Why these B.C. strata owners didn’t have to pay the corporation’s $5,000 deductible

A British Columbia strata unit owner is not liable for their strata corporation’s $5,000 deductible on a property claim arising from a fire, the province’s civil resolution tribunal has ruled.

The strata unit is on the fifth floor of a 22-storey building. A fire originating from their unit in 2018 caused about $300,000 in damage both to their unit and to common strata property. The strata corporation billed the owners for the $5,000 deductible on the insurance claim it made on its property policy.

But the owners don’t have to pay the deductible, CRT Member Julie Gibson ruled in The Owners, Strata Plan LMS2195 v. Leung, released Mar. 9, 2021.

That means the strata corporation cannot collect $1,000, which the corporation says the owners owe the corporation. The owners did pay $4,000 towards the corporation’s deductible in 2019, but under protest.

The CRT did not order the strata corporation to refund the $4,000 the owners already paid. But this is only because the owners did not file a counter-claim with the CRT against the strata. The strata corporation applied to the CRT to try to force the owners to pay the remaining $1,000.

Much of the March 9 ruling discussed the liability of a strata unit owner for a strata corporation’s property insurance deductible in cases where damage to common property is caused by an accident originating from the strata unit (such as a plumbing leak or fire).

Section 158(2) of the B.C. Strata Property Act stipulates that a strata corporation may sue the owner of one of the strata units to recover a deductible if the owner “is responsible for the loss or damage that gave rise to the claim.”

At the time of the 2018 fire, the owners’ strata corporation had a bylaw stipulating that if damage to common property is caused by an act or omission of an owner or guests, the strata may make a claim to its insurer to repair the damage; the unit owners would pay the strata the lesser of the insurance deductible or the repair costs.

However, the owners’ case was different from most negligence lawsuits. In their case, the strata corporation’s bylaws do not require that the unit owners’ “act or omission” be proven to be unreasonable or to be something that falls below a particular standard, wrote Gibson.

Nonetheless, the owners are not liable under the circumstances of the fire originating from their unit, Gibson found. This is because the strata corporation still has to prove on a balance of probabilities that an “act or omission” on the part of the unit owners actually caused the fire.

The owners were not living in the strata unit at the time the fire started. They claimed the occupant was in their unit without their permission.

The strata corporation suggests the fire was likely started when the occupant burned something, because the unit did not have electricity.

But the strata corporation did not prove to Gibson’s satisfaction that the occupant actually did burn something. An investigation report from the local fire department said the cause of fire was “undetermined.”

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