME Whatever the "new insurance rules" are, rules never usurp statutes. So why don't you do us a favour and cite, or better yet, copy and paste whatever rule you're referring to so that we can all see what you are talking about?

NAME The advice you are giving is not in the best interests of the strata as it contradicts ALL of the governing enactments, the SPA, the SPR, and the standard bylaws at the expense of innocent owners.

NAME This group isn't for opinions. It's damaging to those seeking valid advice. So, let's support each other by answering questions.

Can you be more specific and share exactly what the rules you refer to are?

If the insurance company has new rules, who told you that the SPA is secondary?

If reality is that insurance works differently with their own rules, is it because there are no penalties for violating the SPA, or do you think it is something else, and if so, what is that?

It doesn't matter to me if you're using a pseudonym for your surname, but what makes you say that innocent owners is a misnomer?

Do you have some reason to believe that allowing the industry to get away with insane premiums and deductibles with little, if any, risk at the expense of the owners of strata property is in the best interests of strata corporations?

Is the basic concept of insurance based on pooled risk and shared benefits, or do you think it is something else, and if so, what is that?

Why do you think that complying with the law is to the detriment of the owners at large?

Do you think that groups acting unlawfully to gang up on law abiding victims are not trying to change the rules to suit their own interests?

Why are you are putting your words in my mouth?

Are you angry about strata insurance?

How about united we stand, divided we fall? Change what we can, accept what we can't, and have the wisdom to know the difference?

It sounds to me like something makes you think that you have the power to know better than I do what I am trying to do and what my interests are, but you don't.

NAME I believe you, but I think it is important for council members to recognize the existence of the inherent conflict of interest in any agency relationship.

How does what they are telling you make sense to you?

Did you not read Part 9 of the SPA and SPR, or s.121 of the SPA? Don't you remedy matters pursuant to s.133 when your Use of Property bylaws that prohibit causing damage to other strata lots are contravened?

In that regard, I think owners are relying on you to meet the standard of care set out in s.31 (my emphasis added):

"In exercising the powers and performing the duties of the strata corporation, each council member must

(a) act honestly and in good faith with a view to THE BEST INTERESTS of the strata corporation, and

(b) exercise the care, DILIGENCE and skill of a reasonably PRUDENT person in comparable circumstances." 

NAME A conflict of interest is inherent in any agency relationship. It is simply not true that, "Any damage to your own unit goes through your own insurance, doesn't matter who's fault."

Even if the leak happened in your own unit, if it came from a pipe that is defined as common property in s.1 of the SPA, you may have been tricked.
Just be careful. Making claims based on personal experience that is not applicable, or worse, contrary to the law, can expose you to potential liability if others rely on it to their detriment.

NAME You are free to believe whatever story makes you happy. It was never my intent to upset you by sharing what the law says, so please try not to be insulting. I don't think that throwing around unfounded accusations of "utterly false" contradiction is debate.

NAME I would leave your own insurance out of any damage to your strata lot, since the strata has a statutory obligation to provide full replacement value coverage for that pursuant to s.149 of the SPA, with the deductible paid as a common expense of the strata pursuant to s.158. I have just uploaded a couple of draft letters under the Files tab to help you, assuming that no moderator has intercepted them. Please read Part 9 of the SPA and SPR. Anyone with questions or concerns can message me also.

NAME Go by the law - it's a big mistake to go by appearances.

With all due respect to CHOA and Clark Wilson's flow chart, it is important to notice that the chart refers to s.72 bylaws for routine repairs and maintenance - but in regard to major perils such as water damage s.72 bylaws are unenforceable to the extent that they contravene Part 9 of the SPA.

The strata's obligation to pay the deductible as a common expense applies to every bit of that amount to provide full replacement value coverage to strata lots and common property equally. That's the law. 

I think the arguments to the contrary are ludicrous and perverse. 

I also think that Clark Wilson's flow chart (along with its amendments) is authored anonymously for good reason. Lawyer's take an oath not to pervert the law to favour or prejudice anyone, and signing their name to that chart could expose them to a professional misconduct complaint.

NAME If you read Part 9 of the SPA and SPR as well as s.121 in regard to the validity of your strata bylaws, you will see that the strata is responsible to cover water damage to strata lots when it is below the strata's insurance deductible, no matter what the cause. 

If the strata can prove that an owner was responsible for the cause of the damage, then it can sue that owner pursuant to s.158 of the SPA to recover the deductible amount that the strata paid to repair the strata lot. But if the owner admits responsibility, then the strata can simply chargeback the deductible pursuant to s.133 based on bylaws that prohibit causing damage.

NAME Okay, great! Some confusion over damage below the deductible was attributable to your comments that say "because the damages were over the strata insurance water deductible" and this "all depends on how much damage was caused."

NAME It would be more precise to say that the strata's insurance "doesn't pay" if the cost is less than the deductible than to say that it "wouldn't kick in." A claim kicks in the moment a major peril occurs and damage is reported with a request for compensation. Whether the damage exceeds the deductible or not is determined by an insurance investigator. Whether the damage is to common property or a strata lot makes no difference in regard to the strata's insurance, both are covered equally. Don't believe the story tellers, even worse, don't become a story teller yourself. Just read the SPA.

NAME I don't think sharing the cost of the deductible as a common expense is "the same as a private policy." I think what is the same in both policies is sharing the pooled risk of liability in the event of a major peril.

NAME My advice is for you to read Part 9 of the SPA and SPR, as well as s.121 and s.133, and your strata's Use of Property bylaws prohibiting causing damage. If you do that you will have the true facts and law, not industry trickery.

NAME I think you are clouding the issue. Please read all of Part 9, not just a bit of it. The strata insures all of the strata lots shown as buildings on the strata plan for full replacement value pursuant to s.149 - as well as the fixtures in the strata lots - including drywall and floor coverings. The strata pays the deductible pursuant to s.158.