Tony Gioventu
Province
Dear Condo Smarts:
My wife and I own a condo at Sun Peaks Resort in Kamloops. We belong to a rental pool in the winter and rent the unit out privately in the summer.
One of our tenants recently flooded our unit and three others after forgetting she was running a bath.
The damages exceeded $40,000 and the strata deductible is $5,000.
Last week we received a bill for the strata deductible and were told that if we did not pay it in 30 days, we would be facing a lien for the amount.
We understood that strata deductible costs are a common expense. Can the strata charge us this amount?
— Steve & Judy, Edmonton
Dear Steve & Judy:
The Strata Act requires that the strata corporation must insure the common property and common assets of the corporation for full replacement value.
The deductible amount is a common expense. However, the Act does permit a strata corporation to recover the amount of a deductible if the owner, their tenant or guest is responsible for the loss.
In your case, note that the amount of a deductible cannot be liened, as it is not permitted by the Act.
A recent court decision is going to make the process of determining how claims are paid much easier: In the case of Strata Plan LMS2835 vs. Mari, where the strata was claiming a deductible amount because of a washing machine flood, the judge concluded that Section 158 of the Act allows a strata to set the same standards of an insurance deductible that would exist in a single-family home.
So, in circumstances like this, condo owners have the same legal responsiblity as single-family homeowners.
The result is important because all strata owners may be called upon to pay the deductible whenever their actions have caused the damage, even though they were not negligent. This is a critical reason why every strata owner should have their own condo insurance policy.
When you buy your condo insurance, bring a copy of the current strata policy along with you so you can ensure your coverage matches the deductible costs of the strata policy.
Tony Gioventu is executive director of the Condominium Home Owners Association. Call CHOA at 604-584-2462 or toll-free 1-877-353-2462.
© The Vancouver Province 2007
