Report on Insurance Issues for Stratas...Alex Longson (Jul. 2016–present) (Senior Compliance...

Report onInsurance Issues for Stratas

A report published as part of the Strata Property Law Project—Phase Two

Report on Insurance Issues

for Stratas

A Report Prepared for the British Columbia Law Institute by the Members of the

Strata Property Law (Phase Two) Project Committee

BCLI Report no. 86 March 2019

Disclaimer Theinformationandcommentaryinthispublicationisnotofferedaslegaladvice.Itrefersonlytothelawatthetimeofpubli-cation,andthelawmayhavesincechanged.BCLIdoesnotundertaketocontinuallyupdateorreviseeachofitspublicationstoreflectpost-publicationchangesinthelaw.TheBritishColumbiaLawInstituteanditsdivision,theCanadianCentreforElderLaw,disclaimanyandallresponsibilityfordamageorlossofanynaturewhatsoeverthatanypersonorentitymayincurasaresultofrelyinguponinformationorcom-mentaryinthispublication.Youshouldnotrelyoninformationinthispublicationindealingwithanactuallegalproblemthataffectsyouoranyoneelse.Instead,youshouldobtainadvicefromaqualifiedlegalprofessionalconcerningtheparticularcircumstancesofyoursituation.______________________________________________©2019BritishColumbiaLawInstituteTheBritishColumbiaLawInstituteclaimscopyrightinthispublication.Youmaycopy,download,distribute,display,andoth-erwisedealfreelywiththispublication,butonlyifyoucomplywiththefollowingconditions:

1. Youmustacknowledgethesourceofthispublication;

2. Youmaynotmodifythispublicationoranyportionofit;

3. YoumustnotusethispublicationforanycommercialpurposewithoutthepriorwrittenpermissionoftheBritishCo-lumbiaLawInstitute.

CoverphotographbySpencerWatsononUnsplash.CoverdesignbyShaunaNicholson.ThesematerialscontaininformationthathasbeenderivedfrominformationoriginallymadeavailablebytheProvinceofBrit-ishColumbiaat:http://www.bclaws.ca/andthisinformationisbeingusedinaccordancewiththeQueen’sPrinterLicense—BritishColumbiaavailableat:http://www.bclaws.ca/standards/2014/QP-License_1.0.html.Theyhavenot,however,beenproducedinaffiliationwith,orwiththeendorsementof,theProvinceofBritishColumbiaandTHESEMATERIALSARENOTANOFFICIALVERSION.

British Columbia Law Institute 1822EastMall,UniversityofBritishColumbia,Vancouver,BC,CanadaV6T1Z1

Voice:(604)822-0142Fax:(604)822-0144E-mail:[email protected]:https://www.bcli.org

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TheBritishColumbiaLawInstitutewascreatedin1997byincorporationundertheprovin-cialSocietyAct.Itsstrategicmissionistobealeaderinlawreformbycarryingout:

• thebestinscholarlylawreformresearchandwriting;and

• thebestinoutreachrelatingtolawreform.

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ThemembersoftheInstituteare:

ThomasL.Spraggs(Chair) AndreaL.Rolls(Vice-chair)MargaretH.Mason,QC(Treasurer) OliverA.Fleck(Secretary)Dr.ElizabethAdjin-Tettey Hon.MarionJ.AllanEmilyL.Clough Dr.TeshW.DagneJenniferA.Davenport MathewP.GoodTejasB.V.Madhur DylanT.MazurSusanM.Mercer BrentB.OlthuisLisaA.Peters,QC Dr.JanisP.Sarra

ThemembersemeritusoftheInstituteare:

Prof.JoostBlom,QC ArthurL.Close,QCProf.RobertG.Howell D.PeterRamsay,QC

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ThisprojectwasmadepossiblewiththesustainingfinancialsupportoftheLawFoundationofBritishColumbiaandtheMinistryofJusticeforBritishColumbia.TheInstitutegratefully

acknowledgesthesupportoftheLawFoundationandtheMinistryforitswork.

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Introductory Note

Report on Insurance Issues for Stratas Insuranceisofvitalimportanceforallpropertyowners.Thispointisequallyvalidforownersofsingle-familyhomesandownersofstratalots.Butstrata-propertyownersfacecomplexissuesthatotherownersdon’tface.Managingtheseissuesisoneofthemajortasksofstrata-propertylaw.Thisreportrecommendswaystoenhancethelegalframeworkgoverninginsuranceissuesforstrataproperties.Thereportrecommendsexpandingtheinsuranceman-dateonstratacorporationstoincludedirectors-and-officersinsurance,anewap-proachtodealingwithliabilitytopayastratacorporation’sinsurancedeductibleincaseswhereanownerisresponsibleforaclaim,andenhancedreportingandinfor-mation-sharingprovisions.Thereportalsocontainsdraftlegislationandregula-tions,whichillustratehowthereport’srecommendationscouldbeimplemented.ThisreportisthefourthreportpublishedinBCLI’sStrataPropertyLawProject—PhaseTwo.BCLI’sworkonstrata-propertylawreachesbacktophaseoneofthisproject,whichconcludedin2012withrecommendationstoexamineselectedareasofstrata-propertylawandtomakerecommendationsforlegislativereformthatwillsupportthenextgenerationoftheStrataPropertyAct.OnbehalfoftheboardofdirectorsoftheBritishColumbiaLawInstitute,IwanttothankthemembersoftheStrataPropertyLaw(PhaseTwo)Committeefortheirhardworkonthisreportandtheirongoingcommitmenttotheproject.BCLIfullysupportstheirrecommendationsandendorsesthisreport.

ThomasL.SpraggsChair,BritishColumbiaLawInstituteMarch2019

Strata Property Law (Phase Two) Project Committee

TheStrataPropertyLaw(PhaseTwo)ProjectCommitteewasformedinfall2013.Thisvol-unteerprojectcommitteeismadeupofleadingexpertsinstrata-propertylawandpracticeinBritishColumbia.Thecommittee’smandateistoassistBCLIindevelopingrecommenda-tionstoreformstrata-propertylawintheareasselectedforstudyinthisphase-twoproject.Theserecommendationswillbesetoutinfinalreportsforeacharea.Themembersofthecommitteeare:

PatrickWilliams—chair (Partner,ClarkWilsonLLP)

VeronicaBarlee(Jul.2014–present) (SeniorPolicyAdvisor,HousingPolicyBranch,MinistryofNaturalGasDevelop-mentandResponsibleforHousing)

LarryButtress(Oct.2013–Jun.2016) (DeputyExecutiveOfficer,RealEstateCouncilofBritishColumbia)

GarthCambrey (RealEstateInstituteofBritishColumbia)

TonyGioventu (ExecutiveDirector,CondominiumHomeOwnersAssociation)

IanHolt(Oct.2016–Apr.2017) (Realtor,Re/MaxRealEstateServices)

TimJowett (SeniorManager,E-BusinessandDeputyRegistrar,LandTitleandSurveyAuthority)

AlexLongson(Jul.2016–present) (SeniorComplianceOfficer,RealEstateCouncilofBritishColumbia)

JudithMatheson(Oct.2013–Oct.2016) (Realtor,ColdwellBankerPremierRealty)

ElaineMcCormack (Partner,WilsonMcCormackLawGroup)

SusanMercer(Sep.2016–present) (NotaryPublic)

DougPage(Oct.2013–Jul.2014) (DirectorofLegislation,HousingPolicyBranch,MinistryofNaturalGasDevelop-mentandResponsibleforHousing)

DavidParkin (AssistantCitySurveyor,CityofVancouver)

AllenRegan (Vice-President,BaysidePropertyServicesLtd.)

GarrettRobinson(Apr.2017–present) (Realtor,Re/MaxCrestRealty—Westside)

StanleyRule(Oct.2013–Sep.2016) (Lawyer,SabeyRuleLLP)

SandyWagner (PresidentoftheBoardofDirectors,Van-couverIslandStrataOwnersAssociation)

EdWilson (Partner,LawsonLundellLLP)

KevinZakreski(stafflawyer,BritishColumbiaLawInstitute)istheprojectmanager.

Formoreinformation,visitusontheWorldWideWebat:https://www.bcli.org/project/strata-property-law-phase-two

Report on Insurance Issues for Stratas

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TABLE OF CONTENTS Acknowledgements................................................................................................................xiExecutiveSummary.............................................................................................................xiii

Chapter1.Introduction.........................................................................................................1AnOverviewofInsuranceandStrataProperties.........................................................................................1AbouttheStrataPropertyLawProject—PhaseTwo.................................................................................3ThePhase-TwoProject’sSupporters................................................................................................................4TheStrataPropertyLaw(PhaseTwo)ProjectCommittee......................................................................5ConsultationPaperonInsuranceIssuesforStratas...................................................................................5AnOverviewofthisReport....................................................................................................................................5Chapter2.Strata-PropertyBasics......................................................................................7Introduction.................................................................................................................................................................7TheEssentialElementsofaStrataProperty..................................................................................................7TheThreeGenerationsofStrata-PropertyLegislation.............................................................................8

Introduction......................................................................................................................................................................8StrataTitlesAct1966–74............................................................................................................................................8StrataTitlesAct/CondominiumAct1974–2000...............................................................................................8StrataPropertyAct2000–present...........................................................................................................................9

TheOwner-Developer...........................................................................................................................................10CreationofaStrataPropertybyDepositofaStrataPlan......................................................................10KindsofStrataPlans..............................................................................................................................................11StrataLots..................................................................................................................................................................11CommonProperty,LimitedCommonProperty,andCommonAssets.............................................12

Commonproperty.........................................................................................................................................................12Limitedcommonproperty........................................................................................................................................13Commonassets..............................................................................................................................................................15

TheStrataCorporation.........................................................................................................................................15TheFundamentalsofStrata-CorporationGovernance...........................................................................16

Bylawsandrules...........................................................................................................................................................16Annualgeneralmeetingsandspecialgeneralmeetings..............................................................................17Thestratacouncil..........................................................................................................................................................19Budgetsandfunds........................................................................................................................................................19

CommonExpenses..................................................................................................................................................20UnitEntitlement......................................................................................................................................................21

Whatisunitentitlementandhowisitused?....................................................................................................21Howisunitentitlementdetermined?..................................................................................................................21Whenisunitentitlementdeterminedandwhereisitfound?...................................................................23

TheDutytoRepairandMaintainProperty.................................................................................................23Commonpropertyandcommonassets...............................................................................................................23Stratalots..........................................................................................................................................................................25


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DisputeResolutionandtheCivilResolutionTribunal............................................................................26Chapter3.InsuranceandStrataProperties.................................................................27Introduction...............................................................................................................................................................27BackgroundonInsuranceandInsuranceLaw...........................................................................................27

Insurancedefined.........................................................................................................................................................27Distinguishingprinciplesofinsurancelaw........................................................................................................28

Strata-PropertyLegislationandInsurance..................................................................................................29Whydoesstrata-propertylegislationdealwithinsuranceandhowdoesittacklethesubject?29

LegislativeHistoryinBritishColumbia.........................................................................................................32Evolutionoflegislationthroughthreegenerationsofstrata-propertylegislation..........................32First-generationact:1966–74.................................................................................................................................32Second-generationact:1974–2000......................................................................................................................33Third-generationact:2000–present....................................................................................................................33

TheStrataPropertyAct’sProvisionsonInsurance..................................................................................33Propertyinsurancerequiredforstratacorporation.....................................................................................33

Scopeofrequirement....................................................................................................................................33Definitionof“fixtures”..................................................................................................................................34Fullreplacementvalue..................................................................................................................................36Majorperils........................................................................................................................................................36

Liabilityinsurancerequiredforstratacorporation.......................................................................................37Descriptionofthelegislation.....................................................................................................................37

Otherinsuranceastratacorporationmayobtain..........................................................................................38Descriptionofthelegislation.....................................................................................................................38

Stratacorporationhasaninsurableinterestinpropertyitmustinsure.............................................39Descriptionofthelegislation.....................................................................................................................39

Stratacorporationmustreviewandreportoninsurancecoverage......................................................41Descriptionofthelegislation.....................................................................................................................41

Namedinsuredsincludestratacorporation,owners,tenants,andoccupiers...................................41Descriptionofthelegislation.....................................................................................................................41Clearidentificationofbroadgroupofnamedinsureds..................................................................42Theno-subrogationrule...............................................................................................................................42

Paymentandapplicationofinsurancemoney.................................................................................................44Descriptionofthelegislation.....................................................................................................................44

Deductible........................................................................................................................................................................45Insurancedeductibleischaracterizedasacommonexpense.....................................................45Stratacorporationmayrecoverdeductiblepaymentfromresponsibleowner..................46Stratacorporationapprovalnotrequiredforpaymentofdeductible.....................................48

Owner’sinsurance........................................................................................................................................................48Descriptionofthelegislation.....................................................................................................................48Ownersinbare-landstrataplans.............................................................................................................49

Contribution....................................................................................................................................................................51Descriptionofthelegislation.....................................................................................................................51

Chapter4.IssuesforReform.............................................................................................53Introduction...............................................................................................................................................................53IssuesforReform—TheInsuranceMandate...............................................................................................53


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ShouldtheStrataPropertyActrequirestratacorporationstoobtaindirectors-and-officersinsurance?..............................................................................................................................................................54Briefdescriptionoftheissue.....................................................................................................................54Discussionofoptionsforreform..............................................................................................................55Thecommittee’srecommendationforreform...................................................................................56

Whatamountofcoverageshouldastratacorporationberequiredtoobtainforitsmandateddirectors-and-officersinsurance?...............................................................................................................57Briefdescriptionoftheissue.....................................................................................................................57Discussionofoptionsforreform..............................................................................................................57Thecommittee’srecommendationforreform...................................................................................57

Shouldthedefinitionof“majorperils”intheStrataPropertyRegulationbeamendedtoincludeearthquakes?.........................................................................................................................................................58Briefdescriptionoftheissue.....................................................................................................................58Discussionofoptionsforreform..............................................................................................................58Thecommittee’srecommendationforreform...................................................................................59

Shouldthedefinitionof“majorperils”intheStrataPropertyRegulationbeamendedtoincludeoverlandflooding?..............................................................................................................................................60Briefdescriptionoftheissue.....................................................................................................................60Discussionofoptionsforreform..............................................................................................................61Thecommittee’srecommendationforreform...................................................................................61

IssuesforReform—InsuranceDeductibles.................................................................................................61Introduction....................................................................................................................................................................61Noteongovernanceissuesforstratas.................................................................................................................63ShouldtheStrataPropertyActexpresslyassignresponsibilityforaninsurancedeductibletoa

responsibleowner?............................................................................................................................................64Briefdescriptionoftheissue.....................................................................................................................64Discussionofoptionsforreform..............................................................................................................65Thecommittee’srecommendationforreform...................................................................................67

ShouldtheStrataPropertyActrequirestrata-lotownerstohaveinsurancethatcoverspaymentofadeductibleunderastrata-corporationpolicy?..........................................................68Briefdescriptionoftheissue.....................................................................................................................68Discussionofoptionsforreform..............................................................................................................68Thecommittee’srecommendationforreform...................................................................................69

IssuesforReform—NamedInsureds.............................................................................................................69Shouldsection155oftheStrataPropertyActbeamended?.....................................................................71

Briefdescriptionoftheissue.....................................................................................................................71Discussionofoptionsforreform..............................................................................................................71Thecommittee’srecommendationforreform...................................................................................72

IssuesforReform—ReportingandAdministration.................................................................................72ShouldtheStrataPropertyActrequirestratacorporationstoobtainanappraisalforthe

purposeofdeterminingadequacyofproperty-insurancecoverage?..........................................73Briefdescriptionoftheissue.....................................................................................................................73Discussionofoptionsforreform..............................................................................................................73Thecommittee’srecommendationforreform...................................................................................73

Howfrequentlyshouldanappraisalforthepurposeofdeterminingadequacyofproperty-insurancecoverageberequiredtobecarriedout?.............................................................................74Briefdescriptionoftheissue.....................................................................................................................74Discussionofoptionsforreform..............................................................................................................74Thecommittee’srecommendationforreform...................................................................................74


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ShouldtheStrataPropertyActrequireastratacorporationtoinformtheownersandtenantsassoonasfeasibleofanymaterialchangeininsurancecoverage?..............................................75Briefdescriptionoftheissue.....................................................................................................................75Discussionofoptionsforreform..............................................................................................................75Thecommittee’srecommendationforreform...................................................................................76

IssueforReform—TheStandardUnit............................................................................................................76Briefdescriptionoftheissue.....................................................................................................................76IBCcommentary..............................................................................................................................................77Thecommittee’srecommendationforreform...................................................................................80

Chapter5.DraftLegislationandRegulations..............................................................83Draftlegislation..............................................................................................................................................................83Draftregulations............................................................................................................................................................88

Chapter6.Conclusion..........................................................................................................89

AppendixA—ListofRecommendations........................................................................91AppendixB—BiographiesofProject-CommitteeMembers...................................93

PrincipalFundersin2018...............................................................................................101


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ACKNOWLEDGEMENTS TheBritishColumbiaLawInstitutethanksthemembersoftheStrataPropertyLaw(PhaseTwo)ProjectCommittee,withoutwhoseongoingdedicationthisprojectwouldnothavebeenpossible.Committeemembershavegenerouslysharedtheirtimeandexpertiseoverthecourseoftheproject.AdditionalacknowledgmentisduetoPatrickWilliams,whohastakenontheaddedresponsibilityofservingascommit-teechair.BCLIalsothanksallthoseindividualsandorganizationsthatparticipatedinthepub-licconsultationthatprecededthisreport.Theirresponsesandcommentshelpedthecommitteeinshapingandevaluatingthefinalrecommendationscontainedinthisreport.Forpublicizingtheconsultationpaperthatprecededthisreport,BCLIthankstheAdvocate,theCanadianBarAssociation—BCBranch,theCondominiumHomeOwnersAssociation,andtheVancouverIslandStrataOwnersAssociation.MembersoftheInsuranceBrokersAssociationofBritishColumbiaandtheInsur-anceBureauofCanadagenerouslygavetheirtimetomeetwiththeStrataPropertyLaw(PhaseTwo)ProjectCommitteeasitwasinitiallydevelopingitstentativerec-ommendationsfortheConsultationPaperonInsuranceIssuesforStratas.BCLIandthecommitteewouldliketothankIBABCandIBCandthefollowingindividuals:

• KenDeDecker,Chair,NationalCondominiumActReviewWorkingGroup,InsuranceBureauofCanada;

• TrudyLancelyn,InsuranceBrokersAssociationofBritishColumbia;

• MirandaLee,InsuranceBureauofCanada;

• GordonLi,InsuranceBrokersAssociationofBritishColumbia&CapriCMW;

• PatrickNorth,InsuranceBrokersAssociationofBritishColumbia&GNKIn-surance;

• ScottPreston,InsuranceBrokersAssociationofBritishColumbia&SeaFirstInsurance;

• RanaShamoon,InsuranceBureauofCanada;

• SteveStorrey,BFLCanada;

• SarahThompson,InsuranceBrokersAssociationofBritishColumbia&HubInternationalCoastal.


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TheviewsexpressedinthisreportarethoseofBCLIandthecommitteeandtheymaynotreflecttheviewsofanyofthelistedindividuals,IBABC,orIBC.TheStrataPropertyLaw(PhaseTwo)ProjecthasbeenmadepossiblebysupportfromtheRealEstateFoundationofBritishColumbia,theNotaryFoundationofBrit-ishColumbia,theMinistryofMunicipalAffairsandHousingforBritishColumbia,theRealEstateCouncilofBritishColumbia,theRealEstateInstituteofBritishColumbia,StrataPropertyAgentsofBritishColumbia,theAssociationofBritishColumbiaLandSurveyors,theVancouverIslandStrataOwnersAssociation,andtheCondominiumHomeOwnersAssociation.BCLIthanksalltheseorganizationsfortheirgenerouscontributionstotheproject.BCLIalsothankstheVancouverlawfirmClarkWilsonLLPforhostingcommitteemeetings.Finally,thestaffofBCLIhaveplayedakeyroleindesigning,managing,andexecut-ingtheworkleadinguptothisreport.JimEmmerton(executivedirectortoJune2015)andKathleenCunningham(executivedirectorJune2015topresent)havebothprovidedexecutiveplanningandmanagementfortheproject.KevinZakreski(stafflawyer)istheprojectmanager,andwasalsoresponsiblefordraftingthisreportandtheconsultationpaperthatprecededit.He,GregBlue,QC(seniorstafflawyer),andValerieLeBlanc(stafflawyer)havecontributedtosupportingpro-ject-committeemeetings.Andthefollowingstaffmembershavealsocontributedtotheresearchandadministrationforthisproject:EmilyAmirkhani(UniversityofVic-toriaLawCoopstudent),AlexandreBlondin(researchlawyer),GurinderCheema(summerlawstudent),AllisonCurley(summerlawstudent),RaissaDickinson(manager,communityengagement),EricHou(summerlawstudent),RachelKelly(researchlawyer),ShaunaNicholson(legalassistant),SergioOrtega(UniversityofVictoriaLawCoopstudent),ElizabethPinsent(officeadministrator),andBénédicteSchoepflin(socialmediacoordinator).


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EXECUTIVE SUMMARY Introduction Insuranceisapressingconcernforallhomeowners.Itisnolessimportantforpeo-plewhosehomesarelocatedwithinastrataproperty.Butinsurancegeneratessomecomplicatedlegalissueswithinstratapropertiesthatdon’tarisewithinasingle-familyhome.Thisisbecausetheone-to-onerelationshipofhomeownertoinsurerisrefractedinastratapropertyintoamorecomplexsetofrelationshipsinvolving(ataminimum)strata-lotowners,theirinsurers,thestratacorporation,anditsinsurers.ExperienceinBritishColumbiaandelsewherehasshownthatlegislationisneces-sarytocoordinatetheserelationships.ThisreportexamineshowtheStrataPropertyActandtheStrataPropertyRegulationareperformingincarryingoutthattask.Itcontains11recommendationsforre-formingtheactandtheregulation,toimprovehowtheyfunctioningoverningin-suranceinstrataproperties.About the Strata Property Law Project—Phase Two ThisisthefourthreportpublishedinBCLI’sStrataPropertyLawProject—PhaseTwo.Thephase-twoprojectbuildsontheconsultationandresearchcarriedoutinphaseoneoftheproject.ItaddresseslegislativereformoftheStrataPropertyAct,withthegoalofpromotingthedevelopmentofthenextgenerationoftheact.Previ-ousreportshaveconsideredterminatingastrata,complexstratas,andgovernanceissuesforstratas.Our supporters and the project committee TheStrataPropertyLawProject—PhaseTwohasbeenmadepossiblebyprojectfundingfromtheRealEstateFoundationofBritishColumbia,theNotaryFoundationofBritishColumbia,theMinistryofMunicipalAffairsandHousingforBritishCo-lumbia,theRealEstateCouncilofBritishColumbia,theRealEstateInstituteofBrit-ishColumbia,StrataPropertyAgentsofBritishColumbia,theAssociationofBritishColumbiaLandSurveyors,theVancouverIslandStrataOwnersAssociation,andtheCondominiumHomeOwnersAssociation.BCLIiscarryingouttheStrataPropertyLawProject—PhaseTwowiththeassistanceofavolunteerprojectcommittee.Thecommitteeismadeupofadiverserangeof


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expertsinthestrata-propertyfield.Its13currentmembershailfromthelegalandnotarialprofessions,owners’organizations,thestrata-managementandreal-estateprofessions,andthepublicsector.Consultation Paper on Insurance Issues for Stratas Thisreportwasprecededbythecommittee’sConsultationPaperonInsuranceIssuesforStratas,whichwaspublishedinSeptember2018.TheconsultationpaperwasmadeavailableviatheBCLIwebsite.Itspublicationmarkedthebeginningofathree-monthconsultationonthecommittee’stentativerecommendations.Thisconsultationattractedahighlevelofresponse,garneringatotalof90respons-es.Boththevolumeofresponsesandthequalityofthecommentshelpedtheprojectcommitteeinrefiningitsproposalsanddecidingonthefinalrecommendationscon-tainedinthisreport.Content of the report Introduction Thereportcontainssixchapters,includingitsbriefintroductoryandconcludingchapters.Theintroductorychaptergivesanoverviewoftheprojectandasummaryofthereport’srecommendations.Strata-property basics Thereport’ssecondchaptercontainsageneraloverviewofstrata-propertylaw.Thisdiscussionispitchedatreaderswhoareunfamiliarwiththedistinctivetermsandconceptsfoundinthisbodyoflaw.It’sintendedtoprovidethesereaderswithjustenoughinformationaboutthecreationandoperationofstratapropertiestoallowthemtoworktheirwaythroughthechaptersthatfollow.Insurance and strata properties Athoroughreviewofpart9oftheStrataPropertyActformsthesubjectofthere-port’sthirdchapter.Part9containstheact’slegalframeworkforinsuranceinstrataproperties.Afterbrieflyrecountingthelegislativehistoryofpart9,thechaptergivesadetailedreviewofitscomponentparts.Thesecomponentsincludethefollowingprovisions:

• legislativerequirements—thatis,mandates—onthestratacorporationtoobtainpropertyandliabilityinsurance;


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• anenablingprovision,allowingthestratacorporationtoobtaininsuranceotherthanthatrequiredbythelegislation;

• aprovisionconfirmingthestratacorporation’sinsurableinterestinthepropertyitmustinsure;

• reviewingandreportingrequirementsimposedonthestratacorporation;

• aprovisionspellingoutthenamedinsuredsonthestratacorporation’sin-suranceandestablishingarulepreventingsubrogatedclaimsbythestratacorporation’sinsurersagainstthosenamedinsureds;

• aprovisionregulatingthepaymentandapplicationofinsurancemoney;

• provisionsregardingdeductiblesinthestratacorporation’sinsurance;

• anenablingprovisionforstrata-lotownerstoobtaintheirowninsurance;

• aprovisionregulatingcontributionsbythestratacorporation’sandtheowners’insurers.

Issues for reform Whilethecommitteereviewedallofpart9oftheact,itsrecommendationsforre-formconcernonlythoseareaswherethecommitteesawaneedforimprovements.Theseareasconsistofthefollowingfourtopics.

• Theinsurancemandate:thecommitteerecommendedaddingarequire-menttothestratacorporation’sinsurancemandatetoobtaindirectors-and-officerscoverage.Thecommitteealsoconsideredmandatingcoveragefortwoperils(earthquakesandoverlandfloods)thataren’tcurrentlywithinthescopeofthemajorperilsthatmustbecovered.

• Insurancedeductibles:thecommitteemadetworecommendationscon-cerningdeductibles:(1)amendingthelegislationtoexpresslyassignre-sponsibilityforaninsurancedeductibletoaresponsibleowner;and(2)requiringstrata-lotownerstoobtaintheirowninsurancethatcoverspaymentofadeductibleunderastrata-corporationpolicy.

• Namedinsureds:thecommitteecanvassedrecentcaselawonthisprovi-sion.Initsview,legislativechangeisn’trequiredtoensurethatitcontinuestofulfilitsmainpurpose,whichconsistsofestablishingtherulepreventingsubrogatedclaimsagainstnamedinsureds.

• Reportingandadministration:thecommitteerecommendedthattheleg-islationrequirestratacorporationstoobtainappraisalstodeterminetheadequacyoftheirproperty-insurancecoverage;thatthefrequencyofsuch


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appraisalsbe(ataminimum)onceeverythreeyears;andthatthestratacorporationberequiredtoinformownersandtenantsofanymaterialchangeinthestratacorporation’sinsurancecoverage.

Finally,thisreportconsidersadoptionofthestandard-unitconceptasafeatureofBritishColumbia’slegislation,atopicwhichwasframedasaquestionfordiscussionintheconsultationpaper.ThestandardunitisanideausedinotherCanadianjuris-dictionstodeterminethescopeofastratacorporation’sproperty-insuranceobliga-tions.AdoptingthisconceptinBritishColumbiawouldrepresentasignificantchangeinthisprovince’slaw.Afterreflectingonthecommentsreceivedonitsques-tionfordiscussionandonrecentdevelopmentselsewhereinCanada,thecommitteerecommendedthatfurtherstudyandconsultationbedevotedtothisissue.Draft legislation and regulations Thereportcontainsachaptersettingoutdraftlegislationandregulations,whichareintendedtoillustratehowthecommittee’srecommendationscouldbeimplementedbyamendmentstotheStrataPropertyActandtheStrataPropertyRegulation.Conclusion Thisreport’sfinalrecommendationswillbesubmittedtotheprovincialgovernment.TheprovinceofBritishColumbiaregularlyupdatesstratalegislation.


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Chapter 1. Introduction An Overview of Insurance and Strata Properties Insuranceandhomeownershipgohandinhand.Formanypeople,owningahomeisthemostimportantinvestmentmadeintheirlifetimes.Butit’saninvestmentthatisbesetbyrisks.Firesorinclementweathercandamageordestroyabuilding.Anac-cidentonahomeowner’spropertycanresultinaweightysettlementorcourtjudg-ment.Alloftheserisksandmorehavethepotentialtoerodeordepletethehome-owner’sinvestment.Themainwaytoblunttheforceoftheserisksisbyinsurance.Thesocialpurposeofinsuranceistoserveas“amechanismforspreadingtheriskofloss.”1Peoplewhofacerisks“canteamupwithothersinthesameposition”and“contributetoafundfromwhichmoneywillbeavailabletopayforlosseswhentheyoccur.”2Homeown-ershaveaparticularlystrongincentivetoobtaininsurancetoprotecttheirinvest-ment.Thisincentiveisnolessstrongforahomeownerwhosehomeislocatedwithinastrataproperty.Butwhentheinterplayofinsuranceandstratapropertiesisexam-inedforlegalissues,thisincentiveisn’ttheonlythingthatshinesthrough.Whatbe-comesreadilyapparentisthatthissubjectisgovernedbyitsownlegalframework,whichmakesupasignificantpartofBritishColumbia’slawsonstrataproperties:theStrataPropertyAct3andtheStrataPropertyRegulation.4Whyisthislegalframeworknecessary?Itowesitsexistencetothefactthatsomeofthemostchallengingissuesinthestrata-propertyfieldconcerninsurance.“Insur-ance”is,asanearlycommentatoronstrata-propertylawputit,“probablythemostdifficultsubject,technically,forthelegislativedraftsman,thedeveloper,andtheowners.”51. CraigBrownetal,InsuranceLawinCanada,vol1(Toronto:ThompsonCarswell,2002)(loose-

leafrelease2010–1)at§1.1.

2. Ibid(commentingfurtheronthenatureofinsurance:“Eachcontribution,or‘premium,’ismuchlessthanthepotentiallossthecontributorfaces.Thisispossiblebecausethelossescoveredbythesystemarerandomlosses.Amongarelativelylargenumberofpeoplefacingsimilarrisks,onlyarelativefew(whoseidentityisunknown)attheoutsetwillactuallysufferloss.Thecon-tributionsofthemanypayforthelossesofthefew.”[footnoteomitted]).

3. SBC1998,c43.

4. BCReg43/2000.

5. RCBRisk,“CondominiumsandCanada”(1968)18:1UTLJ1at56.


2 British Columbia Law Institute

Thedifficultyappearstoresideintheexceptionaldemandsthissubjectplacesonthelawtocoordinateadiverserangeofactorsandstrikeacarefulbalancebetweenanelaborateandcomplexsetofinterests.Thesedemandsappearattwolevels.Atthefirst,operationallevel,therelativelysimplerelationshipofinsurertohome-ownerisrefractedintoarelationshipbetweenmultipleplayers.Amongtheseplay-ersisthestratacorporation,whichactsasacollectiveadministratorforthestrataproperty,onbehalfofitsowners.Aswillbeseen,stratacorporationsaresubjecttolegislativemandatestoobtaincertainformsofinsurance.Butnothingintheseman-datespreventsanindividualownerfromobtaininginsurance.Further,thelegalframeworkrecognizesthatotheractorsmaybeatplayinsomestrataproperties,suchastenantsandwhattheactreferstoas“occupants”(“aperson,otherthananownerortenant,whooccupiesastratalot”).6Finally,giventhefinancialrealitiesofhomeownership,anotherplayerexistswhoislikelytotakeakeeninterestinthestrataproperty’sinsurancearrangements:themortgagelender.Allofthisleadstothesignatureissueforthisreport,whichconcernsdesigninglawsthatstriveto“eliminat[e]thetwinevilsofoverlappingpoliciesandgapsincoverage.”7Atthesecond,conceptuallevel,strata-propertylawandinsurancelawarebothso-phisticated,detailed,andcomplexbodiesoflaw.TheStrataPropertyActcontainsover300sections.Commentatorshavestressedthesignificant,far-reachingimpactthisstatute(andthoselikeitinotherjurisdictions)hashadonreal-propertylaw.86. Supranote3,s1(1)“occupant.”Toroundoutthislistofplayersintheinsurancefieldforstrata

properties,itshouldbenotedthatsomestrataswillhaveonefurtherplayer:asection.Sectionsareakindofsubstratacorporation,whichcropupmostfrequentlyinmixed-usestratas.TheStrataPropertyActallowsthecreationofsectionsinlimitedcircumstancestorepresentthedif-ferentinterestsofspecifiedgroupsofowners(seeibid,s191).Theactgoesontograntsectionscertaincorporatepowers,oneofwhichisthepowerto“obtaininsuranceonly(a)againstperilsthatarenotinsuredbythestratacorporation,or(b)foramountsthatareinexcessofamountsinsuredbythestratacorporation”(ibid,s194(4)).Whilesectionsdon’tfigureintomuchofthediscussioninthisreport,theywereoneofthemainsubjectsoftwoearlierpublicationsinthisproject.SeeBritishColumbiaLawInstitute,ConsultationPaperonComplexStratas(2016),online:<www.bcli.org/wordpress/wp-content/uploads/2016/09/2016-08-31_BCLI-Consultation-Paper-on-Complex-Stratas-FINAL.pdf>[perma.cc/A43A-3NN7];BritishColumbiaLawInstitute,ReportonComplexStratas,Report81(2017),online:<www.bcli.org/wordpress/wp-content/uploads/2017/06/2017-06-19_BCLI-SPL-Ph2-Report-on-Complex-Stratas-FINAL.pdf>[perma.cc/NZZ8-JQMP](seeespeciallyrecommendation(12),whichrecommendsexpandingasection’spowertoobtaininsuranceat77–79).

7. PatrickJRohan,MelvinAReskin,&MichaelPSanchirico,“RecentDevelopmentsintheFieldofInsuranceforCondominiumProjects”(1974)48:4StJohn’sLRev1084at1092.

8. Seee.g.DonJManderscheid,“CondominiumContributions:AMatterofPriority”(1999)37:4Al-taLRev973at974(describingstrata-propertylegislationashaving“usheredinatotallyalien



BritishColumbia’sInsuranceAct9issimilarlylengthy(itrunstoabout170sections).Andthisactisonlyonepartofanintricatewebofstatutes,regulations,andcaselawwhichmakeupinsurancelaw.It’sreadilyapparentthatasignificanteffortwouldbeneededtoensurethatthesetwodistinctbodiesoflawaligntogetherforseamlessapplication.“Thestratacorporationconceptdoesnotfitneatlyintoanumberofin-suranceconceptsandprinciples,”asaleadingpracticeguideforstratapropertiesexplains,soanoverridinggoaloftheStrataPropertyAct’sinsuranceprovisionsisto“makeadjustmentsforthispurpose.”10

About the Strata Property Law Project—Phase Two ThisReportonInsuranceIssuesforStratasispartoftheBritishColumbiaLawInsti-tute’songoingStrataPropertyLawProject—PhaseTwo.BCLIbegantheStrataPropertyLawProject—PhaseTwoinsummer2013.Theproject’sgoalsaretostudyselectedareasofstrata-propertylaw,identifyissuescallingforreformofthelaw,andrecommendchangestotheStrataPropertyActtoaddressthoseissues.Thephase-twoprojectbuildsonBCLI’sStrataPropertyLawProject—PhaseOne,whichwascompletedin2012.Overthecourseofthephase-oneproject,BCLIcar-riedoutinitiallegalresearchandfocusedconsultationwithleadingexpertsinthestrata-propertyfield.TheresultsofthisresearchandconsultationwerepublishedinBCLI’sReportonStrataPropertyLaw:PhaseOne,11whichrecommendedthatBCLIundertakealaw-reformprojecttoexaminethefollowingsubjects:(1)fundamentalchangestoastrata;(2)complexstratas;(3)selectedgovernanceissues;(4)commonproperty;(5)selectedland-titleissues;(6)selectedinsuranceissues;(7)leaseholdstratas.

conceptoflandownership”[footnoteomitted]);CathySherry,“LessonsinPersonalFreedomandFunctionalLandMarkets:WhatStrataandCommunityTitleCanLearnfromTraditionalDoctrinesofProperty”(2013)36:1UNSWLJ280at314(“whenusinglegislationtocreatenovelformsofpropertywhichaccommodatehighdensitydevelopment,wemustbeconsciousofthewaysinwhichwearestrayingfromorthodoxrulesorpropertyandtheconsequencesofthedi-vergence”).

9. RSBC2012,c1.

10. ContinuingLegalEducationSocietyofBritishColumbia,ed,BritishColumbiaStrataPropertyPracticeManual(Vancouver:ContinuingLegalEducationSocietyofBritishColumbia,2008)(loose-leaf2018update)at§15.1.

11. Report70(2012),online:<www.bcli.org/sites/default/files/2012-11-30_BCLI_Report_on_Strata_Property_Law--Phase_One.pdf>[perma.cc/FBV8-J9C7].



Thefirstsubjectinthephase-twoprojectwaspartiallyaddressedintheproject’sfirsttwopublications,theConsultationPaperonTerminatingaStrata12andtheRe-portonTerminatingaStrata.13TheLegislativeAssemblyofBritishColumbiaimple-mentedthisreport’srecommendationsinfall2015.14Complexstratas,theproject’ssecondsubject,werethefocusofafurthertwopubli-cationsforthisproject:theConsultationPaperonComplexStratas15andtheReportonComplexStratas.16Governanceissueshavebeenaddressedbytwopublications,theConsultationPaperonGovernanceIssuesforStratas17andtheReportonGovernanceIssuesforStratas.18Andaconsultationpaperhasbeenpublishedthatcombinesthreesubjects:commonproperty,selectedland-titleissues,andfundamentalchangestoastrata(thatis,theremainingissueswithfundamentalchangesthatweren’taddressedinthecommit-tee’searlierworkonterminatingastrata).19Unfortunately,thetimeandresourcesavailabletotheprojecthaveruledouttheplannedreviewofitsseventhsubject,leaseholdstrataplans.

The Phase-Two Project’s Supporters TheStrataPropertyLawProject—PhaseTwohasbeenmadepossiblebyprojectgrantsfromtheRealEstateFoundationofBritishColumbia,theNotaryFoundation12. (2014),online:<www.bcli.org/wordpress/wp-content/uploads/2014/05/2014-05-15_BCLI-

Consultation-Paper-on-Terminating-a-Strata-FINAL.pdf>[perma.cc/XK58-9PLF].

13. Report79(2015),online:<www.bcli.org/wordpress/wp-content/uploads/2015/02/2015-02-20_BCLI-SPL-Ph2-Report-on-Terminating-a-Strata-FINAL.pdf>[perma.cc/GW7W-VCBX].

14. SeeNaturalGasDevelopmentStatutesAmendmentAct,2015,SBC2015,c40,ss37–55(inforce28July2016).

15. Supranote6.

16. Supranote6.

17. (2018),online:<www.bcli.org/wordpress/wp-content/uploads/2018/03/2018-03-13_BCLI-Consultation-Paper-on-Governance-Issues-For-Stratas-CONSULTATION-FINAL.pdf>[per-ma.cc/3A57-2889].

18. Report85(2019),online:<www.bcli.org/wordpress/wp-content/uploads/2019/01/Report-on-Governance-issues-final-report-WEB.pdf>[perma.cc/BRQ5-L6ZB].

19. SeeConsultationPaperonCommonProperty,LandTitles,andFundamentalChangesforStratas(2018),online:<www.bcli.org/wordpress/wp-content/uploads/2018/11/2018-12-07_BCLI-CP-on-Common-Property-Land-Titles-and-Fundamental-Changes-for-Stratas-FINAL-reduced.pdf>[perma.cc/A2EQ-H5XB].



ofBritishColumbia,theMinistryofMunicipalAffairsandHousingforBritishCo-lumbia,theRealEstateCouncilofBritishColumbia,theRealEstateInstituteofBrit-ishColumbia,StrataPropertyAgentsofBritishColumbia,theAssociationofBritishColumbiaLandSurveyors,theVancouverIslandStrataOwnersAssociation,andtheCondominiumHomeOwnersAssociation.

The Strata Property Law (Phase Two) Project Committee

Incarryingoutthephase-twoproject,BCLIisgratefultohavetheassistanceofanexpertprojectcommittee.BriefbiographiesofcommitteemembersmaybefoundinappendixB.20

Consultation Paper on Insurance Issues for Stratas ThisreportwasprecededbytheConsultationPaperonInsuranceIssuesforStratas,whichwaspublishedinSeptember2018.21Publicationoftheconsultationpaperopenedathree-monthwindowforthepublictocommentonthecommittee’s10ten-tativerecommendationsforreformandonequestionfordiscussion.Theconsultationpapergarnered90responses,whichisahighlevelofresponseforaBCLIlaw-reformpublication.Responseswerefullyconsideredincraftingthisre-port’sfinalrecommendations.Thecommitteethankseveryonewhoprovidedare-sponseinthisconsultation.Theireffortshelpedthecommitteetotestandrefineitsthinkingontheissuesforreformfoundinthisreport.

An Overview of this Report Whilethecommitteereviewedallofpart9oftheStrataPropertyAct,itsrecommen-dationsforreformfocusonfourareas:

• theinsurancemandate:thecommitteerecommendedaddingarequirementtothestratacorporation’sinsurancemandatetoobtaindirectors-and-officerscoverage;thecommitteealsoconsideredmandatingcoveragefortwoperils(earthquakesandoverlandfloods)thataren’tcurrentlywithinthescopeofthemajorperilsthatmustbecovered;

20. See,below,at93–100.

21. (2018),online:<www.bcli.org/wordpress/wp-content/uploads/2018/09/2018-09-14_BCLI-Consultation-Paper-on-Insurance-Issues-For-Stratas-FINAL.pdf>[perma.cc/S84T-3JYK].



• insurancedeductibles:thecommitteemadetworecommendationsconcern-ingdeductibles:(1)amendingthelegislationtoexpresslyassignresponsi-bilityforaninsurancedeductibletoaresponsibleowner;and(2)requiringstrata-lotownerstoobtaintheirowninsurancethatcoverspaymentofadeductibleunderastrata-corporationpolicy;

• namedinsureds:thecommitteecanvassedrecentcaselawonsection155oftheactbutdidnotrecommendanychangestothatprovision;

• reportingandadministration:thecommitteerecommendedthatthelegisla-tionrequirestratacorporationstoobtainappraisalstodeterminetheade-quacyoftheirproperty-insurancecoverage;thatthefrequencyofsuchap-praisalsbe(ataminimum)onceeverythreeyears;andthatthestratacor-porationberequiredtoinformownersandtenantsofanymaterialchangeinthestratacorporation’sinsurancecoverage.

Finally,thisreportconsidersadoptionofthestandard-unitconceptasafeatureofBritishColumbia’slegislation,atopicwhichwasframedasaquestionfordiscussionintheconsultationpaper.ThestandardunitisanideausedinotherCanadianjuris-dictionstodeterminethescopeofastratacorporation’sproperty-insuranceobliga-tions.AdoptingthisconceptinBritishColumbiawouldrepresentasignificantchangeinthisprovince’slaw.Afterreflectingonthecommentsreceivedonitsques-tionfordiscussionandonrecentdevelopmentselsewhereinCanada,thecommitteerecommendedthatfurtherstudyandconsultationbedevotedtothisissue.



Chapter 2. Strata-Property Basics Introduction Strata-propertylawhasahighlyoriginalcastofcharactersandconcepts.Itstermsandideasarehowthelawcreatesstrataproperties’distinctivecombinationofown-ershipandmanagementofproperty.Understandingtheseconceptsisanecessarypartofanalyzingthelegalissuesthatcanariseinastrataproperty.Whoisresponsibletorepairproperty?Howdodecisionsgetmadeinacollectiveofpropertyowners?Howareexpensesdividedupamongtheseowners?Whatroledothebylawsplayinestablishingthegoverningnormsofthecommunity?Whatismeantbysuchtermsascommonproperty,stratalot,andunitentitlement?Thean-swerstotheseandsimilarquestionswilloftenfiguredeeplyintotheanalysisofanygiveninsuranceissueinastrataproperty.Thischapter’sgoalistoacquaintreaderswithbasicstrata-propertytermsandcon-cepts.Itispitchedatreaderswhoarenewtothesubjectorunfamiliarwithstratapropertiesandismeanttogivethemjustenoughinformationtofindtheirwaythroughthechaptersthatfollow.

The Essential Elements of a Strata Property Strataproperties22arealegaldevicethataccommodatesindividualownershipofaninterestinlandwithinacollective,multi-unitstructure.Thelawcontainsmanysuchdevices.Whatsetsastratapropertyapartfrom,say,acooperative,ajointtenancy,atenancyincommon,oralong-termlease,arethefollowing“twoessentialelements”:

• thedivisionofpropertyintounits,tobeindividuallyowned,andcommonelements,tobeownedincommonbytheownersoftheunits;and

• anadministrativeframeworktoenabletheownerstomanagetheproperty.23

22. Formanypeoplethenamestratapropertyitselfisthefirststumblingblockthat’sencounteredin

adiscussionofthisareaofthelaw.BritishColumbiaistheonlyjurisdictioninCanadathatusesthisname.Itssignificanceismainlyhistorical:itreflectstheoriginsofthisprovince’slawinleg-islationthatwasenactedfirstinAustralia.OtherCanadianprovincesandterritoriesdrewonAmericanlawtocreatetheirlegislation.SotheyadoptedtheleadingAmericanword,condomini-um.Thetwotermsactuallydescribethesameconcept.Nothinginlawturnsontheuseofoneortheother.

23. OntarioLawReformCommission,ReportontheLawofCondominiumReport11(1967)at3.



Theseessentialelementsexistwithinabodyoflawthat“reflectsthecombinationofseverallegalconcepts”—especiallyconceptsdrawnfromreal-estatelaw,easements,andcorporatelaw.24

The Three Generations of Strata-Property Legislation

Introduction Itmightbepossibletoachievethiscombinationofrulesandessentialelementsbycarefullyexecutedeasementsandagreements.ButthroughoutCanada,theUnitedStates,andAustralia,stratapropertieshavebeenfosteredbylegislation.BritishColumbiaisnoexceptiontothisapproach.Thisprovincehassupportedthecreationandadministrationofstratapropertiesbylegislation,whichcanbeseenasdevelopinginthreedistinctgenerations.Strata Titles Act 1966–74 InApril1966,BritishColumbiabecamethefirstjurisdictioninCanadatoenactstra-ta-propertylegislation.Thefirst-generationact,calledtheStrataTitlesAct,camein-toforceinSeptemberofthatyear.25Thefirst-generationactwasskeletallegislation.Itdidlittlemorethanenablepeopletocreateandadministerstrataproperties.Strata Titles Act/Condominium Act 1974–2000 In1974,thesecondgenerationofthelegislationappeared.26Thesecond-generationactretainedtheframeworksetoutinthefirst-generationactandenhanceditbyaddingnewprovisionsdedicatedtoconsumerprotectionandaddressingconcernsabouttheadministrationofstrataproperties.

24. ShawCablesystemsvConcordPacificGroup,2007BCSC1711atpara6,LeaskJ(quoting2475813

NovaScotiaLtdvRodgers,2001NSCA12atpara5,CromwellJA).

25. SBC1966,c40.

26. StrataTitlesAct,SBC1974,c89.SeealsoStrataTitlesAmendmentAct,1977(No2),SBC1977,c64(containingamajorsetofamendmentstothe1974act).



In1979,thenameofthelegislationwaschangedtoCondominiumAct.27Thesecond-generationactiscommonlyknownbythisname.Strata Property Act 2000–present Thethirdgenerationofstrata-propertylegislation,theStrataPropertyAct,wasen-actedinJuly1998.28TheStrataPropertyActwasonlybroughtintoforceafteratransitionalperiod,whichlasteduntil1July2000.Althoughitpreservesmuchoftheframeworkputinplacebythefirsttwogenera-tionsofthelegislation,theStrataPropertyActalsocontainsalargenumberofprovi-sionsnotfoundinpreviousacts,makingitafarmorecomprehensivestatutethanitstwopredecessors.PartsoftheStrataPropertyActhavebeensignificantlyamendedin2009,292012,30and2015.31Thesechangesprimarilyrelatetofinancialplanning,disputeresolution,andtermination;theydon’tdirectlyaddressinsuranceissues.TheStrataPropertyActisprobablythemostdetailedandsophisticatedlegislationofitskindinCanada.Itcontainsanarrayoflawsonsubjectsthataren’taddressedinequivalentstatutesfoundintheotherprovincesorterritories.32Buttheactwasalso27. RSBC1979,c61.

28. Supranote3.

29. SeeStrataPropertyAmendmentAct,2009,SBC2009,c17.

30. SeeCivilResolutionTribunalAct,SBC2012,c25.

31. SeeNaturalGasDevelopmentStatutesAmendmentAct,2015,supranote14.

32. SeeAlberta:CondominiumPropertyAct,RSA2000,cC-22(seealsoCondominiumPropertyAmendmentAct,2014,SA2014,c10,s55[partlyinforce]);Saskatchewan:TheCondominiumPropertyAct,1993,SS1993,cC-26.1;Manitoba:TheCondominiumAct,SM2011,c30,CCSMcC170;Ontario:CondominiumAct,1998,SO1998,c19(seealsoProtectingCondominiumOwnersAct,2015,SO2015,c28,Schedule1[partlyinforce]);Québec:arts1038–1109CCQ;NewBrunswick:CondominiumPropertyAct,SNB2009,cC-16.05;PrinceEdwardIsland:Condomini-umAct,RSPEI1988,cC-16;NovaScotia:CondominiumAct,RSNS1989,c85;NewfoundlandandLabrador:CondominiumAct,2009,SNL2009,cC-29.1;Yukon:CondominiumAct,RSY2002,c36;NorthwestTerritoriesandNunavut:CondominiumAct,RSNWT1988,cC-15(duplicatedforNu-navutbys29oftheNunavutAct,SC1993,c28).Asthisreportwasbeingpreparedforpublica-tion,AlbertaannouncedplanstobringthebulkoftheprovisionsoftheCondominiumPropertyAmendmentAct,2014,withassociatedregulations,intoforcevariouslyon1July2019and1Jan-uary2020.SeeAlberta,NewsRelease,“Makingcondosabetterplacetolive:Newruleswillin-creasetransparencyandimprovecondominiumgovernanceinAlberta”(14December2018),online:<www.alberta.ca/release.cfm?xID=62241C77ECC2B-ED28-41CB-20BBFFBAB3B1DB03>[perma.cc/5ZG4-MEUX][AlbertaNewsRelease](announcingproposedamendmentstotheCon-



consciouslydraftedtoprovideenhancedflexibilitytocertainkindsofstratas.Thisqualitycanmakeitdifficulttodiscusstheact’sprovisions,asit’softennecessarytonotebothageneralruleandaseriesofexceptions.Forthesakeofsimplicity,thepagesthatfollowwillfocusonthegeneralprovisionsandwilltouchonexceptions,wherenecessary,infootnotes.

The Owner-Developer Thepersonwhostartsthestratificationprocessiscalledanowner-developer.Beforesomeonebecomesanowner-developer,thatpersonisanownerofland33whowantstodevelopitasastrataproperty.Thatpersonisresponsibleforshep-herdingtheprojectthroughtheprocedureforstratifyingland.Afterthisprocessiscomplete,theowner-developerholdsalltitlesinthedevelopment,whicharegradu-allysoldofftopurchasers.Theowner-developercanhaveadecisiveinfluenceoverboththeoriginalconcep-tionandtheongoingoperationofastrataproperty.Manyofthekeydecisionsthataremadeinsettingupastratapropertyoriginatewiththeowner-developer.Thesedecisionscanreverberatelongaftertheowner-developerhasleftthescene.

Creation of a Strata Property by Deposit of a Strata Plan

Thestratificationprocessbeginswiththedepositinthelandtitleofficeofastrataplan.Thestrataplanhasbeendescribedas“thefundamentaldocumentthatdividespropertyintostratalotsandcreatestitleineachofthosestratalots.”34Itisadocu-

dominiumPropertyRegulation,AltaReg168/2000,online:<www.alberta.ca/assets/documents/condominium-property-regulation.pdf>[perma.cc/Q6KE-SCF7]).

33. Andhere’sthefirstexceptiontonote:insomecases,itisn’tthelandownerbutratheralesseeunderalong-termgroundleasewhoactsastheowner-developer.Theactcallsthesecasesleaseholdstrataplans.Forsimplicity’ssake,thisreportwillfocusonthemuchmorecommoncaseofalandownerdevelopingastratapropertyandwilldownplaytherarerleaseholdstrataplan.Thatsaid,thereisnothinginlawthatpreventsthecommittee’sproposalsfromextendingtoleaseholdstrataplans.

34. ChowvTheOwners,StrataPlanNW3243,2015BCSC1944atpara5,SmithJ.



mentpreparedbyaqualifiedlandsurveyor,whichisrequiredtocontainspecificde-tailsandmeetexactingtechnicalstandards.35

Kinds of Strata Plans ThereareessentiallytwokindsofstrataplansundertheStrataPropertyAct.Oneiscalledabare-landstrataplan.Itconcernsthesubdivisionofland.36Theotherkindofstrataplanisn’tnamedintheact,butit’scommonlycalledabuild-ingorconventionalstrataplan.37Thiskindofstrataplandealswiththesubdivisionofabuilding.Thisisthemorecommonkindofstrataplan.Amongthethingsthatastrataplandoes,oneofthemostimportantistodistinguishbetweenthetwobuildingblocksofastrataproperty:stratalotsandcommonprop-erty.

Strata Lots Astratalotisthelegislation’snamefortheunitinastratapropertythatisindividu-allytitledandowned.Acommonexampleofastratalotisanapartmentinaresiden-tialstrataproperty.Butitisimportanttobearinmindthatnothinginstrata-propertylawrestrictsstratalotstoapartmentsorresidentialuses.Stratalotsmaybetownhouses,shopsusedforcommercialpurposes,industrialplants,recreationalcottages,orparkinglots.Solongastheyareidentifiedassuchonastrataplan,stratalotsmaybealmostanythingwithintheingenuityofanowner-developer.But,thatsaid,theactdoes,inmanyplaces,distinguishbetweenstratalotsbasedontheiruses.Thisdistinctionturnsonwhetherornotthestratalotisusedforresiden-

35. SeeStrataPropertyAct,supranote3,s244.

36. Seeibid,s1(1)“barelandstrataplan”(“means(a)astrataplanonwhichtheboundariesofthestratalotsaredefinedonahorizontalplanebyreferencetosurveymarkersandnotbyreferencetothefloors,wallsorceilingsofabuilding,or(b)anyotherstrataplandefinedbyregulationtobeabarelandstrataplan.”).Regardingparagraph(b),notethattodatenoregulationsonthispointhavebeenadopted.

37. SeeAdrienneMMurray,“TheBasicsofStrataPropertyLaw,”inContinuingLegalEducationSo-cietyofBritishColumbia,ed,StrataProperty—2006Update:MaterialspreparedfortheContinu-ingLegalEducationseminar,StrataPropertyFundamentalsforLawyers,heldinVancouver,B.C.,onOctober20,2006(Vancouver:ContinuingLegalEducationSocietyofBritishColumbia,2006)1.1at1.13;MikeMangan,TheCondominiumManual:AComprehensiveGuidetoStrataLawinBritishColumbia,3rded(Vancouver:StrataPublishing,2010)at17;BritishColumbiaStrataPropertyPracticeManual,supranote10at§1.14.



tialpurposes.Residentialstratalotisadefinedterm,meaning“astratalotdesignedorintendedtobeusedprimarilyasaresidence.”38Stratalotsusedforanyotherpurposearereferredtoasnonresidentialstratalots.Whetherastratalotisaresi-dentialstratalotoranonresidentialstratalotcanhaveabearingonhowcertainprovisionsrelatingtoproperty,expenses,andgovernanceareappliedtoit.

Common Property, Limited Common Property, and Common Assets

Common property TheStrataPropertyActessentiallytakesatwo-prongedapproachtodefiningcom-monproperty.39Thefirstprongbasicallyclassifieseverythingthatisn’tpartofastratalotascom-monproperty:“‘commonproperty’means(a)thatpartofthelandandbuildingsshownonastrataplanthatisnotpartofastratalot.”Thisdefinitionisfairlyeasytograspintheabstract.Someconcreteexamplesofthingsthatcouldfitthisdefinitioninclude“hallways,stairwells,roofs,balconies,attics,elevators,patios,parkingstalls,”andeventheunderlyinglandinabuildingstrataplan(butnotinabare-landstrataplan).40Thesecondprongofthedefinitiontacklescasesinwhichitwouldbedifficulttoap-plyasimpleandclear-cutdistinctionbetweenbeingpartofastratalotorpartofthecommonproperty.Itisaimedatalonglistofspecificbuildingcomponentsandsys-temsforservices(“pipes,wires,cables,chutes,ductsandotherfacilitiesforthepas-sageorprovisionofwater,sewage,drainage,gas,oil,electricity,telephone,radio,

38. Supranote3,s1(1)“residentialstratalot.”SeealsoEastBarriereResortLtdvTheOwners,Strata

PlanKAS1819,2017BCCA183.

39. Seesupranote3,s1(1)“commonproperty.”

40. BritishColumbiaStrataPropertyPracticeManual,supranote10at§3.2.Regardingtheunderly-inglandinabare-landstrataplan,“partsofthelandaredividedintoseparatestratalots,andthestrataplanwillnottypicallyshowthebuildingsoneachstratalot.Inthiscase,theentirebuild-ing,whetherconstructedbytheownerdeveloperorbythestratalotowner,onthebarelandstratalot(includingtheexteriorportionsofthebuildingandtheinteriorpipes,wiring,andoth-ermechanicalsystems)willformpartofthestratalot.Thecommonpropertywillbelimitedtoaccessroads,sidewalks,andrecreationalfacilitiesshownonthestrataplan,aswellasanyoftheundergroundservicesandthephysicalplantifcapableofservicingmorethanonestratalot.”(Ibid.)



television,garbage,heatingandcoolingsystems,orothersimilarservices”).41Thesethingsmaybecommonpropertybydefinition,dependingonthelocationofthethingortheusageofthething.42Andit’satthispointthatthesecondprongoftheact’sdefinitionofcommonpropertysplitsintotwobranches.Thefirstbranchdealswithlocation.It’sconcernedwithboundarycases.Thedefini-tionfocusesattentiononwhetherthecomponentorsystemlistedearlierislocated“withinafloor,wallorceiling”thatitselfformsaboundary

• betweenastratalotandanotherstratalot,

• betweenastratalotandthecommonproperty,or

• betweenastratalotorcommonpropertyandanotherparcelofland.43Theeffectofthisbranchofthedefinitionistobringtheseboundarycaseswithinthescopeofcommonproperty.Thesecondbranchdealswithuse.Evenifanyofthethingslistedabove(pipes,wires,etc.)findsitself“whollyorpartiallywithinastratalot,”it’sstillwithinthedef-initionofcommonpropertyifitis“capableofbeingandintendedtobeusedincon-nectionwiththeenjoymentofanotherstratalotorthecommonproperty.”Courtde-cisionsconsideringthisbranchofthedefinitionhaveconcludedthatifthecompo-nentorsystemis“connected”toothercomponentsorsystemsthatserviceotherstratalots44orisotherwisepartofan“integratedwhole,”45thenitshouldbeconsid-eredcommonproperty.Asaleadingpracticeguidehasnoted,thisapproach“leave[s]veryfewsuchfacilitieswithinacondominiumoutsideofthe‘commonproperty’ofthatcomplex.”46Limited common property Withinthescopeofcommonproperty,theactembedstheconceptoflimitedcom-monproperty.Thisiscommonpropertythathasbeen“designatedfortheexclusive

41. StrataPropertyAct,supranote3,s1(1)“commonproperty.”

42. SeeBritishColumbiaStrataPropertyPracticeManual,supranote10at§3.2(“Whetheraparticu-larpartofasystemorservice,suchasawire,pipe,orduct,constitutespartofthecommonpropertyisdeterminedbythelocationofthepartorbytheusageofthepart.”).

43. Supranote3,s1(1)“commonproperty.”

44. TaychukvOwners,StrataPlanLMS744,2002BCSC1638atpara28,GrayJ.

45. FudgevOwners,StrataPlanNW2636,2012BCPC409atpara48,WoodsProvCtJ.

46. BritishColumbiaStrataPropertyPracticeManual,supranote10at§3.2.



useoftheownersofoneormorestratalots.”47Sometypicalexamplesofthingsthatmightbelimitedcommonpropertyareabalconyforanapartmentinahigh-risetower,apatioforatownhouseorground-floorapartment,andaparkingspaceinaparkinglot.Butitshouldbeborneinmindthattheseitemsarenotnecessarilylimitedcommonpropertyandtheydon’texhaustthecategoryoflimitedcommonproperty.Thedefi-nitionofthetermisgeneralandopen-ended.Thekeytoknowingwhethercommonpropertyislimitedcommonpropertyisthedesignation.Therearetwowaystomakethisdesignation.Itmaybemadeontheoriginalstrataplanoranamendmenttothatstrataplan.48Oritmaybemadebyaresolutionofthestratacorporation,passedbya3/4vote,andfiledinthelandtitleofficealongwithasketchplan.49Courtcaseshaveconsideredthenatureofastrata-lotowner’sinterestinadesigna-tionoflimitedcommonproperty.Aleadingcasehasdescribedit“asaspecialcate-goryofpropertyoverwhichtheunitownerhasasubstantialdegreeofcontrolandsomethingapproachingabeneficialinterest.”50Thekeywordinthispassagemightbeapproaching,asalatercasehasemphasizedthebalancebetweentheownerben-efitingfromadesignationandtheotherstrata-lotowners:

Itisclear,however,thattheunitholderisnotthebeneficialownerofthelimitedcom-monproperty.Theotherownersretainmorethansimplelegaltitle.Theyretainabun-dleofrightsandresponsibilitiesassetout,interalia,inss.71–75oftheStrataPropertyAct.Thisisconsistentwiththecommunalnatureofcommonproperty.51

Acommentatorhasconcludedthat,onthestateofthecaselaw,“[a]nowner’sinter-estin[limitedcommonproperty]isnoteasilydefinedwithintheparametersoftra-ditionalpropertylaw.”52

47. Supranote3,s(1)(1)“limitedcommonproperty.”

48. Ibid,s73(a)–(b).

49. Ibid,ss73(c),74.Thesketchplanreferredtointhetextmustbeonethat“(a)satisfiestheregis-trar[oflandtitles],(b)definestheareasoflimitedcommonproperty,and(c)specifieseachstra-talotwhoseownersareentitledtotheexclusiveuseofthelimitedcommonproperty”(ibid,s73(2)).

50. MourevTheOwners,StrataPlanNW2099,2003BCSC1364atpara22,GrobermanJ.

51. YestalvNewWestminster(Cityof),2012BCSC925atpara28,MasterMuir.

52. BritishColumbiaStrataPropertyPracticeManual,supranote10at§3.3.



Common assets Finally,theactalsocharacterizessomepropertyascommonassets.Thedefinitionofcommonassetscontainstwocategories.Thefirstis“personalpropertyheldbyoronbehalfofastratacorporation.”53Examplesofthiscategoryincludeitemsofpropertylikefurnitureinalobbyorexerciseequipmentinagym.Thesecondcategoryis“landheldinthenameoforonbehalfofastratacorporation,thatis(i)notshownonthestrataplan,or(ii)shownasastratalotonthestrataplan.”54Anexampleof(i)isanyoffsitelandownedorheldonbehalfofthestratacorporation.Anexampleof(ii)isacaretaker’ssuiteinaresidentialbuildingwhichisastratalot.

The Strata Corporation Inadditiontodividinglandintostratalotsandcommonproperty,depositingastra-taplaninthelandtitleoffice“establishes”astratacorporation.55Thisstratacorpo-rationisthemajorcomponentofthesecondessentialelementofastrataproperty(“anadministrativeframeworktoenabletheownerstomanagetheproperty”).56Itisthevehiclebywhichstrata-lotownersareabletoadministertheirstrataprop-erty.Theactsaysthatthepurposeofastratacorporationistotakeresponsibilityfor“managingandmaintainingthecommonpropertyandcommonassetsofthestratacorporationforthebenefitoftheowners.”57Ownershipofcommonpropertyandcommonassetsisinthehandsofthestrata-lotowners,collectively.58Themember-shipofthestratacorporationismadeupof“theownersofthestratalotsinthestra-taplan.”59Thestratacorporationisthemeansforcoordinatingtheseownerstomakeeffectiveandtimelycollectivedecisions.53. Supranote3,s1(1)“commonasset.”

54. Ibid,s1(1)“commonasset.”

55. Ibid,s2(1)(a).

56. SeeOntarioLawReformCommission,supranote23at3.

57. Supranote3,s3.

58. Seeibid,s66(“Anownerownsthecommonpropertyandcommonassetsofthestratacorpora-tionasatenantincommoninashareequaltotheunitentitlementoftheowner’sstratalotdi-videdbythetotalunitentitlementofallthestratalots.”).Theactdoesn’tallowthelinkbetweenownershipofastratalotandownershipofashareinthecommonpropertytobebroken.Seeibid,s251(2)(“Anownermustnotdealwiththeowner’sshareinthecommonpropertyandcommonassetsofthestratacorporationseparatelyfromtheowner’sstratalotexceptasex-presslyallowedbythisAct.”).

59. Ibid,s2(1)(b).



The Fundamentals of Strata-Corporation Governance

Bylaws and rules Astratacorporationisrequiredtohavebylaws.60Bylawsareathird-ordersetoflawstogovernstrataproperties,rankinginprioritybelowtheactanditsregula-tions.61Thatsaid,formanyissues,the“bylaws,morethananyotherdocument,di-recttheconductofowners,tenantsandoccupants”andvisitors.62Bydefault,thelegislationprovidesstratacorporationswithasetofstandardby-laws.63Butstratacorporationsarefreetoamendthesestandardbylawsortocreatetheirownbylaws,solongasthesebylawamendmentsareapprovedbya3/4vote,arefiledinthelandtitleoffice,anddonotconflictwiththeStrataPropertyAct,theStrataPropertyRegulation,oranyotherenactmentorlaw.64Bylawsmayaddressthefollowingtopics:

• “thecontrol,management,maintenance,useandenjoymentofthestratalots,commonpropertyandcommonassetsofthestratacorporation”;65

• “theadministrationofthestratacorporation.”66

60. SeeStrataPropertyAct,ibid,s119(1).

61. Seeibid,s121.

62. Murray,supranote37at1.1.2.

63. Seesupranote3,s120.

64. Seeibid,ss126–128(rulesonbylawamendment),120(1)(filingamendmentsinthelandtitleoffice),121(unenforceablebylaws).Onthelastpoint,inadditiontobeingunenforceableduetoaconflictwithanenactmentoralaw,abylawisunenforceabletotheextentit“destroysormod-ifies”oneoftheeasementsforsupport,services,orsheltercreatedundertheactor“prohibitsorrestrictstherightofanownerofastratalottofreelysell,lease,mortgageorotherwisedisposeofthestratalotoraninterestinthestratalot”(ibid,s121(1)(b)–(c)).Ofcourse,thereareex-ceptionstothelastpoint,whichallowastratacorporationtoputinplacerentalrestrictions,re-strictionsonthesaleofastratalot,oragerestrictions,allofwhichmustconformstrictlytode-tailedrequirementscontainedintheact(seeibid,s121(2)).

65. Ibid,s119(2).

66. Ibid,s119(2).



Unlikebylaws,rulesareoptionalforastratacorporation.Rulesarealsomorelim-itedinscopethanbylaws,astheymayonlygovern“theuse,safetyandconditionofthecommonpropertyandcommonassets.”67Rulescan’tbeusedtogovernstratalotsortoaddresstheadministrationofastratacorporation.Annual general meetings and special general meetings Theactrequiresmanystrata-corporationdecisionstobemadebytheownerscollec-tively.Thesedecisionsaretypicallyidentifiedasonescallingfora“resolution”asev-idenceofthedecision.Resolutionsareconsideredandeitheradoptedorrejectedatgeneralmeetingsofthestratacorporation.Stratacorporationsarerequiredtohaveatleastonegeneralmeetingayear—called,appropriately,anannualgeneralmeeting.68Thestandardbylawscontaintheorderofbusinessfortheannualgeneralmeeting’sagenda.69Stratacorporationsmayalsohaveanynumberofspecialgeneralmeetings.70Theactcontainsadetailedandexactingsetofprovisionsonthecallingandconductofgeneralmeetings.71Forthepurposesofthisdiscussion,it’sonlynecessarytotakesomenoticeofhowtheactdealswithvoting.Votesareultimatelyhowdecisionsatgeneralmeetingsgetmade.Thebasicpositionismajorityrule—whattheactcallsmajorityvote.72Aresolutionpassedbyamajorityvoteisonethatwasapprovedbymorethanhalfofthevotescastbyowners—or

67. Seeibid,s125.

68. Seeibid,s40.Thereisanexceptiontothisrequirement:ifalleligiblevotersagree,theymayconsentinwritingtothemainbusinessofthemeeting(namelypassingabudgetandelectingastratacouncil)andmaywaive,eachbyawrittendocument,theholdingofanannualgeneralmeeting(seeibid,s41).

69. Seeibid,ScheduleofStandardBylaws,s28.

70. Seeibid,s42.

71. Seeibid,ss45–50,53–58.SeealsoReportonTerminatingaStrata,supranote13at63–71;GerryFanaken,UnderstandingtheCondominiumConcept:AnInsightfulGuidetotheStrataPropertyAct(Coquitlam,BC:PaigeCondominiumServices,2013)at36–48,52–55;Mangan,supranote37at101–114;BritishColumbiaStrataPropertyPracticeManual,supranote10at§§6.36–6.74.

72. Seesupranote3,s1(1)“majorityvote”(“meansavoteinfavourofaresolutionbymorethan1/2ofthevotescastbyeligiblevoterswhoarepresentinpersonorbyproxyatthetimethevoteistakenandwhohavenotabstainedfromvoting”).



theirproxyholders,ifthereareany—atthegeneralmeeting.73Inotherwords,thequestionisdecidedbythemajorityofowners(andproxyholders)presentatthemeetingandnotabstainingfromvoting.Somedecisionsrequireapprovalbymorethanamajorityofvoters.Themostcom-monformofthiskindofapprovaliswhattheactcallsa3/4vote.74Aresolutionispassedbya3/4votewhenatleast75percentofthevotescastatageneralmeetingareinfavourofit.75Incertainexceptionalcases,theactdemandsthataresolutionbesupportedbyaunanimousvoteinorderforittobeapproved.76Aresolutiononlymeetsthisthresholdwhenallstrata-lotownersvoteforit.So,unlikeresolutionspassedbyamajorityvoteora3/4vote,aresolutioncan’tbepassedbyaunanimousvoteifitissupportedjustbyalltheownerswhoturnuptothegeneralmeetingandvoteforitifthereareotherownerswhodon’tattendthemeeting(inpersonorbyproxy)orwhoabstainfromvoting.Finally,ifthevoteisonwhattheactcallsa“winding-upresolution”77(toterminatethestrata—thatis,thecancelthestrataplan

73. Theactdoesn’tactuallyrefertoownersvoting;itstermiseligiblevoters.Thistermreflectstwo

concerns:(1)sometimesanowner’svoteforastratalotmaybeexercisedbysomeoneotherthananowner,suchasatenant(seeibid,s54(b)),amortgagee(seeibid,s54(c)),aparent,guardian,orotherrepresentative(seeibid,s55),oracourt-appointedvoter(seeibid,s58);and(2)insomecases,anownermaylosetherighttovoteiftheownerisindefaultofcertainpay-mentsowingtothestratacorporationandthestratacorporationistherebyentitledtofilealienagainstthatowner’sstratalot(seeibid,ss53(2),116(1)).Theseareallexceptionalcases,soforbrevity’ssakethetextwillsimplyrefertoownersvoting.

74. Seeibid,s1(1)“3/4vote”(“meansavoteinfavourofaresolutionbyatleast3/4ofthevotescastbyeligiblevoterswhoarepresentinpersonorbyproxyatthetimethevoteistakenandwhohavenotabstainedfromvoting”).

75. Aspecialrulecomesintoplayif“aresolutionrequiredtobepassedbya3/4voteispassedatanannualorspecialgeneralmeetingbypersonsholdinglessthan50%ofthestratacorporation’svotes”(ibid,s51(1)).Underthisrule,“[w]ithintheoneweekfollowingthevote,personsholdingatleast25%ofthestratacorporation’svotesmay,bywrittendemand,requirethatthestratacorporationholdaspecialgeneralmeetingtoreconsidertheresolution”(ibid,s51(3)).Ifthatspecialgeneralmeetingattractsaquorumofowners,andiftheresolutionisnotpassedagainbya3/4voteatthatmeeting,thenthestratacorporationmaynotimplementtheresolution(seeibid,s51(10)).

76. Seeibid,s1(1)“unanimousvote”(“meansavoteinfavourofaresolutionbyallthevotesofalltheeligiblevoters”).

77. Ibid,s1(1)“winding-upresolution”(“meansaresolutionreferredtoin(a)section272(1),or(b)section277(1).”).



andwindupthestratacorporationunderpart16),78thenitmaybepassedbyan80-percentvote.79The strata council Astratacorporationmusthaveastratacouncil.80Thestratacounciliselectedateachannualgeneralmeeting,withitsmembersusuallycomingfromthestrata-lotowners.81Thestratacouncilhasbeendescribedasbeing“effectivelyaboardofdirectors”82and“somewhatanalogoustoafourthlevelofgovernment.”83Thesedescriptionsre-flecttheact’sbasicposition,whichisthatthe“powersanddutiesofthestratacor-porationmustbeexercisedandperformedbya[strata]council.”84Asaruleofthumb,thismeansthatthestratacouncilhastheauthoritytomakedecisionsre-spectingthestratacorporation,exceptforthosedecisionswheretheactcallsforaresolutionatageneralmeeting.85Budgets and funds Theactrequiresthestratacorporationto“establish,”andthestrata-lotownersto“contribute,bymeansofstratafees,”tothefollowingtwofunds:

78. Seeibid,ss272–89.

79. Seeibid,s1(1)“80%vote”(“meansavoteinfavourofaresolutionbyatleast80%ofthevotesofalltheeligiblevoters”).

80. SeeStrataPropertyAct,ibid,s25.

81. Seeibid,s28(1).Whilestrata-councilmembersareinfactdrawnoverwhelminglyfromtheranksofowners,thelegislationactuallyallowsthreegroupspresumptivelytobestrata-councilmembers:(1)owners;(2)individualswhorepresentcorporateowners;and(3)tenantswhohavebeenassignedanowner’srighttovote(ibid,s28(1)).Further,theactallowsstratacorpo-rationstoadoptbylawsthatallowotherclassesofpeopletobestrata-councilmembers(ibid,s28(2)).

82. Mangan,supranote37at39.

83. Fanaken,supranote71at21.

84. Supranote3,s4.

85. SeeMurray,supranote37at1.1.4(“WheretheActdoesnotreferenceavotebytheowners...theactivityordutymaybeperformedbythestratacouncilwithoutinputfromtheowners.However,wheretheActrequiresavoteoftheowners,thedecisiontobemadeisnotoneforthestratacouncilaloneandcanonlybemadewiththeapprovaloftheownersbasedonthevotingthresholdsetoutinthatsection.”).



• “anoperatingfundforcommonexpensesthat(i)usuallyoccureitheronceayearormoreoftenthanonceayear,or(ii)arenecessarytoobtainadepre-ciationreport”;86and

• “acontingencyreservefundforcommonexpensesthatusuallyoccurlessof-tenthanonceayearorthatdonotusuallyoccur.”87

Theactaddressestheestablishmentofthesefunds,raisingoftheircontributions,expendituresfromthem,andaccountingforthoseexpenditures.88Atthecentreofthesefunctionsisthestratacorporation’sannualbudget.89Amongotherthings,theannualbudgetmustcontain“theestimatedexpendituresoutoftheoperatingfund,itemizedbycategoryofexpenditure;thetotalofallcontributionstotheoperatingfund;thetotalofallcontributionstothecontingencyreservefund;eachstratalot’smonthlycontributiontotheoperatingfund;[and]eachstratalot’smonthlycontri-butiontothecontingencyreservefund.”90

Common Expenses Manyofthedecisionsthatastratacorporationhastomakeconcernspendingmon-eytopayforexpenses.Theactmakesthestrata-lotownerscollectivelyresponsibleforwhatitcallscommonexpenses,whichitdefinesasexpenses

• relatingtothecommonpropertyandcommonassetsofthestratacorporation,or

• requiredtomeetanyotherpurposeorobligationofthestratacorporation.91Commonexpensesoftenrelatetothefirstbulletpointandare,ineffect,theflipsideofowningpropertyincommon.Thestratacorporationhasalegalobligationto“re-pairandmaintaincommonpropertyandcommonassets.”92

86. Supranote3,s92(a).

87. Ibid,s92(b).

88. Seeibid,ss92,93,95–100,103–109.

89. Seeibid,s103.

90. StrataPropertyRegulation,supranote4,s6.6(1)(c)–(g).

91. Supranote3,s1(1)“commonexpenses.”

92. Ibid,s72(1).See,below,at23–26(furtherdiscussionofthedutytorepairandmaintainproper-ty).



Althoughthestratacorporationisresponsibleforcommonexpenses,93payingforrepairs—asforallcommonexpenses—ultimatelycomesfromcontributionsfromstrata-lotowners.Howthesecontributionsaredeterminedleadstoconsiderationofoneoftheact’sfoundationalconcepts,unitentitlement.

Unit Entitlement What is unit entitlement and how is it used? Atbottom,unitentitlementisanumber.Eachstratalotinastratapropertyisas-signeditsownunit-entitlementnumber.Theactusesunitentitlementinawaythattiesthisconceptintooneofthedefiningcharacteristicsofastrata.Thisdefiningcharacteristicistheuniquestrataproperty–ownershipmodel,whichcombinesindividualownershipofstratalotswithsharedownership,amongstrata-lotowners,ofastrata’scommonpropertyandcommonassets,andsharedresponsibilityforthedebtsandliabilitiesofthestratacorpora-tion.Specifically,unitentitlementisusedin“calculations”that“determine”eachstratalot’sshareof:

• commonproperty;

• commonassets;

• commonexpenses;and

• liabilitiesofthestratacorporation.94How is unit entitlement determined? Theacthasadetailedsetofrulesonhowtodeterminetheunitentitlementofastra-talot.Whichrulesapplyinagivencasedependson(1)theuseofthestratalotand(2)thekindofstrataplanatissue.Theactdistinguishesbetweenresidentialandnonresidentialuses,andcontainsaspecialruleformixed-usestratas.Themethodsfordeterminingtheunitentitlementofastratalotare:93. Seesupranote3,s91.

94. Ibid,s1(1)“unitentitlement.”SomejurisdictionsgoevenfurtherthanBritishColumbiaanduseunitentitlementtodetermineastratalot’svotingrightsanditsshareofresidualpropertyaftertermination.



• forresidentialstratalots:oneof(a)thehabitableareaofthestratalot,(b)awholenumberthatisthesameforallresidentialstratalots,or(c)anumberthat“allocatesafairportionofthecommonexpensestotheownerofthestratalot,”intheopinionofthesuperintendentofrealestate,whomustapproveanyuseofoption(c);95

• fornonresidentialstratalots:oneof(a)thetotalareaofthestratalot,(b)awholenumberthatisthesameforallnonresidentialstratalots,or(c)anumberthat“allocatesafairportionofthecommonexpensestotheownerofthestratalot,”intheopinionofthesuperintendentofrealestate,whomustapproveanyuseofoption(c);96

• formixed-usestratas:“[i]fthestrataplanconsistsofbothresidentialandnonresidentialstratalots,”thenunitentitlement“mustbeapprovedbythesuperintendentasfairlydistributingthecommonexpensesbetweentheownersoftheresidentialstratalotsandtheownersofthenonresidentialstratalots.”97

Forresidentialandnonresidentialstratalots,inmostcasesunitentitlementisde-terminedusingoption(a).Ineffect,thismeansthatthesizeofthestratalotdeter-minesitsunitentitlement.Itisslightlymorecomplicatedthanthat,becausetheactreliesontwodifferentstandardsfordeterminingthesizeofastratalot.Forresidentialstratalots,thesizeofastratalotisdeterminedbymeasuringitshab-itablearea.Thisisadefinedterm,98whicheffectivelylimitsunitentitlementtolivingareasinastratalot,excludingthingslike“patios,balconies,garages,parkingstallsorstorageareasotherthanclosetspace.”99Fornonresidentialstratalots,sizeisdeter-minedbythetotalareaofthestratalot.100

95. Ibid,s246(3)(a).

96. Ibid,s246(3)(b).

97. Ibid,s246(5).

98. Seeibid,s246(4).SeealsoBarrettvTheOwners,StrataPlanLMS3265,2017BCCA414.

99. StrataPropertyRegulation,supranote4,s14.2.

100.Totalareaisn’tadefinedterm;itsimplytakesitseverydaymeaning.SeeBritishColumbiaStrataPropertyPracticeManual,supranote10at§2.39(“‘totalarea’includesallofthoseareaslistedasexcludedfrom‘habitablearea’ofaresidentialstratalot”).



Inbothcases,option(a)requiresunitentitlementtobe“determinedbyaBritishCo-lumbialandsurveyor.”101Theserulesonlyapplywhenthestrataplanisaconventional(building)strataplan.Forbare-landstrataplans,aspecialrulecomesintoplay.102When is unit entitlement determined and where is it found? Theunitentitlementofastratalotmustbedeterminedattheoutsetofthestratifica-tionprocess.Theactrequiresthe“personapplyingtodepositastrataplan”toin-cludetheunitentitlementsofthestratalotsinthestrataplan.103Theseunit-entitlementnumbersaregroupedtogetherasascheduletothestrataplan,calledtheScheduleofUnitEntitlement.104Thisscheduleisthedefinitivesourceoftheunitentitlementofastratalotinthatstrataplan.

The Duty to Repair and Maintain Property Strata-propertylawhasadetailedframeworkforallocatingresponsibilitytorepairandmaintainproperty.Thissystemdependsontheinterplayoflegislation,regula-tions,andstrata-corporationbylaws.Common property and common assets Eventhoughthestrata-lotownerscollectivelyownthecommonpropertyandcom-monassets,theStrataPropertyActmakesthestratacorporationresponsiblefortheirrepairandmaintenance.Astheactprovides,“thestratacorporationmustre-pairandmaintaincommonpropertyandcommonassets.”105Theactgoesontosetouttwoexceptionstothisbasicduty.106Theseexceptionsal-lowastratacorporationtomakeastrata-lotownerresponsibleforthemaintenance101.Supranote3,s246(3)(a),(b).

102.Ibid,s246(6)(“Theunitentitlementofastratalotinabarelandstrataplanmustbe(a)awholenumberthatisthesameforallofthestratalotsinthestrataplan,or(b)anumberthatisap-provedbythesuperintendentandthatinthesuperintendent’sopinionallocatesafairportionofthecommonexpensestotheownerofthestratalot.”).

103.Ibid,s246(2).

104.Seeibid,s246(2).Thescheduleisaprescribedform.SeeStrataPropertyRegulation,supranote4,FormV.

105.Supranote3,s72(1).

106.Seeibid,s72(2).



ofcommonproperty.Inbothcases,theactrequiresthestratacorporationtoadoptabylawthatmakestheownerresponsibleforrepairandmaintenancetothecommonproperty.Thefirstcasedealswith“limitedcommonpropertythattheownerhasarighttouse.”107Thestandardbylawsthatapplybydefaulttoastratacorporationgiveanex-ampleofhowresponsibilitytorepairandmaintainlimitedcommonpropertymaybedividedbetweenthestratacorporationandastrata-lotownerwhohastherighttousethelimitedcommonproperty.Thestandardbylawsprovide,asageneralproposition,that“[a]nownerwhohastheuseoflimitedcommonpropertymustre-pairandmaintainit,exceptforrepairandmaintenancethatistheresponsibilityofthestratacorporationunderthesebylaws.”108Thebylawsgoontodealwiththeexception,byprovidingthatthestratacorporationmustrepairandmaintainlimitedcommonpropertyintwodefinedcircumstances.Thefirstcircumstanceconcernsthefrequencyoftherepairormaintenance.Ifit’srepairsormaintenancethat“intheordinarycourseofeventsoccurslessoftenthanonceayear,”thenit’sthestratacorporation’sresponsibilitytocarryitout.109Thesecondcircumstanceconcernsthetypeofpropertythatmustberepairedormain-tained.Thestratacorporationmustrepairandmaintainlimitedcommonpropertyinallcases(“nomatterhowoftentherepairormaintenanceordinarilyoccurs”)ifthepropertyisanyofthefollowing:

• thestructureofabuilding;

• theexteriorofabuilding;

• chimneys,stairs,balconiesandotherthingsattachedtotheexteriorofabuilding;

• doors,windowsandskylightsontheexteriorofabuildingorthatfrontonthecom-monproperty;

• fences,railingsandsimilarstructuresthatenclosepatios,balconiesandyards.110Becausethislistiscontainedinabylawitcanbeamendedbyastratacorporation.

107.Ibid,s72(2)(a).

108.Ibid,ScheduleofStandardBylaws,s2(2).

109.Ibid,ScheduleofStandardBylaws,s8(c)(i).

110.Ibid,ScheduleofStandardBylaws,s8(c)(ii).



Thesecondcaseinvolves“commonpropertyotherthanlimitedcommonproper-ty.”111Similartothefirstcase,forthesecondcasethelegislationsaysthatastratacorporationmayassigntheresponsibilitytorepairandmaintainsuchcommonpropertytoastrata-lotownerifthestratacorporationisenabledtodosobyaby-law.Butthelegislationalsoattachesanimportantconditiontothesecondcase.Itprovidesthatthestratacorporationmayadoptsuchabylawforcommonpropertyotherthanlimitedcommonproperty“onlyif[thecommonpropertyis]identifiedintheregulationsandsubjecttoprescribedrestrictions.”112Inpractice,thisconditionhasturnedthesecondcaseintoadeadletter.Thisisbecausethenecessaryenablingregulationhasneverbeenadopted.Strata lots Thebasicpresumptionofstrata-propertylawisthatstrata-lotownersareresponsi-bleforrepairsandmaintenancetotheirstratalots.Thispresumptionflowsfromtheirownershipinterestinthestratalots.ButtheStrataPropertyActallowsforthispresumptiontobedisplaced.Itprovidesthata“stratacorporationmay,bybylaw,takeresponsibilityfortherepairandmaintenanceofspecifiedportionsofastratalot.”113Thestandardbylawsthatapplybydefaulttoastratacorporationgiveanexampleoftheextenttowhichastratacorporationmayberesponsibleforrepairingandmain-tainingastratalot.Asastartingplace,thestandardbylawsprovidethat“[a]nownermustrepairandmaintaintheowner’sstratalot,exceptforrepairandmaintenancethatistheresponsibilityofthestratacorporationunderthesebylaws.”114Theby-lawsgoontoidentifyspecifiedportionsofastratalotthatastratacorporationmustrepairandmaintain.Theyprovidethatastratacorporationmustrepairandmain-tainastratalot—solongasthatstratalotis“inastrataplanthatisnotabarelandstrataplan”115—butthatduty“isrestrictedto”thefollowingportionsofastratalot:

• thestructureofabuilding,

• theexteriorofabuilding,

• chimneys,stairs,balconiesandotherthingsattachedtotheexteriorofabuilding,

111.Ibid,s72(2)(b).

112.Ibid,s72(2)(b).

113.Ibid,s72(3).

114.Ibid,ScheduleofStandardBylaws,s2(1).

115.Ibid,ScheduleofStandardBylaws,s8(d).



• doors,windowsandskylightsontheexteriorofabuildingorthatfrontonthecom-monproperty,and

• fences,railingsandsimilarstructuresthatenclosepatios,balconiesandyards.116Becausethislistiscontainedinabylawitcanbeamendedbyastratacorporation.

Dispute Resolution and the Civil Resolution Tribunal Finally,resolutionofdisputesisanimportantpartofstrata-propertylaw.InBritishColumbiaitisparticularlyimportantbecausetheprovincehasrecentlyembarkedonanewapproachtostratadisputeresolution.ThecentrepieceofthisnewapproachistheCivilResolutionTribunal.Thetribunal’smandateis“toprovidedisputeresolutionservicesinrelationtomattersthatarewithinitsauthority,inamannerthat”

• isaccessible,speedy,economical,informalandflexible,

• appliesprinciplesoflawandfairness,andrecognizesanyrelationshipsbetweenpar-tiestoadisputethatwilllikelycontinueafterthetribunalproceedingisconcluded,

• useselectroniccommunicationtoolstofacilitateresolutionofdisputesbroughttothetribunal,and

• accommodates,sofarasthetribunalconsidersreasonablypracticable,thediversityofcircumstancesofthepersonsusingtheservicesofthetribunal.117

Sinceitsinception,thetribunal’sauthorityhasextendedtomostkindsofstratadis-putes.118Thetribunalhasbeenacceptingstrata-disputeclaimssince2016.Giventhatit’sstillearlydaysforthetribunal,thisprojecthasn’tmadeanattempttoaddressreformsconcerningdisputeresolution.Buttheexistenceandoperationofthetribunalisanimportantpartofstrata-propertylawinthisprovince,andshouldbeborneinmindwhilethisreportfocusesoninsurance.

116.Ibid,ScheduleofStandardBylaws,s8(d).

117.CivilResolutionTribunalAct,supranote30,s2(2).SeealsoTheOwners,StrataPlanBCS1589vNacht,2018BCSC455atpara9[Nacht],FuntJ(descriptionoftheCivilResolutionTribunal).

118.SeeCivilResolutionTribunalAct,supranote30,s3.6.



Chapter 3. Insurance and Strata Properties Introduction Insuranceissubjecttoasophisticatedanddetailedbodyoflaw.119Likestrata-propertylaw,insurancelawishometoadistinctivesetofideasandterms.Forthisreport’spurposes,it’snotnecessarytogiveanoverviewofinsurancelawtothesamescaleastheoverviewofstrata-propertylawinthepreviouschapter.Insur-ancelawcanbeseenasatreewithmanyseparatebranches,whichcoverareassuchaspropertyinsurance,liabilityinsurance,marineinsurance,andmotor-vehiclein-surance.Thepartsofinsurancelawthatarerelevanttostratapropertiesarelargelycontainedinpart9oftheStrataPropertyAct.120Sothischapter’sfocusisalmosten-tirelyontheprovisionsofpart9.Thatsaid,thereisatight-knitgroupofconceptsthatsupportsallthebranchesofin-surancelaw.Abriefreviewoftheseconceptssetsthestageforthischapter’sover-viewofpart9.

Background on Insurance and Insurance Law Insurance defined TheInsuranceActdefinesinsurancetomean“theundertakingbyonepersontoin-demnifyanotherpersonagainstlossorliabilityforlossinrespectofacertainriskorperiltowhichtheobjectoftheinsurancemaybeexposed,ortopayasumofmoneyorotherthingofvalueonthehappeningofacertainevent.”121Eventhoughthistechnical,legaldefinitionmaynotcaptureeveryconceivableinsur-anceproductthatcouldenterthemarket,122itdoesmakeanumberofsignificantpoints.

119.SeeDenisBoivin,InsuranceLaw,2nded(Toronto:IrwinLaw,2015)at56(“Canadianinsurance

lawisamixtureoffederal,provincial,andterritoriallegislation,regulations,directives,commonlaw,andcustom.”).

120.Seesupranote3,ss149–162.SeealsoStrataPropertyRegulation,supranote4,ss9.1–9.3.

121.Supranote9,s1“insurance.”

122.SeeBoivin,supranote119at25–54(generaldiscussionoftherangeofinsuranceproductsavailableinCanada).



• “Undertakingbyoneperson”:asamatteroflegalclassification,insuranceisabranchofthelawofcontracts;123butinsurancecontractsarehighlyregulatedunderalegalframeworkthatoftendepartsfromthemainprinci-plesofcontractlaw.124

• “Toindemnifyanotherperson”:underacontractofinsurance,a“financiallosswillbemadegood,”but“nomorethan[thatloss]willbepaid”;inotherwords,insuranceisn’tsupposedtobeusedto“engineerlosssoastoprofitfromit.”125

• “Againstlossorliabilityforlossinrespectofacertainriskorperil”:thebedrocksocialpurposeofinsuranceistoshifttheriskofloss,primarilyfromanindividualpersontoabroadergroup.126

Distinguishing principles of insurance law Buildingonthisdefinitionofinsurance,aleadingCanadiantextbookhassaidthatin-surancelawismarkedbyasetof“distinguishingprinciples.”127

• Utmostgoodfaith:Incontrasttogeneralcontractlaw,underinsurancelawtheprincipleofbuyerbewareislargelydisplaced—particularly,asregards

123.SeeBrown,supranote1at§1.2.SeealsoJesuitFathersofUpperCanadavGuardianInsuranceCo

ofCanada,2006SCC21atpara27,LeBelJ(“Insurancepoliciesformaspecialcategoryofcon-tracts.”).

124.SeeBoivin,supranote119at56(“fewindustrieshaveattractedtheattentionoffederalandpro-vincialgovernments,legislatures,andcourtsasmuchastheinsuranceindustryhas”).

125.Brown,supranote1at§1.2(c).

126.SeeBrown,ibidat§1.1(“Insuranceisamechanismforspreadingtheriskofloss.Housesburndown.Jewelleryisstolen.Shipssink.Courtsorderpeopletopaydamages.Peoplewhofacethepossibilityofoccurrencessuchasthesecanteamupwithothersinthesameposition.Theycancontributetoafundfromwhichmoneywillbeavailabletopayforlosseswhentheyoccur.Eachcontribution,or‘premium,’ismuchlessthanthepotentiallossthecontributorfaces.Thisispos-siblebecausethelossescoveredbythesystemarerandomlosses.Amongarelativelylargenumberofpeoplefacingsimilarrisks,onlyarelativefew(whoseidentityisunknown)attheoutsetwillactuallysufferloss.Thecontributionsofthemanypayforthelossesofthefew.”[footnoteomitted]);BarbaraBillingsley,GeneralPrinciplesofCanadianInsuranceLaw,2nded(Toronto:LexisNexisCanada,2014)at1(“Fromthepointofviewofapersonbuyinginsurancecoverage,insuranceisaboutprotectingoneselffromfinancialloss.Fromasocietalpointofview,however,insuranceisfundamentallyaboutspreadingtheriskofloss.”).

127.Brown,supranote1at§1.2.



thedisclosureofrelevantinformation.Instead,boththeinsuredandthein-sureroperateunderadutytoactingoodfaith.128

• Fortuity:Insurancecoverslossesthatarefortuitous,thatislossesthat“oc-currandomly.”129

• Indemnity:Thisfacetofinsurancelawwasdiscussedintheprevioussec-tion,whereitwasnotedthatitsgoalistodeterpeoplefrombeingindiffer-entto(or,worse,beingontheactivelookoutfor)losses,byremovingthefi-nancialincentivetoengineeraloss.Thisisusuallyreferredtoasmoralhaz-ard.The“avoidanceof[moralhazard]isthemainobjectiveoftheindemnityprinciple.”130

• Consumerprotection:Inviewofthedifferencesinlevelsofsophistication,knowledge,andexpertiseaboutinsurancebetweeninsurancecompaniesandinsurancepurchasers,“muchofinsurancelawhasasanobjectivetheprotectionofconsumers.”131

Strata-Property Legislation and Insurance Why does strata-property legislation deal with insurance and how does it tackle the subject? Provisionsoninsurancehavebeenafeatureofstrata-propertylegislationinNorthAmericasincetheadventofthatlegislationinthe1960s.Onerationalefortheexist-enceoftheseprovisionslinkedinsuranceconceptuallytothedutytorepairproper-ty.Asanearlycommentatornoted,legislation“compel[ling]”thepurchaseofinsur-anceforstratapropertiesisnecessary,giventhe“vitalcommoninterestinhavingrepairsmade.”132Thispointleadstoanothergeneralpointthatisimportanttounderstandingthein-suranceprovisionsoftheStrataPropertyActandtoapplyingtheminpractice.Eventhoughthelegislativedutiestorepairandtoinsuremaybeboundtogetheratthelevelofconceptandrationale,inBritishColumbiathelegislationspellsoutthescope128.Seeibidat§1.2(a).

129.Ibidat§1.2(b).

130.Ibidat§1.2(c).

131.Ibidat§1.2(d).Theauthorsmentionafifthdistinguishingprinciple,“compensation,”buttieitexclusivelytomotor-vehicleinsurance,whichofcourseisn’trelevanttostrataproperties(seeibidat§1.2(e)).

132.Risk,supranote5at59.



ofthosedutiesindifferentways.133So,inpractice,“[w]hetherandtowhatextentastratacorporationoranownerhasinsurancehasnothingtodowithwhomustcarryoutorpayforarepair.”134Theothermajorrationaleforinsuranceprovisionsinstrata-propertylegislationwastoaddresstheneedtocoordinatethediverseplayerswhomaybeactiveinplacinginsuranceinastrataproperty.135Rightfromtheoutset,commentatorsandpolicy-makerssawthattherewereessentiallythreewaysinwhichstrata-propertylegisla-tioncouldmanageinsurancecoverage:

• insurancecouldbelefttotheindividualstrata-lotowners;

• insurancecouldbetheexclusiveconcernofthestratacorporation;

• insurancecouldbesubjecttoahybridsystem,inwhichsomeelementsareassignedtothestratacorporationandothersareopentotheowners.136

Eventhoughonecommentatordescribeditas“themostobviousscheme,”137simplyleavinginsurancetothestrata-lotownersnevergainedmuchtraction.Itranagroundonsomeobviousproblems,suchasthedifficultyofcoordinatingadiverserangeofownerstoguaranteesufficientcoverage.138Evenifadequatecoveragecould133.See,above,at23–26(discussionofthescopeofthedutytorepairandmaintainproperty).

134.Mangan,supranote37at265–266[footnoteomitted].SeealsoBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.4(“Astratacorporation’sobligationtoinsureisbroaderthanitsownershiprightsanditsdutytorepairandmaintain.”);DavidvTheOwners,StrataPlanKAS2955,2018BCCRT498(discussingscopeofstratacorporation’sdutytoinsurepropertyvis-à-visitsdutytorepairandmaintainproperty).

135.Subsidiaryrationalesfortheinsurancemandateincludepromotingeconomicefficiencyandfairnessamongstrata-lotowners.SeeStevensvSimcoeCondominiumCorpNo60(1998),42OR(3d)451at452,[1998]OJNo5843(QL)(DivCt)[Stevens],thecourt(“Therationaleforimpos-ingthedutytoobtaininsuranceonthecorporationistoprovideefficientmeanstoensurethatallownershaveadequateinsuranceatlowcostandtoavoidtheriskofprejudicetootherown-ersthatwouldresultifanownerfailedtoobtaininsuranceandwasunableorunwillingtore-pairhispremisesathisownexpense.”[citationomitted]).

136.SeeRisk,supranote5at57–58;PatrickJRohan,“DisruptionoftheCondominiumVenture:TheProblemsofCasualtyLossandInsurance”(1964)64:6ColumLRev1045at1046–47.

137.Risk,supranote5at57.

138.SeeRohan,supranote136at1048(“Thecondominiumdweller,however,isinaconditionofstructuralandfinancialdependency,becausehecannotunilaterallyinsure(andrecoverthepro-ceedsnecessarytorestore)everysegmentofthebuildingthatmaybeessentialtoaccessanden-joymentofhisparticularunit.Hisinterestbeinglimited,andthefacilitiestobecoveredsovastanddiversified,anindividualcouldnothopetoinsureadequatelywithouttheaidoftheassocia-tionorasubstantialnumberofhisneighbors.”[footnotesomitted]).SeealsoFanaken,supra



beguaranteed,obtainingitownerbyownerwouldbethemostexpensivewaytoprovideforinsurance.139Authorizingthestratacorporationtobeexclusivelyresponsibleforinsurancewouldavoidtheseproblems.But,intheirplace,newoneswouldlikelyspringup.Itwouldbeverydifficultforthestratacorporationtoaccountforindividualvariationinfur-nishingandoutfittingstratalots.140Individualownerswouldlikelyfinditobtrusiveandadiminishmentoftheirownershipintereststohavetheirchoicesforinsurancecoveragereducedtoasinglestandard,imposedbythewishesofthemajority.141Sothemodelthatemergedwasahybrid,whichcompelledthestratacorporationtoinsurecertainaspectsofthecomplexbutwhichalsoallowedforoverlappingcover-agebetweenthestratacorporationandtheownersforotheraspects.142Asonecommentatorputit,“[i]fanythemeisrevealed,itappearstobeoneofpermissiveduplicationofcoverage.”143Theemergenceofthismodelhasledtosomeperennialconcernsforstrata-propertyinsuranceprovisions.Theseconcernsmaybesummarizedascompellingthelegisla-tiontodothreethings:

• mandatingcoverageincertainareasbythestratacorporation;

note71at120(“Fromacommonsenseperspective,itisnotreasonableorlogicaltoproposethateachownerinacondominium,stratacorporationshouldobtainandmaintaintheirownbasicinsurance.Itwouldbechaotic,unreliableandlikelynotcosteffective.Thelegislators,therefore,clearlyenvisionedasimpleschemewherebythestratacorporationisshoulderedwiththedutytoobtainandmaintaininsuranceonbehalfofitsowners.”).

139.SeeRohan,supranote136at1047(“Thecondominiumunitisanintegralpartofalargerstruc-turewhichmaybeinsuredmosteconomicallyandconvenientlyasanentity....”[footnoteomit-ted]).

140.SeeIrwinDavis,“CondominiumandtheStrataTitlesAct”(1966)9:6CanBarJ469at485–486(“Substantialstructuralchangesorimprovementstooneapartmentincreasingitsvalue,eitherwillnotbecoveredbythepolicyorwillbepaidforinpartbytheotherownersundertheblan-ketpolicy.”).

141.SeeRohan,supranote136at1061(“Thecentralattractionofthecondominiumtothepurchaseristheconceptofhomeownership,albeitahomesurroundedonallsides,aboveandbelow,byotherhomes.Consequently,theverysalespsychologyreliedupontoattractbuyerswilloperatetosuggesttheneedfor,orsatisfactionofhaving,apolicyofinsurance.”[footnoteomitted]).

142.Seeibidat1053–1057.

143.Ibidat1055.



• enablingcoverageinotherareasbythestratacorporationandthestrata-lotowners;144

• managinganyoverlapsorgapsincoveragethatmayresult.TheseconcernsareonfulldisplayinBritishColumbia’slegislation.

Legislative History in British Columbia Evolution of legislation through three generations of strata-property legislation BritishColumbiahashadinsuranceprovisionsinitsstrata-propertylegislationrightfromtheact’sinceptionin1966.Thedevelopmentoftheseprovisionshasfollowedafamiliarpattern,whichhasbeenobservedinothersubjectscoveredinthisproject.Attheoutset,policymakerswereawareofpotentiallegalissuesthatneededtobeaddressedinthelegislationbutweren’tcertainaboutbeingabletofillinallthede-tails.Asanearlycommentatoroninsuranceprovisionsinstrata-propertylegislationputit,“thelackofmeaningfulexperienceinthisareasuggeststhatimprovisationislikelyforseveralyears.”145Witheachmajorrevisionoftheact,moreandmorepartsofthelegalframeworkhavetakenshape.First-generation act: 1966–74 BritishColumbia’sfirstgenerationofstrata-propertylegislationcontainedjustonesectiononinsurance.146Thebulkofthisprovisionwasconcernedwithmappingoutwherestrata-lotownersareentitledtoplaceinsuranceinadditiontotheinsuranceplacedbythestratacorporation.

144.InBritishColumbiathereispotentiallyathirdactoratplayinsomestrataproperties,assections

arealsoenabledbythelegislationtoobtaininsurancecoverage.SeeStrataPropertyAct,supranote3,s194(4)(“Asectionmayobtaininsuranceonly(a)againstperilsthatarenotinsuredbythestratacorporation,or(b)foramountsthatareinexcessofamountsinsuredbythestratacorporation.”).

145.Rohan,supranote136at1046.

146.SeeStrataTitlesAct,supranote25,s15.Anargumentcouldbemadethatthisactcontainedmorethanonesectiondealingwithinsurance,totheextentthatenablingprovisionsforthepur-chaseofinsurancewerelistedamongthegeneraldutiesandpowersofthestratacorporation(seeibid,s14(1)(a)–(d)).



Second-generation act: 1974–2000 Thesecond-generationact147alsohadonlyasinglesectiononinsurance,butitslengthandscoperepresentedconsiderableexpansionsfromthefirst-generationact.148Thisprovisionspelledoutthemandateonstratacorporationstoobtainprop-ertyinsuranceandenabledstratacorporationstoobtainotherinsurance.Italsoen-abledthestrata-lotownerstoobtaininsurance.Finally,theactbegantoaddresscomplexquestionsabouttheinterrelationofstrata-corporationandowners’insur-anceandsetoutaprocedurefordealingwithcasesinwhichastratacorporationde-cidesnottorepairpropertydamage.Third-generation act: 2000–present Thethird-generationact,thatis,theStrataPropertyAct,hasadedicatedpart(part9)consistingof13sectionsdealingwithinsurance.149Soit’snotsurprisingthatpart9isconsideredtoexceedthepredecessorlegislationinitslevelofdetailandsophistication.150

The Strata Property Act’s Provisions on Insurance Property insurance required for strata corporation Scope of requirement TheStrataPropertyActrequiresstratacorporationstohave,ataminimum,twokindsofinsurance.151Thefirstispropertyinsurance,whichmustbeplacedonthefollowing:

147.SeeStrataTitlesAct,supranote26.

148.SeeStrataTitlesAct,ibid,s30.Overitstimeinforce,thisprovisionwasultimatelydividedintothreesections.SeeCondominiumAct,RSBC1996,c64,ss54–56.

149.Supranote3,ss149–162.SeealsoStrataPropertyRegulation,supranote4,ss9.1–9.3.

150.SeeAllysonBaker,“Whatastratacorporationneedstoknowaboutinsurance?,”CHOABulletin600-004(March2014)at1,online(pdf):CondominiumHomeOwnersAssociationofBritishCo-lumbia<www.choa.bc.ca/wp-content/uploads/pdf/600/600-004%20Insurance%20Sept%202014.pdf>[perma.cc/TZ74-BL54](“Althoughinsurancere-quirementshavealwaysformedapartofthelegislationgoverningcondominiums,Part9oftheStrataPropertyAct(theAct),inconjunctionwithPart9oftheStrataPropertyRegulation(theRegulation),spellsoutingreaterdetailtheminimumtypesandlevelsofinsurancethataStrataCorporationisrequiredtoobtain.”).

151.Seesupranote3,ss149–150.



• commonproperty;

• commonassets;

• buildingsshownonthestrataplan;and

• fixturesbuiltorinstalledonastratalot,ifthefixturesarebuiltorinstalledbytheownerdeveloperaspartoftheoriginalconstructiononthestratalot.152

Definition of “fixtures” Fixtures(referredtointhelastbulletpoint)isatermofart.Tounderstandwhatismeantbyitrequiresashortintroductiontoacornerofpropertylaw.There’safundamentaldistinctioninpropertylawbetweenlandandpersonalprop-erty.Inmostcases,it’sclearwhetheranitemofpropertyislandorpersonalproper-ty(orachattel,tousethetechnicalname).Butsometimesthebrightlinedividingthetwokindsofpropertycangetfuzzy.Fixturesareanexampleofthisphenome-non.Ifsomethingthatwouldordinarilybeclassifiedaspersonalpropertyis“suffi-cientlyattachedtotheland[thenit]maybetransformedintoa‘fixture,’therebyformingpartoftherealty.”153Thecommon-lawtestfordeterminingwhetherpropertyisafixtureiscomplex.154Legalacademicsandothershavecriticizedit.155So,probablyinanefforttoside-steptheuncertaintyoverthemeaningoffixtures,thetermisdefinedintheStrataProper-tyRegulation.Undertheregulation(forthepurposesofthissectiononpropertyin-

152.Ibid,s149(1).Theotherkindofinsurancethatastratacorporationmusthaveisliabilityinsur-

ance.See,below,at37–38.Commonpropertyandcommonassetsaredefinedterms.See,above,at12–15(discussionoftheact’sdefinitionsofcommonpropertyandcommonassets).

153.BruceZiff,PrinciplesofPropertyLaw,6thed(Toronto:Carswell,2014)at117[footnoteomit-ted].

154.Seeibidat118(“Thedeterminationofwhetherachattelhasbeentransformedintoafixtureisamatterofintention,objectivelydetermined.Thatintentionisascertainedbyexaminingthede-greeandobject(sometimescalledpurpose)oftheannexation.Whenachattelisattachedtotheland,howeverslightly,arebuttablepresumptionisraisedthattheitemhasbecomeafixture.Theextentoftheattachmenttendstoaffectthestrengthofthatpresumption.Thepresumptionisreversedifthechattelisrestingonitsownweight;here,itwillbepresumedtoremainachat-tel.Thesolegroundfortherebuttalofthesetwopresumptionsistheobject/purposeofannexa-tion.Thetestiswhetherthepurposeofattachmentwas(a)toenhancetheland(whichleadstoaconclusionthatafixtureexists);or(b)forthebetteruseofthechattelasachattel.”[footnotesomitted]).

155.Seeibidat119(“Attemptstoreconcilethecaselawrelatingtotheapplicationofthelawoffix-turesseempointless.”[footnoteomitted]).



suranceandalatersectiononoptionalinsurancecoverage),156fixturesmeans“itemsattachedtoabuilding,includingfloorandwallcoveringsandelectricalandplumb-ingfixtures,butdoesnotinclude,iftheycanberemovedwithoutdamagetothebuilding,refrigerators,stoves,dishwashers,microwaves,washers,dryersorotheritems.”157Withthisdefinitioninplace,thetermfixturesendsupplayinganimportantroleindefiningthelimitsoftheproperty-insurancemandateonstratacorporations.Thestratacorporation’spropertyinsurancemustonlycoverthesefixtures“ifthefix-turesarebuiltorinstalledbytheownerdeveloperaspartoftheoriginalconstruc-tiononthestratalot.”Asacommentatornotes,“[t]hekeyconsiderationiswhetherthefixturewasin-stalledatthetimeoforiginalconstructionorduringaunitowner’ssubsequentren-ovations.”158Ifthefixturewasinstalledbytheowner-developerduringthestrataproperty’soriginalconstruction,thenit’sembracedwithintheact’smandateonstratacorporationstoobtainpropertyinsurance.Ifitwasn’t(because,forexample,it’sanupgrademadebyasubsequentstrata-lotowner),thenit’snotwithinthemandate’sscope.159Howthisdividinglinemaybelocatedinpracticeisspelledoutinanexamplegivenbyanothercommentator:

assumethatacarpetwasinstalledbytheownerdeveloperatthetimeoforiginalcon-struction.Damagetothatcarpet,clearlylocatedinastratalot,istheresponsibilityofthestratacorporationinsurer.However,ifthestratalotownerreplacesthecarpetthreeyearslaterwithabettercarpetorahardwoodfloor,thestratacorporationhasnore-sponsibilitytoinsurethatreplacementflooring,becauseitisnotafixtureinstalledaspartoftheoriginalconstruction.160

156.SeeStrataPropertyAct,supranote3,s149(2).

157.StrataPropertyRegulation,supranote4,s9.1(1).

158.RyanDix,“AnOverviewofStrataPropertyIssuesinBritishColumbia”(May2013)at5,online(pdf):DoldenWallaceFolickLLP<www.dolden.com/wp-content/uploads/2016/06/159-An-Overview-of-Strata-Property-Issues-in-British-Columbia-May-2013.pdf>[perma.cc/YX7X-8N37].

159.Notethatnotbeingwithinthemandatedoesn’tmeanthatastratacorporationmayneverinsurethesefixtures.Theactallowsastratacorporationtoplaceinsuranceon“fixturesbuiltorin-stalledonastratalotthatwerenotbuiltorinstalledbytheownerdeveloperaspartoftheorigi-nalconstructiononthestratalot”(supranote3,s152(b)).See,below,at37–39(discussionofotherinsuranceastratacorporationmayobtain).

160.BritishColumbiaStrataPropertyPracticeManual,supranote10at§15.4.SeealsoBaker,supranote150at3(“Ownersshouldbeawarethatalterationsandupgradesmadebypriorownersare



Thiscommentatoralsonotesthat,“[i]npractice,bothinsurersmaycontributetothereplacementorrestorationcosts,withthestratacorporation’sinsurercontributingtotheextentofthevalueoftheoriginalcarpetingandthestratalotowner’spolicycontributingthebalance.”161Full replacement value Thestratacorporation’spropertyinsurancemustbe“onthebasisoffullreplace-mentvalue.”162Fullreplacementvalue“isthecurrentcosttoreplacethedamageditem,withoutanydeductionfordepreciationorwearandtear.”163Although,strictlyspeaking,theactdoesn’trequireit,thissectionhastheeffectofmakingitstronglyadvisableforstratacorporationstoobtainanannualappraisalofthestrataproperty.164Otherwise,thestratacorporationcouldendupbeingunder-insuredbyfailingtocomplywiththisrequirementthatitspropertyinsurancebeonafull-replacement-valuebasis.Major perils Thestratacorporation’spropertyinsurancemust“insureagainstmajorperils...andanyotherperilsspecifiedinthebylaws.”165Majorperilsisdefinedintheregula-tion.Itmeans“theperilsoffire,lightning,smoke,windstorm,hail,explosion,waterescape,strikes,riotsorcivilcommotion,impactbyaircraftandvehicles,vandalismandmaliciousacts.”166

alsotypicallyexcludedfromtheStrataCorporation’sinsurancecoverage.”[emphasisinorigi-nal]).

161.BritishColumbiaStrataPropertyPracticeManual,supranote10at§15.20.

162.StrataPropertyAct,supranote3,s149(4)(a).


164.Seeibid(“Whatconstitutesfullreplacementvaluecanonlybeassessedbyconsultingaqualifiedinsuranceappraiser.”).

165.SeeStrataPropertyAct,supranote3,s149(4)(b).SeealsoBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.6(“A‘peril’canbedescribedasacauseofpropertydam-age.”).

166.Supranote4,s9.1(2).



Liability insurance required for strata corporation Description of the legislation Thestratacorporationmustalsohaveinsurance“againstliabilityforpropertydam-ageandbodilyinjury.”167“Liabilityinsurance,”notesacommentator,“isintendedtodefendandindemnifytheinsuredwithrespecttoclaimsbroughtagainsttheinsuredforinjuryordamagetothepersonorpropertyofathirdpartycausedbyanaccidentornegligence.”168Thesourcesofsuchliabilityarewide-ranging.169Thesesourcesandtheirpotentialtogeneratehigh-valueclaimswillvarywiththetypesofbuildingsthatcomprisethestratapropertyandtheactivitiescarriedonatthestrataproperty.170Thestratacorporation’sliabilityinsurancemustprovidecoverageforatleast$2000000.171Incasesinwhichbothofthestratacorporation’smandatedinsurancepoliciesmayrespondtoaclaim,“[m]ostpoliciesrequirethatastratacorporation

167.StrataPropertyAct,supranote3,s150(1).SeealsoBritishColumbiaStrataPropertyPractice

Manual,supranote10at§15.9(“TheActdoesnotprovideadefinitionofeither[propertydam-ageorbodilyinjury].However,bothareusuallydefinedtermsininsurancepolicies.Whiletheexactdefinitionwillvarybypolicywording,fromaninsuranceperspective,‘propertydamage’istypicallydefinedasdamagetotangibleproperty,while‘bodilyinjury’istypicallydefinedtoin-cludeinjuries,sickness,anddisease.”).

168.BritishColumbiaStrataPropertyPracticeManual,ibidat§15.9.

169.SeeThomasJHakala,“CondominiumCasualtyandLiabilityInsurance”(1974)48:4StJohn’sLRev1112at1119(“Sourcesofliabilityarenotdifficulttoforesee.Besidestheusualexposuretotortactionsfromordinarylicenseesandinvitees,theassociationmaybesubjecttoliabilityforinjuriesincurredinconnectionwitheverythingfromthenegligentoperationofcondominiumownedvehiclestoproductdefectsinfooditemsdispensedfromon-premisesvendingmachines.Inlargedevelopmentsequippedwithswimmingpools,restaurants,healthclubs,andplayareas,thesourcesofliabilitywillbeproportionatelymultiplied.Itisapparentthatinallcasesthesourcesofliabilityextendwellbeyondthelimitsofpersonalconductandcareoftheindividualunitowner.”[footnotesomitted]).

170.SeeBonnieSElster,“InsuranceandStrataCorporations,”inStrataProperty—2006Update,supranote375.1.1at5.1.3(“Astratacorporationwouldbewelladvisedtoconsiderobtaininghighercoveragelimits,especiallyifithasrecreationfacilities,suchasaswimmingpool.”).

171.SeeStrataPropertyAct,supranote3,s150(2);StrataPropertyRegulation,supranote4,s9.2.SeealsoBaker,supranote150at2(“[I]ncreasingtheamountofliabilitycoveragefrom$2milliontosomehigherfiguretypicallyresultsinonlyamodestincreaseinpremiumand,asaresult,moststratacorporationsobtainliabilityinsurancecoveragelimitsofatleast$5million.Asthedamagesfromasignificantorcatastrophicinjuryclaimcanexceed$2million,stratacor-porationsarewelladvisedtoconsiderobtaininghighercoveragelimits.”).



mustfirstcalluponitspropertyinsurancebeforethecorporation’sliabilityinsur-ancerespondstotheclaim.”172Other insurance a strata corporation may obtain Description of the legislation TheStrataPropertyActdoesn’tplaceanylimitsontheinsurancethatastratacorpo-rationmaywishtoobtain.173Apartfromthepropertyinsuranceandliabilityinsur-ancethatstratacorporationsaremandatedtoobtain,therearemanyotherkindsofinsurancepoliciesthatmayappealtoagivenstratacorporation.OnesuchpolicyismentionedbynameintheStrataPropertyAct.Theactenablesastratacorporationtoobtaindirectors-and-officerscoverage.174“ThepurposeofD&Oinsurance,”explainsaleadingpracticeguide,“istodefendandindemnifywhereaclaimhasbeenmadeagainstastratacouncilmember(typicallybyoneormorestra-talotownersorbythestratacorporationitself)asaresultofmismanagementorer-rorintheexerciseofthemember’sdutiesoncouncil.”175Further,“[t]heinsuranceisintendedtorespondtonegligenceor‘honest’mistakesmadebystratacouncilmem-bersandthereforewillnotrespondwherethememberhasdeliberatelyorreckless-lycausedaloss.”176TheStrataPropertyActalsoexpresslyenablesstratacorporationstoobtaincover-age,iftheywish,forthefollowing:

• aperilorliabilityofthestratacorporationthatisnotreferredtoinsection149[re-quiringstratacorporationtohavepropertyinsurance]or150[requiringstratacor-porationtohaveliabilityinsurance];

• fixturesbuiltorinstalledonastratalotthatwerenotbuiltorinstalledbytheownerdeveloperaspartoftheoriginalconstructiononthestratalot.177

172.Mangan,supranote37at253.

173.SeeBaker,supranote150at4(“TheActdoesnotlimittheStrataCorporation’soptionswithre-specttoinsurancecoverage.”).

174.Seesupranote3,s151(“Thestratacorporationmayobtainandmaintainerrorsandomissionsinsuranceforcouncilmembersagainsttheirliabilityandexpensesforerrorsandomissionsmadeintheexerciseoftheirpowersandperformanceoftheirdutiesascouncilmembers.”).

175.BritishColumbiaStrataPropertyPracticeManual,supranote10at§15.11.SeealsoColemanvGreatAmericanInsuranceCo,2010BCSC1796(extensiveconsiderationofstratacorporation’sdirectors-and-officerspolicy).


177.Supranote3,s152.



Thefirstbulletpointraisesotherkindsofinsurancepoliciesthatastratacorpora-tionmaywanttohave.Onecommentatorlistsseveralkindsofpoliciesasbeingamong“commonformsofoptionalcoverage”:

• Boilerandmachineryinsurance(torespondtoclaimsarisingfromtheStrataCorpo-ration’sboilerorothermechanicalorelectricalequipment);

• Crimeinsurance(torespondtoclaimsformisappropriationoffundsbytheStrataCorporation’sagentsandemployees);

• Glasscoverage;

...

• Pollutioncoverage.178Thiscommentatornotesthatstratacorporationsmayalsorelyontheact’senablingprovisionfor“expandingcoveragetoaddresscommonexclusionsinpropertyandliabilitypolicies”—citingcoveragefor“earthquakesorfloods”asanexample.179Thesecondpartoftheenablingprovisionallowsastratacorporationtoobtaincov-eragefor“fixturesbuiltorinstalledonastratalotthatwerenotbuiltorinstalledbytheownerdeveloperaspartoftheoriginalconstructiononthestratalot.”180Thislanguagetiesintothelegislativemandatetoobtainpropertyinsurance,whichislim-itedtothosefixturesthatwerebuiltorinstalledbytheowner-developeraspartoftheoriginalconstructiononthestratalot.Here,theactisallowingastratacorpora-tiontodecideifitwantscoverageinexcessofwhatthemandaterequires.181Strata corporation has an insurable interest in property it must insure Description of the legislation “InCanada,”asaninsurance-lawtextbookputsit,“anagreementwhichpurportstobeaninsurancecontractisnotlegallyenforceableunlesstheinsuredhasaninsura-bleinterestinthesubject-matteroftheinsurance.”182178.Baker,supranote150at5.

179.Ibidat4.

180.Supranote3,s152(b).

181.See,above,at34–36(discussionofthedefinitionoffixturesanditsroleindeterminingthescopeofthelegislativemandate).

182.Billingsley,supranote126at35[footnoteomitted].



Thisrequirementisdesignedtoachievethreegoals,allofwhichflowfromthelargerobjectiveofdifferentiatingbetweenawagerandaninsurancecontract:(1)topreservethepublicpolicyagainstwagering;(2)topreservetheprincipleofindemnity(i.e.,thattheinsuredshouldnotprofituponalossoccurring);and(3)topreventtheinsuredfrombeingtemptedtodestroytheinsuredpropertyortootherwiseintentionallybringabouttheinsured-againstrisk.183

Thetestsfordeterminingwhetheraninsurableinterestispresentcanvarywiththetypeofinsuranceatissue.184Herearethetestsforpropertyinsuranceandliabilityinsurance,thetwotypesofinsurancethattheactmandatesastratacorporationtohave:

• forpropertyinsurance,it’snecessarytohave“moralcertaintyofadvantageorbenefit”fromtheproperty;185

• forliabilityinsurance,“[t]heriskinsuredinaliabilityinsurancecontract—liabilitytothirdparties—isitselfaninterest.”186

Inthestrata-propertyfield,theconcernsraisedbyinsurableinterestrelatemainlytopropertyinsurance.Eventhoughastratacorporationisrequiredtoinsureprop-ertythatitdoesn’town,187anargumentcouldbemadethatitwouldhaveaninsura-bleinterestunderthetestforpropertyinsurance.188Butit’sfarfromabsolutelycer-tainthatthisargumentwouldsucceedinallcases.Rightfromtheinceptionofstratapropertiesinthe1960s,commentatorshavepointedoutthatthelawoninsurableinterestcouldposeseriousproblemsforanylegislativemodelthatreliedonthestratacorporationobtainingpropertyinsur-

183.Ibidat35–36[footnotesomitted].

184.SeeBrown,supranote1at§4.2.

185.KosmopoulosvConstitutionInsuranceCo,[1987]1SCR2at30,34DLR(4th)208,WilsonJ(Beetz,Lamer,LeDain,andLaForestJJconcurring).

186.Brown,supranote1at§4.2(a)(iii).

187.SeeStrataPropertyAct,supranote3,s66(“Anownerownsthecommonpropertyandcommonassetsofthestratacorporationasatenantincommoninashareequaltotheunitentitlementoftheowner’sstratalotdividedbythetotalunitentitlementofallthestratalots.”).

188.Thisargumentcouldbebasedonthestratacorporation’sdutytorepairandmaintainthecom-monpropertyandcommonassets.SeeStrataPropertyAct,ibid,s72.SeealsoRohan,supranote136at1050.



ance.189Giventhedrasticconsequencesofrunningafoulofthelawoninsurablein-terest,theStrataPropertyActremovestheissuefromtherealmofargumentbyflat-lydeclaringthat“[t]hestratacorporationhasaninsurableinterestinanypropertyinsuredundersection149[propertyinsurancerequiredforstratacorporation]or152[optionalstrata-corporationinsurance].”190Strata corporation must review and report on insurance coverage Description of the legislation Theactimposestwoadministrativedutiesonthestratacorporation,asameanstopromotegoodgovernanceandaccountabilitytotheowners.First,thestratacorpo-rationmust“reviewannuallytheadequacyofthestratacorporation’sinsurance.”191Second,itmust“reportontheinsurancecoverageateachannualgeneralmeet-ing.”192Named insureds include strata corporation, owners, tenants, and occupiers Description of the legislation Theactprovidesthat“namedinsuredsinastratacorporation’sinsurancepolicyin-clude”thefollowing:

• thestratacorporation;

• theownersandtenantsfromtimetotimeofthestratalotsshownonthestrataplan;and

• thepersonswhonormallyoccupythestratalots.193Thisprovisionapplies“[d]espitethetermsoftheinsurancepolicy.”Ithastwoimpli-cationsforinsuranceinastrataproperty.Oneisobvious;theotherissubtleandmoredifficulttograsp.189.SeeRisk,supranote5at57(“Thepossibilitythattheassociationmayacquireinsuranceraises

theproblemofinsurableinterest.”[footnoteomitted]).


191.Seeibid,s154(a).SeealsoBaker,supranote150at8(listofsuggested“factorsaStrataCorpo-rationshouldtakeintoaccountinundertakingtheannualreview”).

192.Seesupranote3,s154(b).

193.Ibid,s155.



Clear identification of broad group of named insureds Theobviousimplicationofthissectionisthatitclearlysetsoutthebroadgroupthatmakesupthenamedinsuredsinastratacorporation’sinsurancepolicy.Anamedin-suredissimply“thepersonnamedinthecontractofinsuranceastheinsured.”194Anamedinsuredisentitledtoabenefitunderaninsurancepolicy,ifthatnamedin-suredhasavalidclaimunderit.Sothisprovisionmakesthepracticalpointthatabroadergroupthanjustthestratacorporationispotentiallyentitledtobenefitsun-derthepolicy.195Or,toputitanotherway,simplybecausethestratacorporationpaystheinsurancepremiumdoesn’tmeanthatthebenefitsunderthepolicyarelim-itedtothestratacorporation.The no-subrogation rule Thesubtlerpurposeofthisprovisionistoestablishwhatcommentatorshavecalledtheno-subrogationrule.196Inthisway,theprovisionishelpingtoplayanimportantroleinbridgingthedividebetweenfundamentalinsurance-lawandstrata-propertyconcepts.Subrogationis“[t]heprincipleunderwhichaninsurerthathaspaidalossunderaninsurancepolicyisentitledtoalltherightsandremediesbelongingtotheinsuredagainstathirdpartywithrespecttoanylosscoveredbythepolicy.”197Typically,themostimportantoftheserightsis“therighttosueawrongdoerwhocausedthelossinquestion.”198Inthisway,subrogationtiesintosomeofthedistinguishingprinci-plesofinsurancelaw.199

194.AXAInsurance(Canada)vOldRepublicInsuranceCo(1998),38OR(3d)630at637,[1998]OJ

No918(QL)(OntGenDiv),LaxJ.SeealsoMangan,supranote37at228(“Anamedinsuredisapersonthattheinsurancepolicydesignatesastheinsured,bycontrasttosomeonewhomaybecoveredbythepolicybutwhoisnotexplicitlynamed.”[emphasisinoriginal]).

195.SeeBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.15(“Thereisacom-monmisconceptionamongcouncils,stratamanagers,andstratalotownersthatonlythestratacorporationitselfisentitledtoaccessthebenefitsofastratacorporation’sinsurancepolicy.”).

196.Seeibidat§15.9;Dix,supranote158at19–20.

197.BryanAGarner,ed,Black’sLawDictionary,10thed(St.Paul:ThomsonReuters,2014)subverbo“subrogation.”


199.See,above,at28–29.



Courtshaveestablishedthatthemainrationaleofsubrogationistosupportthein-demnityprinciple.Asaleadingcaseputit,“avoidingoverpaymentoftheinsuredisthebasisforsubrogation.”200Subrogationalsosupportstheprincipleofgoodfaith.201Butsubrogationisn’tanironlawthatappliesinallcases.Instead,asacommentatornotes,the“lawofsubrogationiscomplexandprovidesforcertainexceptions.”202Animportant“exceptiontotheinsurer’srightofsubrogationoccurswheretheinsuredaccidentallycausesthelossinquestion.”203Howdoesthiscomplexinterplayofruleandexceptionapplytoastrataproperty,whichhasitsowncomplicatedsetofmultipleownershipinterests?Aparticularproblemhereiswhattodowithanownerwhohascauseddamagetotheowner’sstratalotandotherstratalotsorcommonproperty.Anargumentcouldbemadethatthebasicprinciplesofsubrogationshouldprotectthisownerfromasubrogatedclaim.204Butsimplyleavingthemattertobesortedoutinaccordancewiththoseprinciplescouldleadtouncertaintyandconfusion.205Itwouldalsoimposeunneces-sarycostsandunwantedlitigationonthepartiestoinsuranceinthestrata-propertysector.206Inordertoavoidtheseproblems,theStrataPropertyActensuresthatabroadgroupofpeoplewithinastratapropertyhavethebenefitofbeingprotectedagainstsubro-gatedclaims.Itachievesthisresultbydeclaringalistofpersonstobenamedin-sureds.Becausetheyareconsideredbylawtobenamedinsureds,stratacorpora-tions,strata-lotowners,tenants,and“thepersonswhonormallyoccupythestratalots”arebroughtwithinanexceptiontothelawonsubrogation.207

200.CondominiumCorpNo9813678vStatesmanCorp,2007ABCA216atpara27[Statesman],

CôtéJA,leavetoappealtoSCCrefused,[2007]SCCANo456(QL).

201.Seeibid(“reducesthemoralriskofdishonestybytheinsured”).


203.Ibid.

204.SeeStatesman,supranote200atparas46–57;Rohan,supranote136at1070–1072.

205.SeeRohan,ibidat1070.

206.SeeStatesman,supranote200atparas33–35;Owners,StrataPlanNoNW651vBeck’sMechani-calLtd(1980),20BCLR12at16,[1980]BCJNo46(QL)(SC).

207.StrataPropertyAct,supranote3,s155.SeealsoMangan,supranote37at243(“Suppose,forex-ample,thatanowneraccidentallycausesalosscoveredbythestratacorporation’sinsurance,andtheinsurerthenpaysthestratacorporation’slossinaccordancewiththeinsurancepolicy,subjecttoanydeductibleandthepolicylimits.Whilenormallytheinsurercouldrelyonthein-



Payment and application of insurance money Description of the legislation Ifastratacorporationbecomesentitledtoapaymentofinsurancemoney208underapolicy,thentheStrataPropertyActrequiresthatthemoneybepaidintrustasfol-lows:

• totheorderoftheinsurancetrusteedesignatedbythebylaws,or

• ifaninsurancetrusteeisnotdesignated,totheorderofthestratacorporationtobeheldintrustuntilpaidoutundersection157.209

Section157requiresthat,wheninsurancemoneyisreceived“withrespecttodam-agedproperty,”thatmoneymustintheordinarycoursebe“usedtorepairorreplacethedamagedpropertywithoutdelay.”210Theexceptiontosection157isforcasesinwhichthestratacorporationdecidesnottorepairorreplacedamagedproperty.Suchadecisionmustbetaken“byaresolu-tionpassedbya3/4voteatanannualorspecialgeneralmeetingheldnolaterthan60daysafterthereceiptofthemoneyreferredtoinsection156.”211Ifaresolutionispassedundersection157,thentheinsurancetrusteeorstratacor-poration(asthecasemaybe)holdstheinsurancemoneyastrustee“foreachpersonwhohasaninterestinthemoney,includingtheholderofaregisteredcharge.”212Themoneymustbedistributed“accordingtoeachperson’sinterest,”213unlessan

surer’srightofsubrogationtosuethewrongdoer,inthiscase,theinsurercannot.Why?Becausethewrongdoerisanownerandbyvirtueofsection155oftheStrataPropertyAct,anownerisanamedinsuredunderthestratacorporation’sinsurancepolicy.”).

208.SeeInsuranceAct,supranote9,s1“insurancemoney”(“meanstheamountpayablebyaninsur-erunderacontract,andincludesallbenefits,surplus,profits,dividends,bonusesandannuitiespayableunderthecontract”).


210.Ibid,s157.

211.Ibid,s159(1).

212.Ibid,s159(2).

213.Ibid,s159(2)(a).



interestedpersonobtainsacourtorderundertheact’sextensiveenablingprovi-sion.214Theseprovisionsarealegislativeresponsetoaproblemidentifiedearlyon:howtoensurethatthevariousinterestsinastrataproperty—includingmortgagees—areallgivenadequateprotectionintheapplicationofinsurancemoney.215Deductible Insurance deductible is characterized as a common expense Asaleadingcaseonceputit,therealitiesoftheinsurancemarketdictatethatastra-tacorporation’sinsurance“isinvariablysubjecttoadeductible.”216Adeductibleissimply“theportionofthelossthattheinsuredmustpay”firstbeforecollectinganyinsurancemoney.217“Insurersusedeductibles,”asacommentatorhasexplained,“toreducetheiradministrationcostsandobtainpremiumsavingsforpolicyholders.”218Asastartingplaceontheroledeductiblesplaywithintheinsurancesystemforstra-taproperties,theactprovidesthat“thepaymentofaninsurancedeductibleinre-

214.Ibid,s160(“Ifthestratacorporationdecidesnottorepairorreplacethedamagedpropertyand

thestrataplanisnotcancelled,anyofthefollowingpersonsmayapplytotheSupremeCourtforanorderunderthissection:(a)anowner;(b)theholderofaregisteredchargeagainstastratalot;(c)aninsureroflandshownonthestrataplan;(d)anyotherpersonthecourtconsidersanappropriateperson.(2)Onapplicationbyapersonreferredtoinsubsection(1),thecourtmay,byorder,implementaschemetodooneormoreofthefollowing:(a)rebuildsomeorallofthedamagedpropertyortomakesomeotheruseoftheland;(b)providefortheinterestsoftheownersandregisteredchargeholdersonajustandequitablebasis.(3)Thecourtmaymakeanyorderitconsidersadvisabletogiveeffecttothescheme,including,withoutlimitation,orderswithrespectto(a)thepaymentofinsurancemoneyreceivedbythestratacorporation,(b)thedischargeoftheliabilitiesofthestratacorporation,thepersonsliabletocontributetothedis-chargeandtheirshareoftheliability,(c)theamendmentofthestrataplan,(d)thetransferorconveyanceoftheinterestofownerswhosestratalotshavebeenwhollyorpartiallydestroyedtotheotherownersinproportiontotheunitentitlementsofthestratalotsoftheotherowners,andforthecompensationoftheownerswhoseinterestshavebeentransferredorconveyed,(e)thesaleoflandshownonthestrataplan,orthesaleofthecommonassets,and(f)thedistri-butionofanyofthecommonassetsofthestratacorporation.”).

215.SeeRohan,supranote136at1053–1057.

216.Stevens,supranote135at453.SeealsoBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.24(“Asacommercialreality,moststratacorporationinsurancepolicieshavede-ductiblesthatapplytothevariouscoveragesunderthepolicy.”).


218.Ibid.



spectofaclaimonthestratacorporation’sinsuranceisacommonexpense.”219Thismeansthatpaymentofaninsurancedeductibleispresumptivelysomethingthatalltheownersareresponsiblefor,“tobecontributedtobymeansofstratafees.”220Strata corporation may recover deductible payment from responsible owner Buttheactdoesn’tstopatcharacterizinganinsurancedeductibleasacommonex-pense.Itgoesontoprovidethatnothingaboutthischaracterization“limit[s]theca-pacityofthestratacorporationtosueanownerinordertorecoverthedeductibleportionofaninsuranceclaimiftheownerisresponsibleforthelossordamagethatgaverisetotheclaim.”221Thisprovisionmeansthataresponsibleownermayulti-matelyendupbeingliableforaninsurancedeductible.Likemuchoftheframeworkforinsuranceinstrataproperties,thisprovisionfirstappearedintheStrataPropertyAct.Itsrationalehasbeendescribedasclarifyingthelaw.Thesubsection’spurposewasto“[set]outexpresslywhatwasnotpreviouslyaddressedbylegislation,butwasgovernedbycommonlaw.”222Theprovisionhasalsobeendescribedasdeterminingliabilityforaninsurancedeductible“byanalogytotheprevailingpracticeintheinsuranceindustry,whichistoshiftthedeductibleportionofthelosstothepartycausingthelossasameansofcontrollinginsuranceclaimsandinaccordancewiththeprovisionsofthebylawsandrulesoftheparticu-larstratacorporation.”223Commentatorshavenotedthatthisprovisionhaseffectivelybecomeadefaultprovi-sion.224Courtjudgmentsinterpretingtheprovisionappeartohaveleftthedoor


220.Ibid,s158(1).See,above,at20–23(generaldiscussionofcommonexpensesandunitentitle-ment).


222.TheOwnersStrataCorporationVR2673vComissiona,2000BCSC1240atpara22[Comissiona],LevineJ.

223.Dix,supranote158at26.Onthispointofinsurancelaw’sapproachtodeductibles,itshouldbenotedthatnothingsaidearlierabouttherulebarringsubrogatedclaimswouldapplytoastratacorporation’sclaimagainstanownertorecoveraninsurancedeductible(see,above,at42–43).SeeMangan,supranote37at243–244.

224.SeeDix,supranote158at26(“Thereisnouniversalrule,however,andstratacorporationsmaydesigntheirownparticularscheme.”).



openforstratacorporationstobecomeactiveinthisareabyamendingtheirby-laws.225Whatthishasmeantinpracticeisthatastratacorporationmayapparentlychoosetoadoptan“indemnitybylaw.”226Thewordingofthisbylawcanhaveasignificantpracticaleffectonlitigationoverliabilitytopayaninsurancedeductible.Asseveralcourtcaseshaverevealed,many“indemnitybylaws”usewordsotherthanresponsi-bletodescribewhenanownerwillbeliableforadeductible.Acommentatorhasex-plainedthattheleadingcaseshavedecidedthat“theword‘responsible’hadabroadermeaningthanthelegalconceptof‘causation’(whichwouldberequiredtoprovenegligence)....”227Sowhilethesebylawshaveprovedtobeattractivetostratacorporations,astheyappeartoholdouttheprospectofestablishingliabilityforaninsurancedeductiblewithouttheneedforacourtortribunalproceeding,228judgmentshaveshownthatreferencestotermslikenegligencecanbeenforcedagainstastratacorporation,re-quiringittoclearahigherlegalhurdlethanmereresponsibilitytoestablishliabil-ity.229225.SeeStrataPlanLMS2835vMari(8December2006),Vancouver2004-05746(BCProvCt),aff’d

2007BCSC740[Mari];StrataPlanVR360vJauhar,2016BCPC238[Jauhar];WawanesaMutualInsuranceCovKeiran,2007BCSC727[Keiran];Comissiona,supranote222.SeealsoStevens,su-pranote135at454(“Finally,wewouldobservethatfromapolicypointofview,wewouldre-jecttheanalysisofthemotionscourtjudgewhichhastheeffectofimposingaparticularregimeuponallcondominiums.Asignificantfeatureofthatschemeistheimpositionofsharedliabilitybytheownersforalldeductiblesasthecondominiumcorporationitselfcallonlysatisfyaliabil-ityimposeduponitbyrequiringtheownerstocontributetothecommonexpenses.Theforcedsharingofthedeductibledeprivestheownersasagroupofthediscipliningeffectadeductiblehasuponclaims.Whiletheeffectoftheresultwereachistoopenthepossibilitythatclaimswillbemadeasbetweenownersforthedeductible,acondominiummayavoidthatresultifitwishestodosobymakingappropriateprovisioninitsdeclaration,by-lawsorrules.Itseemstouspref-erabletoleavethequestionofliabilityfordeductibletobedeterminedinthiswaysothatcon-dominiumownersareabletodesignaschemeappropriatetotheirparticularneeds.”).


227.Ibidat§15.25,citingMari,supranote225;Jauhar,supranote225;Keiran,supranote225;Comissiona,supranote222.

228.SeeBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.25(“[M]oststratacorporationswouldprefertoavoidlawsuitsandsimplychargetheamountclaimed(beitthedeductibleorotherinsuredamount)againsttheowner’sstratalot;intheabsenceofabylaw,charginganownertocollecttheuninsuredamountmaynotbejustifiable....”).

229.Seeibid(“Forexample,ifanindemnitybylawadoptedbythestratacorporationreferstoclaimsagainstanownerforonlynegligenceorcarelessness,aclaiminstrictliabilityagainsttheownermaybeprecluded.”).SeealsoStrataPlanLMS2446vMorrison,2011BCPC519[Morrison].ButseeNacht,supranote117atpara22(castingdoubtonthecontinuedvalidityoftheconcluding



Strata corporation approval not required for payment of deductible Finally,thelegislationoninsurancedeductiblesconcludesbyaddressingstrata-corporationdecision-making.Asanoverridingrule,theactprovidesthat“stratacorporationapprovalisnotrequiredforaspeciallevyorforanexpenditurefromthecontingencyreservefundtocoveraninsurancedeductiblerequiredtobepaidbythestratacorporationtorepairorreplacedamagedproperty.”230Thisrulerepre-sentsadeparturefromtheact’sbasicprovisionsondecision-makingandgovern-ance,whichgenerallycallforspecialleviesandpaymentsoutofthecontingencyre-servefundtobeapprovedbyaresolutionpassedbya3/4vote.231Thedepartureappearstobejustifiedbythevitalinterestinhavingrepairsdone(recallthatade-ductiblemustbepaidfirst,beforeanyinsurancemoneymayflowtothestratacor-poration).But“[p]riorapprovalisnecessary,”asacommentatornotes,“whereastratacorporationhaspreviouslydecided,inaccordancewiththeStrataPropertyAct,tonotrepairorreplacethedamagedpropertyinquestion.”232Owner’s insurance Description of the legislation Inadditiontothestratacorporation,astrata-lotownerisalsoentitledtoobtainpropertyandliabilityinsurance.Toaddresspotentialconcernsaboutduplicatingcoverageobtainedthroughthestratacorporation’sinsurance,theStrataPropertyActdealswiththescopeofcoverageavailabletoanowner.233Undertherelevantprovision,astrata-lotownerisentitledto“obtainandmaintaininsuranceforanyorallofthefollowing”:

• lossordamagetotheowner’sstratalotandthefixturesreferredtoinsec-tion149(1)(d)

clauseinthetextbystatingthefollowingquestionsoflawtobedeterminedinsubsequentsu-preme-courtproceeding:“(a)Cantheby-lawsofastratacorporationservetonarrowtheappli-cationofs.158(2)oftheStrataPropertyAct,S.B.C.1998,c.43?...(c)ShouldthedecisionoftheProvincialCourtinStrataPlanLMS2446v.Morrison,2011BCPC519haveapplication?”).

230.Supranote3,s158(3).Thisprovisionapplies“[d]espiteanyothersectionofthisActorthereg-ulations,”butdoesn’tapplywhenthe“stratacorporationhasdecidednottorepairorreplaceundersection159”(ibid,s158(3)).SeealsoWongvTheOwners,StrataPlanLMS2461,2018BCCRT255(provisiondoesn’textendtospeciallevytotopupcontingencyreservefundaf-terpaymentofinsurancedeductible).

231.See,above,at16–20(generaldiscussionofstrata-corporationgovernance).

232.SeeMangan,supranote37at240.SeealsoStrataPropertyAct,supranote3,ss158(3),159.

233.Seeibid,s161.



o againstperilsthatarenotinsuredbythestratacorporation,and

o foramountsthatareinexcessofamountsinsuredbythestratacorporation;

• fixturesintheowner’sstratalot,otherthanthefixturesreferredtoinsec-tion149(1)(d);

• improvementstofixturesreferredtoinsection149(1)(d);

• lossofrentalvalueoftheowner’sstratalotinexcessofinsuranceobtainedandmaintainedbythestratacorporation;

• liabilityforpropertydamageandbodilyinjury,whetheroccurringontheowner’sstratalotoronthecommonproperty.234

The“fixturesreferredtoinsection149(1)(d)”are“fixturesbuiltorinstalledonastratalot,ifthefixturesarebuiltorinstalledbytheownerdeveloperaspartoftheoriginalconstructiononthestratalot,”withfixturesdefinedintheregulationtomean“itemsattachedtoabuilding,includingfloorandwallcoveringsandelectricalandplumbingfixtures,butdoesnotinclude,iftheycanberemovedwithoutdamagetothebuilding,refrigerators,stoves,dishwashers,microwaves,washers,dryersorotheritems.”235Theintentofthisprovisionistocoordinatecoveragebetweenthestratacorporationandstrata-lotowners.It’smeanttoavoidovercoverageorduplicationsincoverage.Toachievethisresult,theprovisionreliesonthedefinitionoffixturestoactasadi-vidinglinebetweenthestratacorporation’spropertyinsuranceandtheowner’sin-surance.236Asacommentatorhasnoted,the“definitionwasdesignedtodifferenti-atebetween‘original’andsubsequently-installedfixtures,andwassupposedtoena-blethepropertyinsurersofthestratacorporationandthestrataunitownertobet-terappreciatetheirrespectiveindemnityobligations.”237Owners in bare-land strata plans Theactprovidesthatastrata-lotownerinabare-landstrataplanisentitledto“ob-tainandmaintaininsuranceonbuildingsorfixturesbuiltorinstalledonthestrata

234.Ibid,s161(1).


236.See,above,at34–36(discussionofthedefinitionoffixturesandthescopeofastratacorpora-tion’sinsurancecoverage).

237.Dix,supranote158at4.



lot.”238Thisprovisionowesitsexistencetothespecialfeaturesofbare-landstrataplans.239Astheleadingpracticeguidepointsout,“[t]heobligationofastratacorporationtoinsurestratalotsinabarelandstrataplanismorelimitedthanisthecaseinacon-ventionalstrataplan.”240Thisisbecauseinmostbare-landstrataplans“[t]hedwell-ingsandotherbuildingsconstructedonthestratalotarenotdepictedonthestrataplan.”Thisfacttakesthemoutsidethescopeofthelegislativemandateonastratacorporationtoobtainpropertyinsurance.241Inrecognitionoftheselimitationsonthemandateplacedonstratacorporations,theactenablesstrata-lotownersinabare-landstrataplantoplayagreaterroleinob-taininginsurance.242Whiletherearepracticalconsiderationsthatsetthisarrange-mentapartfromthetypicalcaseinwhichastratacorporationinabuildingstrata


239.Seeibid,s1(1)“barelandstrataplan”(“means(a)astrataplanonwhichtheboundariesofthestratalotsaredefinedonahorizontalplanebyreferencetosurveymarkersandnotbyreferencetothefloors,wallsorceilingsofabuilding,or(b)anyotherstrataplandefinedbyregulationtobeabarelandstrataplan”)(noregulationshavebeenadoptedunderparagraph(b)).Seealso,above,at11(generaldiscussionofkindsofstrataplans).

240.BritishColumbiaStrataPropertyPracticeManual,supranote10at§15.4[cross-referenceomit-ted].

241.SeeStrataPropertyAct,supranote3,s149(1)(c)(legislativemandateapplyingto“buildingsshownonthestrataplan”).Theactalsoprovidesthatthepartofthemandaterelatingto“fix-turesbuiltorinstalledonastratalot,ifthefixturesarebuiltorinstalledbytheownerdeveloperaspartoftheoriginalconstructiononthestratalot”doesn’tapplytoabare-landstrataplan(seeibid,s149(3)).Allthissaid,onpaperastratacorporationshouldbeabletoinsurebuildingsonastratalotinabare-landstrataplanunderitspowertoobtain“optional”insurance(seeibid,s152).ButseeBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.27(not-ingthatastratacorporationthatobtainedsuchinsurancewouldfindittobeapoorfitwithitslegislativedutytorepairandmaintainpropertyinabare-landstrataplan).

242.Seesupranote3,s161(2)(“DespitethisAct,theInsuranceActoranyotherlaw,anownerofastratalotinabarelandstrataplanmayobtainandmaintaininsuranceonbuildingsorfixturesbuiltorinstalledonthestratalot.”).



planplacesinsurance,243thelegislationappearstogenerateresultsthatmeettheexpectationsofstrata-lotownersinbare-landstrataplans.244Contribution Description of the legislation Part9concludeswithaprovisionthatattemptstomanagethecompetingclaimsthatmayariseagainstastratacorporation’sandanowner’sinsurance.Thisprovisionoverridesanycontrarytermsinaninsurancepolicywithrespecttocontributionsintwosituations:

• first,“neitherthestratacorporation’sinsurancepolicynoranowner’sinsur-ancepolicyisliabletobebroughtintocontributionwithanotherpolicyun-lesstheotherpolicyisissuedonthesameproperty”;245

• second,“neitherthestratacorporation’sinsurancepolicynortheowner’sin-surancepolicyis‘otherinsurance’inrelationtoanotherpolicyunlesstheotherpolicyisissuedonthesameproperty.”246

“Otherinsurance”isatermofartthatrefersto“aclauseintheinsurancecontractwhichredefinesthepolicycoveragewhereotherinsuranceisinplaceforagivenloss.”247

243.SeeBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.27(“Withstratalots

nottypicallycoveredbyabarelandstratacorporation’sinsurancepolicy,thepolicyislefttocoverthecommonpropertyonly.Stratacorporationsshouldbearinmindthatthecommonpropertyassociatedwithabarelandstrataplanoftenincludesroadways,fences,sewers,andotherservicesandutilities,andthattheavailabilityofinsurancefortheseitemsmustbeex-ploredwhenobtainingthecorporation’sinsurancecoverage.”).

244.SeeBritishColumbiaStrataPropertyPracticeManual,ibid(“Manybarelandstratalotsaresoldbytheownerdeveloperasundevelopedlots,whicharethendevelopedbytheownerofthelot.Thisarrangementcanleadtogreatvariationinthesizes,configurations,andmaterialsusedintheconstructionofthedwellings.Astheoriginalownerhasmuchmorecontroloverthestruc-turesbuiltonthestratalotthaninaconventionalstrataplan,requiringtheowner,ratherthanthestratacorporation,toinsurethestructuresavoidssignificantdisparitiesthatcouldarise,giventhatcommonexpensesareusuallydividedequallybythenumberofstratalots(unitenti-tlementsforabarelandstrataplanareoftensetatoneforeachstratalot).”[cross-referenceomitted]).

245.Supranote3,s162(a).

246.Ibid,s162(b).

247.Billingsley,supranote126at338–39,notingalsothat“[t]heintendedeffectofsuchan‘otherin-surance’clauseistolimittheinsurer’sindemnityobligationwhereanotherinsurancepolicyco-



verstheloss,suchthatthethresholdrequirementofoverlappingcoveragebetweenthepoliciesisnotmet”(ibidat339).



Chapter 4. Issues for Reform Introduction Thecommitteeexaminedeachoftheprovisionsofpart9oftheStrataPropertyActforpotentialissuesforreform.248Lookingdeeper,itdelvedintocommentaryontheact.Thecommittee’sresearchalsoledittomakecomparisonswithlegislationonstratapropertiesandinsuranceinforceelsewhereinCanada.249Finallythecommit-teeexaminedrecentreformworkinAlberta250andOntario.251Bothofthoseprov-inceshaverecentlycompletedmajorprojects,whichfeaturedsomeconsiderationofemergingissuesininsuranceforstrataproperties.Asaresultofthisreview,thecommitteedecidedtofocusattentiononissuesforre-forminthefollowingareas:

• theinsurancemandate;

• insurancedeductibles;

• namedinsureds;

• reportingandadministration;and

• thestandardunit.

Issues for Reform—The Insurance Mandate Thecoreofpart9oftheactistheinsurancemandate—thatis,thelegislativere-quirementthatstratacorporationsmustobtainpropertyandliabilityinsurance.Thisinsurancemandatehasbeenafeatureofthelegislationsincetheadventofthe

248.Seesupranote3,ss149–162.

249.Seesupranote32(listofCanadianstrata-propertylegislation).

250.SeeServiceAlberta,CondominiumPropertyActReview:ConsultationAnalysisReport(June2013),online:<open.alberta.ca>[perma.cc/874W-JPUE][AlbertaReport].

251.SeeCanada’sPublicPolicyForum,GrowingUp:Ontario’sCondominiumCommunitiesEnteraNewEra:CondominiumActReviewStageTwoSolutionsReport(Ottawa:Canada’sPublicPolicyForum,2013),online:<www.ppforum.ca>[perma.cc/2N5D-7VXN][OntarioStageTwoReport];Cana-da’sPublicPolicyForum,Ontario’sCondominiumActReview:StageOneFindingsReport(Ottawa:Canada’sPublicPolicyForum,2013),online:<www.ppforum.ca>[perma.cc/Q5NV-6MRL][On-tarioStageOneReport].



first-generationactin1966(forpropertyinsurance).252WiththeenactmentoftheStrataPropertyActthemandatewasexpandedtoincludeliabilityinsurance.253Theoverridingquestionforthecommitteeinthispartofthereportiswhethertheman-daterequiresfurtherexpansiontoaddressnewareasofconcernorperilscurrentlynotcoveredbyit.Should the Strata Property Act require strata corporations to obtain directors-and-officers insurance? Brief description of the issue Inthestrata-propertyfield,directors-and-officersinsuranceis“[i]nsurancethatprovidescoverageformembersof[stratacouncils]against‘wrongfulacts,’whichmightincludeactualorallegederrors,omissions,misleadingstatements,andneglectorbreachofdutyonthepartofthe[stratacouncil].”254Commentatorshavestressedtheimportanceofdirectors-and-officersinsurancecoverage.255TheStrataPropertyActpayssomeheedtothispoint,byenablingstratacorporationstopurchasethiscoverage.256EquivalentlegislationinotherpartsofCanadagoesevenfurtherthantheStrataPropertyAct.Fourprovinces’actsmandatedirectors-and-officersinsuranceforstra-tacorporations.257Inviewoftheacknowledgedimportanceofthistypeofcoverage,

252.Seesupranote25,s14(1)(a)(“Thedutiesofthestratacorporationincludethefollowing:(a)to

insureandkeepinsuredthebuildingtothereplacementvaluethereofagainstfireandotherrisksasmaybeprescribedunderthisAct,unlesstheownersbyunanimousorspecialresolutionotherwiseresolve....”).

253.Seesupranote3,s150.Anenablingprovisionspecificallymentioningliabilityinsurancewasapartofthesecond-generationact(seesupranote26,s30(1)(b)).

254.InsuranceBureauofCanada,Glossary(lastvisited8August2018)at16,online(pdf):InsuranceBureauofCanada<assets.ibc.ca/Documents/Resources/Glossary.pdf>[perma.cc/6S76-SY8S].

255.SeeMangan,supranote37at253(“Asapracticalmatter,however,D&Oinsuranceisnecessaryforstratacouncilmembers.”).

256.Seesupranote3,s151.

257.SeeAlberta:CondominiumPropertyAct,supranote32,s47(7)(“Inadditiontoplacingandmaintaininginsuranceundersubsection(1),acorporationshallplaceandmaintaininsuranceagainstthefollowing:(a)anyliabilityincurredbyamemberoftheboardoranofficerofthecorporationarisingoutofanyactionoromissionofthememberorofficerwithrespecttocarry-ingoutthefunctionsanddutiesofamemberorofficerexceptasaresultofafailuretocomplywithsection28(2);(b)anyliabilityincurredbythecorporationarisingoutofanyactionoromissionofamemberoftheboardoranofficerofthecorporationwithrespecttocarryingoutthefunctionsanddutiesofamemberorofficer”);Saskatchewan:TheCondominiumPropertyAct,



shouldBritishColumbiafollowtheseprovinces’leadandadddirectors-and-officersinsurancetoitslegislativemandate?Discussion of options for reform Theoptionsconsideredforthisissueboileddowntotwo:eitheradddirectors-and-officerscoveragetotheinsurancemandateorretainthestatusquo.Thecasefortreatingdirectors-and-officersinsurancelikepropertyandliabilityin-surancerestsonrecognizingthatittooprovidescoverageforasignificantareaofvulnerabilityforstratacorporations.Theactprovidesthatastratacorporationfunc-tionsthroughitscouncil.258Inthisrole,councilmembersareoftenfacedwithmak-ingdifficultdecisions,whichmustmeettherequisitestandardofcare.259Intheab-senceofdirectors-and-officerscoverage,theindividualswhomakeupthestratacouncilmaybepersonallyonthehookforerrorsandomissions.Iftheylackthere-sourcestocoveranylosses,thenthestratacorporationanditsconstituentowners(thepartiesthataremostlikelytohaveclaimsagainstcouncilmembers)260couldfindthemselvessufferingcostlylosses.

1993,supranote32,s65(9)(a)(iii)–(iv)(“Thecorporationshallobtainandmaintain:(a)insur-anceagainstitsliability...(iii)incurredbyamemberoftheboardoranofficerofthecorpora-tionarisingoutofanyactoromissionofthememberorofficerwithrespecttocarryingoutthefunctionsanddutiesofthememberorofficerunlessitisshownthatthememberorofficeractedinbadfaith;and(iv)incurredbyitarisingoutofanyactoromissionofamemberoftheboardoranofficerofthecorporationwithrespecttocarryingoutthefunctionsanddutiesofthememberorofficer”);Manitoba:TheCondominiumAct,supranote32,s187(2)(“Acondominiumcorporationmustobtainandmaintaininsurancefor(a)anyliabilityincurredbyadirectororof-ficerarisingoutofanyactoromissionbyhimorherwithrespecttocarryingouthisorherfunc-tionsandduties,exceptliabilitythatresultsfromabreachofhisorherdutytoacthonestlyandingoodfaithwithaviewtothebestinterestsofthecorporation;and(b)anyliabilityincurredbythecorporationarisingoutofanyactoromissionofadirectororofficerwithrespecttocarryingouthisorherfunctionsandduties.”);Ontario:CondominiumAct,1998,supranote32,s39(“Iftheinsuranceisreasonablyavailable,acorporationshallpurchaseandmaintaininsuranceforthebenefitofadirectororofficeragainstthemattersdescribedinclauses38(1)(a)and(b)ex-ceptinsuranceagainstaliability,cost,chargeorexpenseofthedirectororofficerincurredasaresultofabreachofthedutytoacthonestlyandingoodfaith.”).

258.Seesupranote3,ss4(“Thepowersanddutiesofthestratacorporationmustbeexercisedandperformedbyacouncil,unlessthisAct,theregulationsorthebylawsprovideotherwise.”),26(“SubjecttothisAct,theregulationsandthebylaws,thecouncilmustexercisethepowersandperformthedutiesofthestratacorporation,includingtheenforcementofbylawsandrules.”).

259.Seeibid,s31(“Inexercisingthepowersandperformingthedutiesofthestratacorporation,eachcouncilmembermust(a)acthonestlyandingoodfaithwithaviewtothebestinterestsofthestratacorporation,and(b)exercisethecare,diligenceandskillofareasonablyprudentper-sonincomparablecircumstances.”).

260.SeeBritishColumbiaStrataPropertyPracticeManual,supranote10at§15.11.



Amandatefordirectors-and-officerscoveragecouldalsohavebenefitsoutsidetheinsurancesphere.Itmighthelpwithrecruitmentofstrata-councilmembers,whomaybereassuredtoknowthatthelegislationrequiresthiscoverage.Thedisadvantagesofthisproposedreformarethatitcouldimposeaddedcostsonstratacorporationsandwouldlimittheirflexibilitytomakedecisionsoninsurancecoverage.Verysmallstratacorporations,inparticular,mightstrugglewithanaddi-tiontotheact’sinsurancemandate.Theseconsiderationscouldgivesupporttothestatusquo.Thecurrentprovisioncouldbeseenasstrikingtherightbalancebyenabling,butnotrequiring,directors-and-officersinsurance.Inthisway,ithelpsbringawarenesstotheissue,withoutbindingstratacorporationstoasinglesolution.The committee’s recommendation for reform Whilethecommitteeunderstoodtheconcernsregardingaddedcostsandrigidity,itdecidedthataddingdirectors-and-officerscoveragetotheinsurancemandatewouldonbalancebenefitthestrata-propertysector.Thecommitteeacceptedtheviewthatalackofthiscoveragecouldleaveastratacorporationanditsstratacouncilvulner-abletosignificantlosses.Inviewofthespecialpositionofverysmallstratacorporations,thecommitteedis-cussedproposinganexemptionthatwouldapplytothem.Whileitmaybepossibletodesignsuchanexemptionthecommitteewasn’tconvincedofthewisdomofthisapproach.Evensmallstratacorporationsmaybeexposedtolossesinthisarea.Theymayalsofinditmoredifficulttorecoverfromaloss.Thecommitteealsounderstandsthedirectors-and-officersinsuranceisrelativelyinexpensive,whichlimitstheconcernsaboutitsongoingcosttostratacorporations.Inaddition,thecommitteeunderstandsthat,underthecurrentlegislation,thevastmajorityofstratacorporationshaveoptedtohavedirectors-and-officerscoverage.Inthecommittee’sview,it’sworthwhiletohavethelegislationclosetheremaininggap.Thefactthatthemajorityofstratacorporationsshouldnotnoticeadifferencefromachangeinthelawwasseenasabenefitforthisproposal,asitwouldlimitanypotentialdisruptionflowingfromreform.Finally,itshouldbenotedthebulkofrespondentsinthepublicconsultationfa-vouredamendingtheacttorequirestratacorporationstoobtaindirectors-and-officersinsurance.



Thecommitteerecommends:1.TheStrataPropertyActshouldrequireastratacorporationtoobtaindirectors-and-officersinsurance.What amount of coverage should a strata corporation be required to obtain for its mandated directors-and-officers insurance? Brief description of the issue Thisissueflowsfromthepreviousone.HavingdecidedthattheStrataPropertyAct’sinsurancemandateshouldincludedirectors-and-officersinsurance,thecommitteerealizedthatalogicalfollow-upquestionwouldinvolveitsviewsontheamountofthatcoverage.Discussion of options for reform Proposalsinresponsetothisissuecouldbelimitless.Theissuecallsforcommitmenttoaspecificnumber.Thenumbershouldprovidereasonableguidancetostratacor-porationsonthelevelofcoverageneeded.Itshouldbeinanareainwhichadequatecoverageisavailablebutovercoverageisavoided.The committee’s recommendation for reform Inthecommittee’sview,thenumberthatwouldmeetthesecriteriais$2000000.Thisnumbermatchestheminimumamountofliabilitycoveragethatastratacorpo-rationmustobtain.261Whilethisproposalwassupportedbythemajorityofre-spondentsintheconsultation,itshouldbenotedthataminorityfavouredeitherhavingtheregulationsetoutalowerminimumamountofrequiredcoverageorhav-ingtheregulationbesilentonthisissue(effectivelyleavingtheamountofcoveragetoastratacorporation’sdiscretion).Thecommitteerecommends:2.Forthepurposesofsection151oftheStrataPropertyAct,thestratacorporationmustobtainandmaintaindirectors-and-officersinsuranceforaminimumamountof$2000000.

261.SeeStrataPropertyRegulation,supranote4s9.2.



Should the definition of “major perils” in the Strata Property Regulation be amended to include earthquakes? Brief description of the issue Thelegislativemandatetoinsurepropertyrequiresastratacorporationto“insureagainstmajorperils,assetoutintheregulations.”262Theregulationscontainalistofperilsthatmakeupitsdefinitionofmajorperils.263Thelistislong,butitisn’tcom-prehensive.Asonecommentatorhasnoted,“[e]arthquakecoverageisprobablythemostnotableomissionfromthelistofmajorperilsmandatedbytheAct.”264SinceearthquakesposearealthreattopropertyinmuchofBritishColumbia,shouldthelistofmajorperilsthatastratacorporationmustinsureagainstbeexpandedtoincludeearthquakes?Discussion of options for reform Thisissueposesayes-or-noquestionsimilartothatattheheartofthepreviousis-suerelatingtodirectors-and-officerscoverage.Therationaleforbringingearth-quakeswithinthemandateisthattheyrepresentanareaofsignificantvulnerabilityforstrataproperties.Further,stratacorporationsmightnotalwaysappreciatetherisksposedbyearthquakes.DiscussionsofearthquakesinBritishColumbiatendtorevolvearoundtheloomingdangerofagenerationalcatastrophicevent.Whilesuchanearthquakewouldbedevastating(andmaybeinevitable),it’salsoworthnotingthatBritishColumbiaisregularlysubjecttosmaller-scaleearthquakes.Thedamagecreatedbytheseearth-quakesmayescapepublicnoticebecauseitisn’twidespread.Thatsaid,arelativelysmallearthquakecouldeasilycausesignificantdamagetoanystratapropertiesun-luckyenoughtobelocatednearitsepicenter.Thedownsidesofmandatingearthquakecoveragearetheaddedcostsandreducedflexibilitysuchrequirementsimposeonstratacorporations.Earthquakeinsurancemaybeanexpensiveadditionalcostforstratacorporationswithhighdeductiblevalues.Dependingontheirlocation,geology,proximitytowaterandslope-failure

262.StrataPropertyAct,supranote3,s149(4)(b).

263.Seesupranote4,s9.1(2)(“theperilsoffire,lightning,smoke,windstorm,hail,explosion,waterescape,strikes,riotsorcivilcommotion,impactbyaircraftandvehicles,vandalismandmali-ciousacts”).

264.Baker,supranote150at2.



risks,andtypeofconstruction,andthecomplexexclusionscontainedwithinpoli-cies,theviewofthecommitteeiseachstratacorporationshouldintheirowninter-estassessthecost,risk,andtheexclusionstodetermineiftheyshouldpurchaseearthquakecoverage.Thethreatposedbyearthquakesisn’tdistributedevenlyacrossBritishColumbia.Whilecoastalareas(forexample)areatsignificantrisk,otherpartsoftheprovincearen’tsodangerouslyexposed.Stratacorporationsintheseareasmightresentbeingrequiredtopurchasecoverageforarisktheycouldrightlyperceiveasminimal.Finally,requiringearthquakecoveragewouldtakethedecisionoutofstratacorpo-rations’hands.Manystratacorporationsalreadyhaveearthquakecoverage.Anar-gumentcouldbemadethatstratacorporationsarebetterplacedthanlegislatorstodecideonthisfacetofinsurance.The committee’s recommendation for reform Thecommitteewrestledwiththisissue,notingthattherearegoodargumentsonbothsidesofit,informulatingitstentativerecommendationfortheconsultationpa-per.Thattentativerecommendationendedupbeingtheonlytentativerecommen-dationintheconsultationpaperthatfailedtoattractthesupportofamajorityofre-spondents.Inlightofthisconsultationresult,thecommitteetookacarefulsecondlookatthisissueasitdraftedthisreport.Thecommitteenotedthatasignificantminorityofconsultationrespondents(in-cludingrespondentsrepresentinglegalandinsuranceprofessionals)agreedwithitstentativerecommendation.But,thatsaid,amajoritydisagreed,oftencitingthecata-strophicresultsthatwouldaccruetoastratacorporationlackingthiscoverageintheaftermathofamajorearthquake.Thecommitteegavethispointfurtherconsiderationandrevisiteditsreasonsforini-tiallyproposingnottoextendthedefinitionofmajorperilstocoverearthquakes.Thosereasons,inbrief,weretheunequalgeographicdistributionofriskfromearth-quakesandtheviewthatthosestratacorporationsthatwereatriskhadalreadytakenstepstoprotectthemselves.Inthecommittee’sview,thesereasonscontinuedtoswaytheminfavourofnotextendingthedefinitionofmajorperils.Thecommitteecontinuedtobeconcernedaboutmandatinginsurancecoverageinareasthatareatalowriskofhavinganearthquake.Whileonpaperitmightbepos-sibletohavethemandateapplyonlyincertainpartsoftheprovince,thissolutionstruckthecommitteeascomplexandunappealing.Inthemain,strata-propertylawinBritishColumbiaappliesconsistentlytoallstratacorporations.Thecommittee



didn’tfavourmovingawayfromthatprincipletoaccommodateanexpansionoftheinsurancemandate.Inaddition,thecommitteenotedthatthevastmajorityofstratacorporationsinearthquakezonesalreadyhaveearthquakecoverage.Extendingthemandateinthiscasewouldn’tbeanalogoustoextendingitinthepreviousissue,whichconcerneddirectors-and-officersinsurance.Inthatcase,aplausibleargumentcouldbemadethattheholdoutsfromobtainingthiscoveragehavefailedtograsptherisksofman-agingastratacorporationinanincreasinglycomplexlegalenvironment.Stratacor-porationsthatdon’thaveearthquakeinsurance,ontheotherhand,aremorelikelytobelocatedinregionsoftheprovincethatrarelyseeearthquakes.Or,iftheyarelocatedinearthquakezones,somecombinationoftheirorganizationandtheinsur-anceproductsonofferhasstayedtheirhand.Anexampleofthisphenomenonisabare-landstratathatisfacedwithaninsuranceproductthatcontainscomplexex-clusions.Thecommitteewasreluctanttocreatealegislativemandatethatwouldon-ly,ineffect,respondtothesekindsofcases.Intheend,thecommitteeconcludedthatthedecisiontoobtainearthquakecoverageshouldcontinuetorestwithstratacorporations.Asnotedearlier,manystratacoun-cilsalreadydoobtainthiscoverage.Thecommitteealsonotedthatthereareave-nuesfortheownershiptodirectacounciltoobtainsuchcoverage.265Thecommitteerecommends:3.Thedefinitionof“majorperils”intheStrataPropertyRegulationshouldnotbeamendedtoincludeearthquakes.Should the definition of “major perils” in the Strata Property Regulation be amended to include overland flooding? Brief description of the issue Justasearthquakesareonesignificantperilnotcurrentlyincludedintheregula-tion’sdefinitionofmajorperils,sooverlandfloodingisaperilthatalsofindsitself

265.SeeStrataPropertyAct,supranote3,s27(1)(“Thestratacorporationmaydirectorrestrictthe

councilinitsexerciseofpowersandperformanceofdutiesbyaresolutionpassedbyamajorityvoteatanannualorspecialgeneralmeeting.”).Notealsothatastratacorporationthathadamendeditsbylawstolistearthquakesasaperiltobeinsuredagainstwouldalsohavetoobtainearthquakecoverage(seeibid,s149(4)(b)).



outsidethisdefinition.266Shouldthedefinitionbeexpandedtoincludeoverlandflooding?Discussion of options for reform Theoptionsforthisissuearesimilartothosediscussedintheprecedingissue.Likeearthquakes,floodsarecauseforconcerninmanypartsofBritishColumbia.Theycanbedevastatingtoproperty.Sothisisanotherareaofvulnerabilityformanystrataproperties,whichmaycallforextensionofmandatorycoverage.Butthedownsidesofrequiringcoverageisthatitwillcomewithcostsanditwillbindstratacorporationsacrosstheprovince.Stratacorporationsthatperceivethemselvesnottobeatriskforfloodingcouldresenthavingtopayforcoverage.The committee’s recommendation for reform Thecommittee’sconsiderationofthisissuetookonmanyofthepointsconsideredpreviouslyinrelationtoearthquakecoverage.Similartothecommittee’sdecisiononearthquakecoverage,thecommitteedecidedthatcoverageforoverlandfloodingshouldn’tberequired.Inthecommittee’sview,thereistoomuchvariationintheexposureofstratacorporationstoflooddamagetomakeitpartofthelegislativemandate.Further,thosestratacorporationsthataremostatriskappeartobelarge-lydecidingtoacquirethiscoverage.Asmallmajorityofconsultationrespondentsbackedthecommittee’sproposalonthisissue.Butasizableminorityfavouredaddingoverlandfloodingtothedefinitionofmajorperils.Thecommitteerecommends:

4.Thedefinitionof“majorperils”intheStrataPropertyRegulationshouldnotbeamendedtoincludeoverlandflooding.

Issues for Reform—Insurance Deductibles Introduction Inanutshell,theStrataPropertyActmakestwopointsaboutinsurancedeductibles:(1)aninsurancedeductible“isacommonexpensetobecontributedtobymeansof

266.Seesupranote4,s9.1(2).



stratafees”;and(2)nothingaboutthischaracterizationasacommonexpense“lim-it[s]thecapacityofthestratacorporationtosueanownerinordertorecoverthedeductibleportionofaninsuranceclaimiftheownerisresponsibleforthelossordamagethatgaverisetotheclaim.”267Althoughthelegislationdoesn’tmentionstra-ta-corporationbylaws,anunstatedthirdpointthatshouldbeborneinmindisthatmanystratacorporationshaveadoptedindemnitybylaws.Thesebylawspurporttoassignliabilityforaninsurancedeductibletoaresponsibleowner.Inmanycases,thelanguageofsuchbylawsuseswordsotherthanresponsibility.Forexample,manyrefertoanegligentowner.Thiswordingsetsadifferentstandardforliabilitythanthatfoundinthestatute,whichwillgoverninanystratacorporationwithsuchaby-law.268Thebulkofthecaselawdealingwithstratapropertiesandinsuranceinvolvesap-plyingthissection.269Claimsrelatingtotherecoveryofaninsurancedeductiblefromastrata-lotownerhavealsoappearedrepeatedlyindecisionsoftheCivilReso-lutionTribunal.270Inaddition,somecommentatorshaveharshlycriticizedthesec-tionanditsinterpretationbythecourtsandapplicationbystratacorporations,withonecallingtheprovision“oneofthemostmisunderstoodsectionsoftheStrataPropertyAct.”271

267.Supranote3,s158.Seealso,above,at45–48(generaldiscussionofinsurancedeductiblesfor

strataproperties).

268.See,above,at46–47.ButseeNacht,supranote117(allowingappealfromCivilResolutionTri-bunalonquestionsoflawconcerningeffectofindemnitybylawsandprecedentialvalueofMor-rison,supranote229).

269.SeeMari,supranote225;Jauhar,supranote225;Keiran,supranote225;Comissiona,supranote222;Morrison,supranote229.

270.SeeCrichtonvTheOwners,StrataPlanKAS431,2017BCCRT33;TheOwners,StrataPlanVR194vMacKinnon,2017BCCRT46;ZhangvTheOwners,StrataPlanBCS1039,2017BCCRT56;ClarkvTheOwners,StrataPlanLMS3938,2017BCCRT62;Daviesv.TheOwners,StrataPlan755,2017BCCRT71;TheOwners,StrataPlanVIS6634vBrown,2017BCCRT86;TheOwners,StrataPlanBCS1589vNacht,2017BCCRT88;GauthiervTheOwners,StrataPlanLMS2768,2018BCCRT6;KeithvTheOwners,StrataPlanK284,2018BCCRT49;TheOwners,StrataPlanNWS3429vOughton,2018BCCRT62;TheOwners,StrataPlanKAS1357vAmos,2018BCCRT105;TheOwn-ers,StrataPlanBCS354vLiang,2018BCCRT171;BowlesvTheOwners,StrataPlanNW227,2018BCCRT484;GrahamvTheOwners,StrataPlanK852,2018BCCRT619;TaylorvTheOwn-ers,StrataPlan1801,2018BCCRT925atparas134–141;RuanvTheOwners,StrataPlanBCS1964,2019BCCRT128.

271.Fanaken,supranote71at124.



ThereissimilarlegislationinforceinmostoftheprovincesandterritoriesofCana-da.272InAlbertaandOntario,thislegislationhasattractedtheattentionoflawre-formers.273Commentatorshavenotedthatamajorfactualcauseofthelitigationoverinsurancedeductibleshasbeenrisingdeductibles,especiallyforclaimsinvolv-ingwaterdamage.274Inframingitsownrecommendations,thecommitteeboreinmindtheexperienceoftheseotherjurisdictionsinwrestlingwithconcernsaboutdisputesoverinsurancedeductibles.Note on governance issues for stratas Readersshouldnotethatthereissomeoverlapbetweenthisreportandthecommit-tee’searlierConsultationPaperonGovernanceIssuesforStratasonthesubjectofin-surancedeductibles.Inthatearlierconsultationpaper,thecommitteeaskedforpub-liccommentonaseriesoftentativerecommendationsinvolvingexpandingthescopeofthestratacorporation’slien.275Thispubliccommenthasledthecommitteetoreexamineoneofitstentativerecommendations.Thetentativerecommendationatissueconcernedextendingthestratacorporation’slientoapplyincasesinwhichanamounthasbeenfoundbyacourt,anarbitrator,ortheCivilResolutionTribunaltobeowingtothestratacorporationwithrespecttoaninsurancedeductible.276Eventhoughthistentativerecommendationwassetoutin272.SeeAlberta:CondominiumPropertyAmendmentAct,2014,supranote32,s55(amendingsec-

tion81oftheCondominiumPropertyAct,supranote32,byrepealingpara(h)andsubstitutingnewpara(h),whichwillenableregulationsaddressinginsurance-deductibleissues),proposedamendmentstoCondominiumPropertyRegulation,supranote32(addingnewsection62.4—inforce1January2020);Saskatchewan:TheCondominiumPropertyAct,1993,supranote32,ss65(5)–(7);Manitoba:TheCondominiumAct,supranote32,s193(1)–(2);Ontario:Condomin-iumAct,1998,supranote32,s105(asamendedbyProtectingCondominiumOwnersAct,2015,supranote32,s91);NovaScotia:CondominiumAct,supranote32,s35(9);NewfoundlandandLabrador:CondominiumAct,2009,supranote32,s58;NorthwestTerritoriesandNunavut:Con-dominiumAct,supranote32,s22(1.2)–(1.4).

273.SeeAlbertaReport,supranote250at35–44;OntarioStageTwoReport,supranote251at24–25,27;OntarioStageOneReport,supranote251at28.

274.SeeGStephenHamilton,“Insurance2013,”inContinuingLegalEducationSocietyofBritishCo-lumbia,ed,StrataProperty—2013Update:MaterialspreparedfortheContinuingLegalEducationseminar,StrataProperty2013Update,heldinVancouver,B.C.,onApril18,2013(Vancouver:Con-tinuingLegalEducationSocietyofBritishColumbia,2013)1.1at1.1.5;Fanaken,supranote71at122.

275.Seesupranote17at49–54.SeealsoStrataPropertyAct,supranote3,s116.

276.Seesupranote17at54(tentativerecommendationno.(31):“TheStrataPropertyActshouldnotenableastratacorporationtoregisteralienonanowner’sstratalotforamountsowingwithre-specttoachargebackforaninsurancedeductibleorexpensesincurredduetodamagewhich



negativeterms(proposingnottoextendthelien),publiccommentonityieldedstrongsupportforachangeinthelaw.Inviewofthisstrongsupportforreform,thecommitteegaveseriousconsiderationtorevisingitspositionontheissue.Reflectiononthispubliccommentandonitsowndiscussionsregardinginsuranceissuesledthecommitteetoafinalrecommendationthatendorsesanextensionofthelien:“TheStrataPropertyActshouldenableastratacorporationtoregisteralienonanowner’sstratalotforamountsowingwithrespecttoachargebackforaninsurancedeductibleorexpensesincurredduetodamagewhicharelessthananinsurancedeductible,ifthechargebackhasbeenfoundvalidbyacourt,anarbitrator,ortheCivilResolutionTribunal.”277Theissuesdiscussedbelowshouldbereadinlightofthisrecommendation.Should the Strata Property Act expressly assign responsibility for an insurance deductible to a responsible owner? Brief description of the issue TheStrataPropertyAct’sprovisionsoninsurancedeductibleshavecreateduncer-taintyandlitigation.Inpart,thisisthenaturalresultofasystemthatappears(1)torelyinlargepartonathird-partydecision-makertoestablishliability(bycallingonastratacorporationto“sueanowner”toestablishliability)and(2)toimplicitlyin-vitestratacorporationstovarythestandardatwhichliabilitywillbeimposedbyamendingtheirbylaws.278SimilarissueswereatplayinOntario’sprojectonreformingitsstrata-propertylaw.AfternotingconcernsthatOntario’sactwas“unclearaboutwhopaysthecorpora-tion’sdeductibleforthedamagedproperty,”itwasrecommendedthat“[t]heActshouldprovidethatanownerisresponsibleforrepaircostsorthedeductibleunderthecorporation’sinsurancepolicy,whicheverislower,asaresultofdamagetooth-erunitsorthecommonelementscausedbyanactoromissionbytheunit’sownerorresident.”279ShouldBritishColumbiaadoptasimilarapproachasawaytodispeluncertaintyandpotentiallyreducelitigationoverinsurancedeductibles?

arelessthananinsurancedeductible,evenifthechargebackhasbeenfoundvalidbyacourtortheCivilResolutionTribunal.”).

277.SeeReportonGovernanceIssuesforStratas,supranote18at59.

278.SeeStrataPropertyAct,supranote3,s158(1)–(2).

279.OntarioStageTwoReport,supranote251at27.



Discussion of options for reform TheadvantagesofadoptingaproposalliketheonediscussedinOntariowerehintedatintheframingofthisissue.Themainvirtueoftheproposalisthatitwouldlend“greaterclarity”tothelaw.280Thespacethatthecurrentlawhasseeminglyprovid-edforstrata-corporationbylawstooccupyhascreatedmuchofthepresentuncer-tainty.Thatspacewouldeffectivelybeclosedoff,asanexpresslegislativeassign-mentofresponsibilitywouldeliminatetherationaleforthesebylaws.Thiswouldbringameasureofcertaintyandconsistencytothelaw.Itwouldalsolikelyhavetheeffectofcuttingdownonlitigationoverinsurancede-ductibles.Litigationtendstothriveonuncertainty.And,inthiscase,theneedforlit-igationisgivenaboostbytheexpressreferenceinthecurrentprovisiontosuingaresponsibleowner.Doingawaywiththatreferenceandsettingoutalegislativestandardforliabilityshouldsignificantlyreducetheincentivetolitigateissuescon-cerninginsurancedeductibles.Finally,it’sworthnotingthatversionsofthisproposalhavebeenadoptedinotherjurisdictions.InadditiontoOntario,281Saskatchewan282andManitoba283havelegis-280.Ibid.

281.SeeCondominiumAct,1998,supranote32,s105(3)(“ifanowner,alesseeofanowner,apersonresidingintheowner’sunitwiththepermissionorknowledgeoftheowner,oranyotherpersonorthingthatisprescribed,throughanactoromissioncausesdamagetoaunit,thecommonel-ementsortheassets,ifany,ofthecorporation,subjecttosubsection(3),andifthecorporationhasobtainedandmaintainedcoverageforthedamageunderaninsurancepolicy,theamountthatisthelesserofthecostofrepairingthedamageandthedeductiblelimitoftheinsurancepolicyshallbeaddedtothecontributiontothecommonexpensespayablefortheowner’sunit”).

282.SeeTheCondominiumPropertyAct,1993,supranote32,s65(“(5)Subjecttosubsection(6),ifaninsurancepolicyobtainedbythecorporationinaccordancewiththissectioncontainsadeducti-bleclausethatlimitstheamountpayablebytheinsurer,theportionofalossthatisexcludedfromcoverageisacommonexpense.(6)Iftheownerofaunit,orapersonresidingintheown-er’sunitwiththepermissionorknowledgeoftheowner,throughanactoromissioncausesdamagetoaunit,theamountdeterminedpursuanttosubsection(7)maybeaddedtothecom-monexpensespayablebytheownerofthatunit.(7)Forthepurposesofsubsection(6),theamountisthelesserof:(a)thecostofrepairingthedamagetotheunit;and(b)thedeductiblelimitoftheinsurancepolicyobtainedbythecorporation.”).

283.SeeTheCondominiumAct,supranote32,s193(“(1)Subjecttosubsection(2),ifaninsurancepolicyobtainedormaintainedbyacondominiumcorporationcontainsadeductibleclausethatlimitstheamountpayablebytheinsurer,theportionofalossthatisexcludedfromcoverageisacommonexpense.(2)If(a)damagetoaunitorthecommonelementsresultsfromanactoromissionofaunitownerorby(i)atenantorotheroccupantofhisorherunit,or(ii)apersonpermittedtobeonthepropertybytheunitownerorbyatenantorotheroccupantofhisorher



lationonthispoint.Albertahasrecentlyannouncedthatitplanstoimplementthisproposalinthenearfuture.284Apotentialdownsideofthisproposalistheeffectitcouldhaveonsomeowners.It’sclearthatmanystratacorporationsinBritishColumbiahavepropertyinsurancewithsomeveryhighdeductibles,particularlyforwaterdamage.Thesedeductiblesmaybetheresultofclaimshistory,marketconditions,orsimplytherealitiesofliv-inginalarge,high-risebuilding.Aresponsibleownerwhoendsuponthehookforsuchadeductiblecouldbefacedwithacripplingdebt,onethatisoutofproportionwithwhatatypicalhomeownerinasingle-familyhomewouldeverhavetoface.Anargumentcouldbemadethatsuchstrata-lotownersarebeingconfrontedwithsomethingthatgoesbeyondtheacknowledgedpurposesofaninsurancedeductible,whichareusuallyseenasdevicestoweedoutsmall-valuenuisanceclaimsandtocrackdownonthepotentialforfraud.285

unit;and(b)theunitownerhasthedutyundersection182torepairafterdamage;thecostofrepairingthedamage,totheextentofthedeductiblelimitunderthecondominiumcorporation’sinsurancepolicy,maybeaddedtothecommonexpensespayableinrespectoftheowner’sunit.”).

284.SeeCondominiumPropertyAmendmentAct,2014,supranote32,s55(amendingsection81oftheCondominiumPropertyAct,supranote32,byrepealingpara(h)andsubstitutingnewpa-ra(h),whichwillenableregulationsaddressinginsurance-deductibleissues—notinforce).InDecember2018,theGovernmentofAlbertaannouncedthatitplannedtoadopttheenablingregulationsreferredtointhissectionbyamendingtheCondominiumPropertyRegulation,supranote32,toaddthefollowingasnewsection62.4:“(1)Acorporationmaypayaninsurancede-ductibleinaninsuranceclaimandrecovertheamountofthedeductiblefromanownersubjecttoandinaccordancewiththissection.(2)Subjecttosubsections(3)and(4),anowner,onre-questbythecorporation,isabsolutelyliabletothecorporationfortheamountofthedeductibleinthecorporation’sinsuranceclaimtoamaximumof$50000fordamagethatoriginatesinorfromtheowner’sunitoranexclusivepossessionareaassignedtotheowner.(3)Anownerisnotliabletoacorporationfortheamountofthedeductibleinthecorporation’sinsuranceclaimwheretheclaimarosefrom(a)adefectintheconstructionoftheunitorexclusivepossessionareaassignedtotheowner,(b)damageattributabletoanactoromissionofthecorporation,amemberoftheboard,officer,employeeoragentofthecorporation,oranycombinationofthem,or(c)normalstructuraldeteriorationofthecommonproperty,themanagedpropertyorthere-alpropertyofthecorporation,otherthanpropertythattheownerwasresponsibletorepairormaintain.(4)Nothinginthissectionshallbeconstruedinamannertoaffectacivilactionorotherremedyatlawofanowneragainstapersonwhoisresponsiblefordamagetoproperty.”Theseprovisionsareslatedtocomeintoforceon1January2020.

285.Butnotethattherehavebeenremarksinthecaselawandcommentaryspeculatingthatastratacorporationthatplacesinsurancewithahighdeductiblecouldbevulnerabletotheargumentthatithasfailedtocomplywiththelegislativerequirementtoobtaininsurance.SeeStevens,su-pranote135at454(“Wewouldaddthatifthedeductiblewasexcessive,itcouldbearguedthatthecorporationhadfailedinitsdutytoobtaininsurance.”);BritishColumbiaStrataPropertyPracticeManual,supranote10at§15.24(“[A]failurebythestratacorporationtoobtainthe



Anotherdisadvantagecouldflowfromwhatmighttypicallybeseenasoneofthestrengthsoftheproposal.Oneoftheproposal’sgoalsistocutdownonneedlessliti-gationbyprovidingaclearlegislativeallocationofresponsibilityforthedeductible.Insomecases,though,thisauthorizationcouldencouragestratacorporationstooverreach,leavingownersvulnerabletoclaimsofquestionablemerit.Thiscouldleadtomorelitigation,whichwouldbeparticularlyfrustratingfromtheowner’spointofview.Finally,theproposalwouldlimitstratacorporations’flexibility.Thecurrentlawap-pearstoallowstratacorporationssomelatitudeindealingwithinsurancededucti-blesbyamendingtheirbylaws.Thislatitudemaybeusedinsomecasestotailorprovisionsthatconformtoastratacorporation’suniquefeatures.Thisflexibilityhasbeenlaudedinatleastonecourtcase.286The committee’s recommendation for reform Inthecommittee’sview,goodpointsmaybemadeonbothsidesofthisissue.Onbalance,thecommitteefavouredtheproposaltoamendtheactandexpresslyassignresponsibilityforaninsurancedeductibletoaresponsibleowner.Thecurrentlawappearstogivestratacorporationssomeflexibilityinmanagingthisissue,butun-fortunatelythatflexibilityhasbroughtwithituncertaintyandconflict.Adoptingaconsistentstandardinlegislationshoulddispelthatuncertaintyandcutdownontheamountoflitigationoverinsurancedeductibles.Alargemajorityofconsultationrespondentsagreedwiththecommittee’sproposalonthisissue.Thecommitteerecommends:5.Section158oftheStrataPropertyActshouldbeamendedtoallowastratacorpora-tiontodecidetochargebacktoanowner,iftheownerisresponsibleforthelossordamagethatgaverisetotheclaim,thelesserofthefollowingamounts:(a)thecostofrepairingthelossordamage;(b)thedeductiblelimitoftheinsuranceclaim.

lowestpossibledeductibleinthecircumstancesmayprovideadefencetoanownerwherethestratacorporationisseekingtoclaimthedeductibleamountagainstanowner.”).

286.SeeStevens,supranote135at454(“Whiletheeffectoftheresultwereachistoopenthepossi-bilitythatclaimswillbemadeasbetweenownersforthedeductible,acondominiummayavoidthatresultifitwishestodosobymakingappropriateprovisioninitsdeclaration,by-lawsorrules.Itseemstouspreferabletoleavethequestionofliabilityfordeductibletobedeterminedinthiswaysothatcondominiumownersareabletodesignaschemeappropriatetotheirpar-ticularneeds.”).



Should the Strata Property Act require strata-lot owners to have insurance that covers payment of a deductible under a strata-corporation policy? Brief description of the issue Therearerealconcernsthatrisinginsurancedeductiblescouldharmstrata-lotowners.Thispotentialforharmmightevenbeexacerbatedbythepreviousrecom-mendation.Oneresponsetothisharmmightbetoencouragewhatmanystrata-lotownershavealreadydone:takeouttheirowninsuranceagainsttheprospectofhav-ingtopaythestratacorporation’sdeductible.AproposalforlegislationtoimplementthisrequirementwasconsideredrecentlyinAlberta.Aspartofitslaw-reformproject,ServiceAlbertaasked“[s]houldtheActre-quireunitownerstogetcondominiumunitowners’insurancethatalsocoversthepaymentofanydeductibletheownermayberequiredtopayonaclaimmadeunderthecorporation’sinsurancepolicy?”287Discussion of options for reform Themainadvantagetothisproposedreformisthatitprovidesapracticalmeanstosupportthebroaderreformsthatthecommitteeiscontemplatingforinsurancede-ductiblesinstrataproperties.Thosereformscouldbeseverelyundercutiftheyweretodepend,inthefaceofrisingdeductibles,onstrata-lotownerspayingoutoftheirownpockets.Insuranceforownersisaneffectivewaytohelpensurethatthesystemworksforall.Inaddition,requiringownerstoobtainthisinsurancelikelywouldn’tbearadicaldeparturefromthecurrentsituation.Manyownersalreadyhavesuchinsurance,ei-therbecausetheyhavedecidedindependentlytoobtainitorbecauseitisoneoftheconditionsimposedthroughamortgage.

287.Supranote250at43–44.InDecember2018,theGovernmentofAlbertaannouncedthatit

plannedtoimplementtheproposalbyamendingtheCondominiumPropertyRegulation,supranote32,toaddthefollowingasnewsection60.2:“Acorporationmay,bybylaw,(a)requireownerstopurchaseinsurancewithrespecttodeductiblesthatmaybepayabletoacorporationundersection62.4inrespectofacorporation’sinsurancepolicy,(b)specifytheparticularsofinsurancetobepurchasedforthepurposesofclause(a),and(c)specifytheproofanownermustprovidetothecorporationrespectingtheinsurancepurchased.”(Inforce1January2020.)



Themaindownsideofthisproposalisthatitcouldprovetobedifficulttoenforce.Itwouldlikelybeachallengeforastratacorporationtoknowwhetherornotanown-erhadsuchinsurance.Butevenifitdid,theremayberelativelyfeweffectivemeanstocompelanownertocarryinsuranceagainstadeductibleclaim.Butwithoutanef-fectiveenforcementmechanism,anylegislativeprovisioncouldendupbeingnoth-ingmorethanapapertiger.Theproposalwouldalsohavetheeffectofimposingsomecostsonstrata-lotownersandlimitingsomeoftheirfreedomtoact.Strata-lotownerswholiveinstrataprop-ertieswithrelativelysmallinsurancedeductiblesmightresentthismandateforthesereasons.The committee’s recommendation for reform Thecommitteedecidedthatmandatingthisinsurancecoverageforownerswouldbeausefulwaytoshoreupitsbroaderreformsforinsurancedeductiblesandtopro-videneededprotectionforstrata-lotownersandstratacorporationsalike.Thecommitteewasconcernedabouttheproblemofenforcingsucharequirement.Initsview,thebestwaytoensurecomplianceistomaketherequirementapartofthestandardbylawsforstratacorporations.Thisapproachmightalsoaddresssomeoftheconcernsabouttherigidityofrequiringownerstopurchaseinsurance,asitleavesopentheprospectthatastratacorporationmightdecidetoamenditsbylawsandremovetherequirement.Whileasizablemajorityofconsultationrespondentsagreedwiththecommittee,asignificantminorityofrespondentstookissuewiththecommittee’sproposedre-form.Thecommitteerecommends:6.AnewstandardbylawshouldbeaddedtotheScheduleofStandardBylawsthatre-quiresastrata-lotownertohaveinsurancethatcoverspaymentofadeductibleunderastrata-corporationpolicy.

Issues for Reform—Named Insureds TheStrataPropertyActliststhepeoplewhoareconsideredtobenamedinsuredsinastratacorporation’sinsurancepolicy.Theprimarypurposeoftheprovisioncon-tainingthislististoextendprotectiontothestratacorporation,strata-lotowners,



tenants,andoccupantsofastratalot(thelistednamedinsureds)frombeingsuedbyaninsurerhavingasubrogatedclaim.288Thisprovision(section155oftheact)wasflaggedforconsiderationinphaseoneofthisproject.289Atthattime,itwasnotedthatthesupremecourt’srecentdecisionintheEconomicalMutualcase290hadcausedsomepublicanxietyandconcern.Asabriefdiscussionofthecasereveals,thisanxietydidn’trelatetotheprovision’smainpurpose(articulatingtheno-subrogationrule)butratherrelatedtoasubsidiaryis-sue:thescopeofinsurancecoverageaffordedtoanamedinsured.EconomicalMutualinvolvedalawsuitfordamagescommencedby“threeinfantplaintiffs”againsttheownerofastratalot“who[was]allegedtobeliablefornegli-genceasasocialhost.”291Theplaintiffswereinjuredinamotor-vehicleaccident,whichoccurredafteraguestatapartyheldattheowner’sstratalotleftthepartyand“allegedlycausedamotorvehicleaccidentwhenhisvehiclecollidedwithavehi-cle”inwhichtheplaintiffsweretravelling.292Thelawsuitallegedthattheownerwas“negligentbecausehefailedtosupervisetheamountofalcohol[thedriver]wasservedandconsumedatthegathering,andhefailedtotakestepstoensurethatup-onleavingthegathering[thedriver]wouldnotoperateamotorvehicle.”293Theownerwasinsured“underahomeowner’spolicyissuedbyEconomical.”294Inthisapplication,Economicalaskedfor“adeclarationthat[Aviva,thestratacorpora-tion’sinsurer]isobligedtoparticipateinthedefenceofclaims.”295ThecourtdeniedEconomical’sapplication.Asacommentatornoted,“theunderlyingstratacorporationpolicy(whichwastypicalofmanystratacorporationpolicyword-ings)providedforliabilitycoveragepursuanttoacommercialgeneralliabilitypolicy

288.Seesupranote3,s155.Seealso,above,at41–43(furtherdiscussionofsection155andtheno-

subrogationrule).

289.Seesupranote11at25.

290.EconomicalMutualInsuranceCovAvivaInsuranceCoofCanada,2010BCSC783[EconomicalMu-tual].

291.Ibidatpara1,PitfieldJ.

292.Ibidatpara2.

293.Ibidatpara3.

294.Ibidatpara4.

295.Ibidatpara1.



writtenfor‘forprofit’corporations.”296Byitsterms,thispolicyprovidedcoverageasfollows:“[i]fyouaredesignatedintheDeclarationsas:a.Anindividual,youandyourspouseareinsureds,butonlywithrespecttotheconductofabusinessofwhichyouarethesoleowner.”297Thishighlightedclauseprovedtobecriticaltotheout-comeofthecase.Itsetthelimitsofcoverageundertheinsurancepolicyand,asthecourtconcluded,nothinginsection155anditslistofnamedinsuredscouldbereadasremovingthepolicy’scondition,expandingthelimitsthatthisconditionplacedoninsurancecoverage,andrequiringcoverageoftheownerasanamedinsuredfullstop.298EventhoughtheresultinEconomicalMutualcanbeseenasjustified,thereasoningthatbroughtthecourttothatresultandthefactsofthecaseappeartohavecausedsomeanxietyinthestratasector.Thisanxietyseemstoplayintoafearthatpartici-pantsinthestratasectormaybeunderinsured.Should section 155 of the Strata Property Act be amended? Brief description of the issue InviewoftheseconcernsstirredupbytheEconomicalMutualcase,shouldsec-tion155beamended?Discussion of options for reform Thisissuediffersfrommostoftheotherissuesconsideredinthisreport.Itleadstoamuchmorediffuseandopen-endedinquiry.EconomicalMutual—andparticularlythereactiontoit—couldbeseenascreatingadiscussionontheneedtoclarifysection155.Amendmentsaddingmoredetailtothelawcouldmakeitmorecertain.Greatercertaintyanddetailmighthelpstratacorpo-rationsinfindingappropriateinsuranceproducts.296.BritishColumbiaStrataPropertyPracticeManual,supranote10at§15.9.

297.EconomicalMutual,supranote290atpara17[emphasisadded].

298.Ibidatpara21(“CompliancewiththeSPAissomethingforwhichtheofficersanddirectorsoftheStrataCorporationareresponsible.Theiromissiontofulfilltheirdutiesowedtoanyonein-cluding[theowner]asoneofitsmembers,maygiverisetoaclaimagainstthem.Nosuchclaimhasbeenadvancedinthiscase.Totheextentthatitisdeficient,thecontractofinsurancecannotbevariedoramendedtoensurethatitcomplieswiththeSPA.Thepolicyprovidesonlythecover-agethattheinsurerhasagreedtoprovide.IfthecoveragewhichtheStrataCorporationobtainedisinadequate,ornotincompliancewitharequirementimposedbytheSPA,thatisanissuebe-tweentheStrataCorporationandMr.RattanasanowneranddoesnotimposeadutytodefendonAviva.”[emphasisadded].).



Thatsaid,theremaybesomedownsidestoconsiderinamendingsection155.Thesection’sprimarypurposerelatestotechnicalrulesonsubrogation.299Thesectionappearstobefulfillingthispurpose.Further,anargumentcouldbemadethatEco-nomicalMutualprimarilyraisesissuesthatcouldbebestaddressedbyeducation,notlawreform.The committee’s recommendation for reform Whilethecommitteewasgenerallywaryofproposinglegislativereforminresponsetoasinglecourtdecision,itdecidedthatEconomicalMutualraisesseveralconcreteissuesthathelptobringreformintofocus.Itistroublingtoseeastratacorporationwithaninsurancepolicythatappearedonitsfacetobeill-suitedtothenatureofastratacorporation.Thecommitteewasinterestedincanvassingthepublicforitsviewsonthisconcernandonthesectiongenerally.Thecommitteeitselfdecidedthatlegislativereformshouldn’tbepursuedinre-sponsetoEconomicalMutual.Inthecommittee’sview,thecaseraisesissuesthatprimarilycallforaneducationaloranunderwritingresponse.Thecommitteewasalsoconcernedthatamendingsection155inresponsetoEconomicalMutualcouldunsettletheunderstandingofwhatthestratacorporation’sliabilityinsurancewasintendedtocover.Themajorityofconsultationrespondentsfavouredthecommittee’sproposalonthisissue.Butaminoritydisagreed,sayingthattheywereopentolegislativereformsinresponsetoEconomicalMutual.Thecommitteerecommends:

7.Section155oftheStrataPropertyActshouldnotbeamended.

Issues for Reform—Reporting and Administration Thereareanumberofprovisionsintheactthatsupporttheinsurancemandateandthatdealwithcommunicationofinformationoninsurancefromthestratacorpora-tiontostrata-lotowners.Thissectionofthereportexaminesproposalstofine-tunethesereportingandadministrationprovisions.

299.See,above,at42–43.



Should the Strata Property Act require strata corporations to obtain an appraisal for the purpose of determining adequacy of property-insurance coverage? Brief description of the issue Byrequiringpropertyinsuranceonfull-replacement-valuebasis,theStrataPropertyActeffectivelycallsforstratacorporationstodoanappraisalofthepropertyinor-dertodeterminetheappropriatelevelofcoverage.Buttheactdoesn’tgothefurtherstepofmakingitanactualrequirement.Eventhoughthevastmajorityofstratacor-porationsdoobtainappraisals,somedonot,whichleavesthempotentiallyexposedtobeingundercovered.Wouldcreatingalegislativerequirementtoobtainanap-praisalhelptoreducethisdanger?Discussion of options for reform Thisissuepresentsastraightforward,yes-or-nopairofoptions.Theadvantageofalegislativerequirementisthatitcandrivehomethepointthatanappraisalisnecessary.Evenifmoststratacorporationshavealreadyabsorbedthispoint,it’simportanttorecallthatBritishColumbiahasastrikingdiversityofstratacorporations.Itisn’tdifficulttoimagineself-managedstratacorporationsthathavefailedtograspthenecessityofobtaininganappraisal.Theproposalwouldsetaclearminimumstandardunderthelaw.Theotheroptionistoretainthestatusquo.Underthecurrentlaw,moststratacor-porationssimplygoaheadandobtainanappraisal,withoutbeingrequiredtodoso.Amongthosethatdonotmaybestratacorporationsthathavetakenthemeasureoftherisksanddecidednottoproceedwithanappraisal.Alegislativerequirementwouldrobthesestratacorporationsofsomeflexibilityindecision-making.Inaddi-tion,enforcementofthislegislativerequirementwouldbedifficult.The committee’s recommendation for reform Thecommitteefavoursestablishingalegislativerequirementtoobtainanappraisal.Itwouldsetaclearminimumstandardandhelptoprotectstratacorporationsagainstthedangerofbeingunderinsured.Asolidmajorityofconsultationrespond-entsfavouredthisproposal.



Thecommitteerecommends:8.Section149(4)(a)oftheStrataPropertyActshouldbeamendedbyaddingthewords“asdeterminedbythemostrecentappraisal”after“fullreplacementvalue.”How frequently should an appraisal for the purpose of determining adequacy of property-insurance coverage be required to be carried out? Brief description of the issue Thisissuebuildsuponthepreviousone.Ifastratacorporationisrequiredtoobtainanappraisal,thenshouldthelawgiveguidanceonhowfrequentlyanappraisalmustbecarriedout?Discussion of options for reform Thisissueisratheropenended.Atabasiclevel,eachstratacorporationshouldas-sessitsownneedforanappraisal,sincethestratacorporation’sparticularcircum-stanceswillbethebestguide.Astratacorporationthat,forexample,recentlycom-pletedmajorupgradesshouldobtainafreshappraisal.Thatsaid,givingguidanceonthefrequencyofappraisalswouldsupportthelegisla-tiverequirementtoobtainone.Eventhoughsomelevelofarbitrarinesswouldbeinvolvedinestablishingaprecisenumber,itwouldhelptomakethelegislativere-quirementclearer.The committee’s recommendation for reform Thecommitteeconsiderednumbersintherangeofonetofiveyears.Ultimately,itsettledonthreeyearsasanacceptableminimumstandard.Thecommitteenotedthatthisperiodwouldmatchtheperiodgenerallyapplicabletodepreciationre-ports.300Inthecommittee’sview,theprovisionsettingouttheperiodforrenewingappraisalsshouldbelocatedintheregulation.Theprocessofamendingregulationsissimplerthantheprocessforamendinglegislation.Itmaybenecessarytodrawonthispro-cess,toensurethatthisprovisionremainsinsyncwithdevelopmentsintheproper-tyandinsurancemarkets.

300.SeeStrataPropertyAct,supranote3,s94(2);StrataPropertyRegulation,supranote4,s6.2(7).



Whilethemajorityofconsultationrespondentsfavouredthecommittee’sapproach,asignificantminoritydidwanttoadoptalongerperiodintheregulation.Thecommitteerecommends:

9.Thefrequencyofappraisalsshouldbedeterminedbyregulation.Theregulationshouldinitiallysetthisfrequencyataminimumofthreeyears.Should the Strata Property Act require a strata corporation to inform the owners and tenants as soon as feasible of any material change in insurance coverage? Brief description of the issue TheStrataPropertyActrequiresthestratacorporationto“reportontheinsurancecoverageateachannualgeneralmeeting.”301SomeCanadianprovincesgoevenfur-therinrequiringstratacorporationstoinformownersaboutinsuranceissues.InOntario’sstrata-propertyreviewtheauthorsrecommendedaddingrequirementstoOntario’slegislationfor“promptnotificationofowners”ofanyincreaseinanin-surancepolicy’sdeductibleandif“theboardcannotobtaindirectorsandofficersli-ability,errorsandomissionsinsurance.”302Ontariorecentlyamendeditslegislationtoimplementthisrecommendation.303ShouldBritishColumbiafollowOntario’sleadandrequirethestratacorporationtogivenoticeofmaterialchangesininsurancecoverage?Discussion of options for reform Themainadvantageofthisproposedreformisthatitwouldsupportoneofthekeyfeaturesofinsurancelegislationforstratacorporations:itscoordinatingfunctionforstratacorporations,strata-lotowners,andotherpotentialactorsintheinsurancefield.Whiletheexistinglawcallsforareportoninsuranceattheannualgeneralmeeting,theremaybematerialchangesbetweenmeetings.Thisopensupthepossi-bilityforgapsincoveragetoappear.Increasingtheflowofinformationfromthestratacorporationtoothersshouldreducethisrisk.

301.Ibid,s154(b).

302.OntarioStageTwoReport,supranote251at23.

303.SeeCondominiumAct,1998,supranote32,s105.1(addedtothelegislationbyProtectingCon-dominiumOwnersAct,2015,supranote32,Schedule1,s92).



Thedownsideofthisproposalisthatitdoescreateanadditionaladministrativeburdenforstratacorporations.The committee’s recommendation for reform Thecommitteefavouredrequiringstratacorporationstoinformownersandtenantsofmaterialchangesininsurancecoverage,promptlyafterthechangeoccurs.Initsview,suchaprovisionwillhelptoreducegapsininsurancecoverage.Thecommit-teedecidedthattenantsshouldbeincludedintheprovisionbecausetheyare,byvir-tueoftheact,namedinsuredsonthestratacorporation’sinsurance.304Thevastmajorityofconsultationrespondentsagreedwiththecommitteeonthisis-sue.Thecommitteerecommends:10.Section154oftheStrataPropertyActshouldbeamendedtorequireastratacor-porationtoinformtheownersandtenantsassoonasfeasibleofanymaterialchangeininsurancecoverage,includinganincreaseinanydeductible.

Issue for Reform—The Standard Unit Brief description of the issue Definingthescopeofthestratacorporation’sproperty-insuranceobligationsvis-à-visthoseofastrata-lotownerisasignalissueforlegislationoninsuranceinstrataproperties.TherehavebeenconcernsraisedaboutwhetherBritishColumbia’sap-proachinsection149oftheStrataPropertyAct—coupledwiththelegislativedefini-tionoffixturesintheregulation—isclearenoughtodispeluncertaintiesandpoten-tiallegalissues.305Otherprovinceshaveaddressedtheseconcernsbyadoptinganapproachbasedonastandardunit(stratalot).306Thisapproachattemptstodescribe,insomedetail,the

304.Seesupranote3,s155(b).

305.SeeDix,supranote158at4.

306.SeeSaskatchewan:TheCondominiumPropertyAct,1993,supranote32,ss47(1)(k.1),65(3);TheCondominiumPropertyRegulations,2001,RRScC-26.1Reg2,s11.1;Manitoba:TheCondo-miniumAct,supranote32,s182(6);Ontario:CondominiumAct,1998,supranote32,ss43(5)(h)and56(1)(h);99(6)(repealedbyProtectingCondominiumOwnersAct,2015,supranote32,s89—notinforce);NovaScotia:CondominiumAct,supranote32,s11(2)(2A);Condominium



baselinefeaturesofastratalotwhichwouldbecoveredbythestratacorporation’sinsurance.Movingtoastandard-unitapproachwouldbeasignificantchangeforBritishCo-lumbialawattheleveloflanguageandconcept.Butitcouldalsorepresentamajorsubstantivechangeinthelawaswell.Whiletherearemanywaystoimplementthestandard-unitconcept,theonemostcommonlyusedseesthestratacorporationbe-ingresponsibleforinsuringabareshellofastratalot.Thiswouldsignificantlyalterthedivisionbetweenstrata-corporationinsuranceandowners’insurancethatiscurrentlyinplaceinBritishColumbia.Inviewoftheconceptualandsubstantivechangesthatwouldbewroughtbyadopt-ingthestandard-unitconcept,thecommitteewasreluctanttotakeapositiononthisapproachbeforeconsultingwiththepublic.SointheConsultationPaperonInsur-anceIssuesforStratasitframedthisissueasaquestionfordiscussion.Thisap-proachmeantthattheissuewaspresentedwithoutatentativerecommendationfromthecommitteeandwasleftasaratheropen-endedquestion.Asameanstostimulateresponsesfromthepublic,thecommitteeobtainedadetailedsubmissiononthestandard-unitconceptfromtheInsuranceBureauofCanada,whichwasre-producedintheconsultationpaper.Thissubmissionisagoodintroductiontothestandard-unitconcept,soithasalsobeenreproducedinthepagesofthisreportthatfollow.IBC commentary IBC recommendation for standard definition of strata lot in law

A standard definition of residential strata lot will result in consistency across British Co-lumbia concerning responsibility to repair and maintain, and to confirm the insurance requirements for strata lot owners and the strata corporation. Section 149 of the Strata Property Act requires strata corporations to secure property insurance for common property, common assets, buildings shown on the strata plan, and original “fixtures” installed by the developer as part of the original construction on the strata plan. “Fixtures” are defined in section 9.1 of the Strata Property Regulation:

Regulations,NSReg60/71,s54(1A);NewfoundlandandLabrador:CondominiumAct,2009,su-pranote32,s56(4)–(5).InDecember2018,theGovernmentofAlbertaannouncedthatitwouldbeimplementingthestandard-unitconcept.SeeproposedamendmentstotheCondominiumPropertyRegulation,supranote32,ss20.2(1)(s)and(2),60.1(c),61.1,61.2,62.1,62.2(inforce1January2020).



Definitions for section 149 of the Act

9.1 (1) For the purposes of section 149 (1) (d) and 152 (b) of the Act, “fixtures” means items attached to a building including floor and wall coverings and electrical and plumbing fixtures, but does not include, if they can be removed without damage to the building, refrigerators, stoves, dishwashers, micro-waves, washers, dryers or other items.307

The definition is intended to clarify who (the strata corporation or the owner) is respon-sible for insuring the fixtures installed at the time of the original construction. Issues emerge when strata lot owners replace original fixtures with upgraded fixtures (consid-ered “improvements” in other jurisdictions). Some have interpreted section 149 of the Act and section 9.1 of the Regulations as obliging a strata corporation to maintain insur-ance on all original fixtures installed by the developer, while the strata lot owner would insure any improvements or upgraded fixtures. The current situation makes insurance claims difficult to process, as there may be a mis-understanding among insureds about which policy applies for which part of the loss in cases where original fixtures are replaced, altered or upgraded. This can lead to drawn-out disputes between corporations, owners, and insurance providers. Defining the standard strata lot as being a bare shell (the bare floors, ceilings and unfin-ished interior walls308 of the strata lot) is the most straightforward approach to clarify and confirm the insurance requirements for owners and strata corporations. All strata lot units in a structure would then be finished to the same construction standards, en-suring consistency in the construction quality of the standard strata lots. All additional finishes inside the strata lot not covered in the standard definition would then be con-sidered “improvements.” Strata unit owners would have full control over the improve-ments inside the unit, such as paint colours, cabinets, floor coverings/finishes, applianc-es and lighting fixtures. The change described above would eliminate the current confusion over whose insur-ance responds (the corporation’s or the owner’s) when a claim arises in a situation where owners have made upgrades to their fixtures. It would clarify that the unit owner would be responsible for repairs following damage to the improvements, and the strata corporation would be responsible for repairs following damage to the strata lots and common property.


308.Thebarewallswouldconsistoftheunfinishedinteriorwallsofthestandardunit,suchasun-painteddrywall.



This change would require amendments to the sections of the legislation concerning the corporation’s insurance requirements and the regulation concerning fixtures. IBC and its members do not foresee significant changes to the owner policies in the event the government standardizes the definition of a “strata lot” consistent with that described above. Standard definition of strata lot in bylaws

IBC does not recommend allowing for the standard definition to be defined by the strata corporation’s bylaws . . . . That would put a technical onus on strata corporation board members to draft bylaws on what constitutes a standard definition of a strata lot, which has implications for the financial responsibilities of all parties in the corporation. It is un-fair to consumers to delegate the power of determining financial responsibility to board members who may lack sufficient expertise in drafting such technical rules. Allowing the standard definition to be defined by the strata corporation’s bylaws would also result in inconsistency from one corporation to another, which would create confu-sion for corporations and owners about their respective financial responsibilities. The absence of a clear definition in legislation or regulation leaves owners vulnerable to the discretion of their strata corporation, which may assign to strata lot owners the respon-sibility for repairs that would otherwise be considered common property, if standard-ized. Further, inconsistency in such rules creates confusion for owners with respect to their insurance needs. When owners are unsure about their responsibilities, the likelihood of overlapping insurance coverages, under insurance, or the complete lack of insurance, are greatly increased. Generally, purchasing a strata lot represents a tremendous in-vestment for consumers, and insurance helps protect that investment. Defining a stand-ard strata lot in law makes it easier for owners to understand their responsibilities and assess their insurance needs. Consistent and clear rules would also allow government and strata corporations to focus their resources on educating consumers on the financial risks they face as owners, and ways they can manage those risks. Rather than delegating this power to a strata corporation’s board, IBC encourages the government to establish immutable rules on what constitutes a standard strata lot so that there is a clear delegation of financial responsibility, which will better protect con-sumer investments.



The committee’s recommendation for reform Thecommitteehaswrestledwiththisissuesincebeforethepublicationofthecon-sultationpaperthatprecededthisreport.Aftertheclosingofthatconsultationpa-per’sconsultationperiod,thereweretwomoredevelopmentsrelatingtothestand-ard-unitconceptthatthecommitteehadtoconsider.First,thereweretheresultsfromthecommittee’squestionfordiscussion.Thesere-sultsshowedstrongsupportfortheconcept,withessentiallyafive-to-onemajorityindicatingthattheyfavouredBritishColumbiaadoptingthestandardunit.Com-mentsfrommanyrespondentsshowedthattherewasconsiderableenthusiasminsomequartersforthisconcept.Insum,itwasseenasawaytoimproveadifficultar-eaofthelaw.Second,inDecember2018,Albertaannouncedthatithadreachedamilestoneinitsunfoldingreformprocessbypublishingproposedregulationstosupportlegislativeamendmentsthatithadpassedin2014.309Amongtheseproposedregulationswasaversionofthestandard-unitconceptthatwentfarbeyondanyotherjurisdictioninCanadaintermsofdetailandsophistication.310WhileAlberta’sannouncementcameverylateinthisproject’sreviewofinsuranceissues(itappearedasthecommitteewasreviewingadraftofthisfinalreport),thecommitteewasabletogivetheproposedregulationsaninitialconsideration.Thecommitteewasintriguedbywhatitread.Theproposedregulationsappeartoholdouttheprospectofmakingconsiderableprogressonsomeofthemostvexingissuesinstrata-propertylaw.Thatsaid,Alberta’sproposedregulationsalsodrivehomejustwhatlevelofdetailandsophisticationwouldlikelybecalledfortoimplementthestandard-unitconceptinBritishColumbia.Adoptingthisapproachwouldbeamajorchangeinthisareaofthelaw,sothecommitteewaswaryofleapingintoit.Adaptingsolutionsdevelopedelsewhereissomethingthatshouldonlybedoneaftercarefulstudy.BritishColum-bia’sstrata-propertysectorislargerandmorediversethansectorsfoundinotherprovinces.Inaddition,theStrataPropertyActhasprovisionsthatlackequivalentsinthelegislationofotherprovinces.Bothoftheseareaswouldhavetobemanagedcarefullyinimplementingthestandard-unitconcept.

309.SeeAlbertaNewsRelease,supranote32.

310.SeeproposedamendmentstotheCondominiumPropertyRegulation,supranote32(addingnewss20.2(1)(s)and(2),60.1(c),61.1,61.2,62.1,62.2—inforce1January2020).



Intheend,thecommitteedecidedfurtherstudyandconsultationiswarranted.Giv-enthelatestageofthisproject,thecommitteeisn’tinapositiontocarryonwiththiswork.Andgiventhescaleoftheworkrequired,theprovincialgovernmentisthelog-icalorganizationtotakeoverthistask.Finally,thecommitteenotesthatAlberta’sregulationsareslatedtocomeintoforcein2020.Awatchfuleyeshouldbekeptonhowthesereformsunfoldinthatprov-ince.Thecommitteerecommends:11.ThegovernmentofBritishColumbiashouldundertakefurtherstudyofandconsul-tationsonadoptingthestandard-unitconcept.



Chapter 5. Draft Legislation and Regulations

Draft legislation

StrataProperty(InsuranceIssues)AmendmentAct,2019HERMAJESTY,byandwiththeadviceandconsentoftheLegislativeAssemblyoftheProvinceofBritishColumbia,enactsasfollows:1 Section149(4)(a)oftheStrataPropertyAct,S.B.C.1998,c.42,isamended

byaddingthewords“asdeterminedbythemostrecentappraisal”after“fullreplacementvalue.”

recommendationno.(8)

Comment: The committee recommended this amendment to section 149 of the act in order to set a clear minimum standard in the legislation. This standard is grounded in what is occurring in practice. Most strata corporations obtain appraisals to ensure that their mandated property insurance is “on the basis of full replacement value,” as sec-tion 149 (4) (a) currently directs. But the committee understands that a significant num-ber of strata corporations are failing to obtain appraisals. This failure puts those strata corporations at risk of being underinsured. By making an appraisal a legislative require-ment, this draft provision will reduce that risk. 2 ThefollowingsectionisaddedtoPart9:

Appraisal

149.1 (1) Astratacorporationmustobtain,onorbeforethefollowingdates,anappraisalofthepropertythatmustbeinsuredundersection149:

(a) forthefirsttime,(i) thedatethatiswithin6monthsofthedateofdeposit

ofthestrataplaninalandtitleoffice,or

(ii) theprescribeddate,inallothercases;(b) ifthestratacorporationhas,beforeorafterthecominginto

forceofthissection,obtainedanappraisal,thedatethatistheprescribedperiodafterthedateonwhichthatappraisalwasobtained.



(2) Anappraisalundersubsection(1)mustbecarriedoutbyaper-sonwhoisqualifiedandinsuredasanappraiserinBritishCo-lumbia.

recommendationnos.(8),(9)

Comment: This draft provision is meant to work hand-in-hand with the previous draft provision. That earlier provision established the legislative requirement to obtain an ap-praisal; this provision deals with one of the practical questions that will face strata corpo-rations as they comply with that legislative requirement. The draft provision is meant to answer this question: How often must a strata corporation obtain an appraisal in order to remain in compliance with the legislation? The simple answer to that question is “every three years.” Getting to that answer in the way that the committee wants to implement it is a rather more complex undertaking. The committee favours setting out the applicable three-year period in a regulation. (This is done, below, in a draft provision that the com-mittee recommends adding to the Strata Property Regulation as section 9.11 (3).) The process of amending regulations is more straightforward and less time-consuming than the process of amending legislation. This is a particular advantage for provisions contain-ing time periods, as changing circumstances in the future might call for a simple change to the time period. For this reason, it’s very common to find time periods in regulations and less common to find them in legislation. But a regulation must be enabled by a legis-lative provision. This draft section along with draft section 6 (b), below, accomplish that task. This draft section creates the legislative framework for obtaining an appraisal. It is drafted to encompass the full range of strata corporations in existence now and into the future and to put them on the same footing. The draft section is modelled on an existing provision that creates a legislative requirement to obtain a depreciation report (see Strata Property Act, section 94). Like that provision, this draft provision sets out the minimum standard, which is to require an appraisal every three years. There is nothing the draft provision that would prevent a strata corporation from obtaining more-frequent apprais-als. 3 Section151isamended

(a) byrenumberingthesectionassection151(1)andbystrikingout“may”andsubstituting“must”,and

(b) byaddingthefollowingsubsection:(2) Theinsurancemustbeofatleasttheamountrequiredinthe

regulations.

recommendationnos.(1),(2)Comment: This draft provision implements the committee’s recommendation requiring strata corporations to obtain directors-and-officers insurance. Section 151 of the act en-



ables strata corporations to obtain this insurance. Paragraph (a) of the draft amendment simply changes that existing provision from one with a permissive verb (may) to one with a mandatory verb (must). Paragraph (b) deals with the minimum amount of coverage, which the committee recommended should be $2 000 000. The committee recommend-ed that the actual amount be stated in the regulations (see, below, draft regulations, which propose adding a new section 9.21 to the Strata Property Regulation). Stating the figure in a regulation would be consistent with the law’s approach for other types of man-datory insurance. This draft provision, along with draft section 6 (a), below, enable the adoption of a regulation. 4 Section158(2)isrepealedandthefollowingsubstituted:

(2) Subsection(1)doesnotlimitthecapacityofthestratacorpora-tiontodecidetochargebacktoanowner,iftheownerisrespon-sibleforthelossordamagethatgaverisetoaninsuranceclaim,thelesserofthefollowingamounts:

(a) thecostofrepairingthelossordamage;(b) thedeductiblelimitoftheinsuranceclaim.


Comment: This draft provision is intended to replace the current section 158 (2) of the act, which provides that the characterization of an insurance deductible as a common expense in subsection (1) “does not limit the capacity of the strata corporation to sue an owner in order to recover the deductible portion of an insurance claim if the owner is re-sponsible for the loss or damage that gave rise to the claim.” In place of an authorization to “sue” an owner, this draft provision will authorize a strata corporation to charge back to a responsible owner the lesser of the deductible amount or the cost of repairing the loss or damage. This change is intended to clarify and simplify the law, which has become enmeshed in litigation and obscured by the proliferation of strata-corporation bylaws that purport to supplement the current section 158 (2) by setting out distinct standards of lia-bility in these cases. 5 Section154isamended

(a) inparagraph(a)bystrikingout“and”,

(b) inparagraph(b)bystrikingout“meeting.”andsubstituting“meeting,and”,and

(c) byaddingthefollowingparagraph:

(c) informtheownersandtenantsassoonasfeasibleofanymaterialchangeininsurancecoverage,includinganin-creaseinanydeductible.




Comment: This draft provision amends the act’s provision on review and reporting on insurance coverage. Section 154 of the act already requires a strata corporation to re-view the adequacy of its insurance coverage each year and to report on that coverage at each annual general meeting. To those two requirements this draft provision adds a third: a requirement to promptly inform owners and tenants of material changes in insur-ance coverage. This draft provision is modelled on a similar provision in Ontario’s legisla-tion. 6 Section292isamended

(a) inparagraph(2)(q)byadding“andtheminimumamountoferrorsandomissioninsuranceundersection151”after“section150”andbystrik-ingout“andthepaymentofaninsurancedeductiblereferredtoinsec-tion158”;and

(b) insubsection(3)byaddingthefollowingparagraph:(c.1) prescribingaperiodforthepurposesofsection149.1(a)or(b);.

recommendationnos.(2),(9)

Comment: This draft provision amends section 292 of the Strata Property Act, which lists the subjects on which the act enables the power to make regulations. The draft pro-vision adds two new subjects to the list, to enable the implementation of two committee recommendations. These recommendations concern setting out the minimum amount of directors-and-officers insurance and the frequency of obtaining appraisals. Draft regula-tions setting the minimum amount at $2 000 000 and the prescribed period at 3 years are found, below, as proposed new sections 9.11 and 9.21 of the Strata Property Regulation. The draft provision also removes the authorization to make regulations regarding “the payment of an insurance deductible referred to in section 158.” This regulation-making power has never been used. It is removed because it is inconsistent with the proposed amendments to section 158. 7 TheScheduleofStandardBylawsisamendedbyaddingthefollowingsec-

tion:Insurance

7.1 Anownermustobtainandmaintaininsuranceagainstliabilityforpaymentofthedeductiblelimitofthestratacorporation’spropertyin-surancepolicy.




Comment: This draft provision adds a new section to the standard bylaws, which is in-tended to appear among the other duties of owners, tenants, occupants, and visitors. The new bylaw would create a requirement on strata-lot owners to obtain and maintain insurance against liability for payment of an insurance deductible. This requirement is in-tended to respond to a problem that could arise in the wake of the committee’s proposal to clarify the law on responsibility for insurance deductibles (see, above, draft legislation, section 4). Many strata corporations have seen their deductibles, particularly for damage caused by water ingress, rise significantly. An owner who isn’t adequately insured against this risk could face a crippling liability. Requiring the owner to be insured reduces the risk. But the problem with such a requirement is enforcement. While there is no com-plete answer to this enforcement problem, in the committee’s view making such insur-ance coverage the subject of a standard bylaw holds out the best hope of counteracting the problem. Commencement

8 ThisActcomesintoforcebyregulationoftheLieutenantGovernorinCouncil.

recommendationno.n/a

Comment: This is a standard provision found in British Columbia legislation. It gives the cabinet (formally designated as the “Lieutenant Governor in Council”) the power to con-trol the timing of when the legislation comes into force. A transitional period would help to ensure that people in the strata sector are prepared for the changes that this legislation will bring.



Draft regulations Ontherecommendationoftheundersigned,theLieutenantGovernor,byandwiththeadviceandconsentoftheExecutiveCouncil,ordersthattheStrataPropertyRegulation,B.C.Reg.43/2000,isamendedassetoutintheattachedschedule.

SCHEDULE 1 Part9oftheStrataPropertyRegulation,B.C.Reg.43/2000,isamendedby

addingthefollowingsections:Appraisals

9.11 (1) Thedateprescribedforthepurposesofsection149.1(a)(ii)oftheActwithrespecttoastratacorporationthatisformedafterthecomingintoforceofthatsection,isthedatethatis3yearsafterthedateonwhichthesectioncomesintoforce.

(2) Forthepurposesofsection149.1(b)theprescribedperiodis3years.


Comment: This draft regulation sets the frequency of appraisals required under the committee’s draft section 149.1, above. It sets out a requirement to obtain an appraisal at least once every three years. This requirement is set out in the regulation because regulations are simpler to amend. This quality makes it simpler to adjust the requirement if future circumstances were to favour a longer or shorter period.

Minimum errors and omissions insurance

9.21 Forthepurposesofsection151oftheAct,thestratacorporationmustobtainandmaintainerrorsandomissionsinsuranceforaminimumamountof$2000000.


Comment: This draft regulation is intended to set the minimum level of directors-and-officers insurance. It’s meant to work hand-in-hand with provisions in the draft legislation setting a requirement for strata corporations to obtain directors-and-officers insurance (see, above, at draft section 3 (a)) and enabling a regulation to set the minimum amount (see, above, at draft sections 3 (b) and 6).



Chapter 6. Conclusion Insuranceisakeyconcernforstratacorporations,strata-lotowners,andothers.TheinsuranceprovisionsintheStrataPropertyActareavaluableandimportantpartofthatact.Thisreporthasrecommendedimprovementstothoseinsuranceprovisions.Whilethereportdoesn’trecommendfundamentallychangingthemodelusedtogovernin-suranceandstrataproperties,itdoesrecommendfine-tuningtheoperationofthatmodel.ThecommitteebelievesthattakingupitsproposedreformstotheStrataPropertyActandtheStrataPropertyRegulationwouldbenefitallparticipantsinthestrata-propertysector.



APPENDIX A

ListofRecommendationsThe insurance mandate 1.TheStrataPropertyActshouldrequireastratacorporationtoobtaindirectors-and-officersinsurance.(54–57)2.Forthepurposesofsection151oftheStrataPropertyAct,thestratacorporationmustobtainandmaintaindirectors-and-officersinsuranceforaminimumamountof$2000000.(57)3.Thedefinitionof“majorperils”intheStrataPropertyRegulationshouldnotbeamendedtoincludeearthquakes.(58–60)4.Thedefinitionof“majorperils”intheStrataPropertyRegulationshouldnotbeamendedtoincludeoverlandflooding.(60–61)Insurance deductibles 5.Section158oftheStrataPropertyActshouldbeamendedtoallowastratacorpora-tiontodecidetochargebacktoanowner,iftheownerisresponsibleforthelossordamagethatgaverisetotheclaim,thelesserofthefollowingamounts:(a)thecostofrepairingthelossordamage;(b)thedeductiblelimitoftheinsuranceclaim.(64–67)6.AnewstandardbylawshouldbeaddedtotheScheduleofStandardBylawsthatre-quiresastrata-lotownertohaveinsurancethatcoverspaymentofadeductibleunderastrata-corporationpolicy.(68–69)Named insureds 7.Section155oftheStrataPropertyActshouldnotbeamended.(71–72)



Reporting and administration 8.Section149(4)(a)oftheStrataPropertyActshouldbeamendedbyaddingthewords“asdeterminedbythemostrecentappraisal”after“fullreplacementvalue.”(73–74)9.Thefrequencyofappraisalsshouldbedeterminedbyregulation.Theregulationshouldinitiallysetthisfrequencyataminimumofthreeyears.(74–75)10.Section154oftheStrataPropertyActshouldbeamendedtorequireastratacor-porationtoinformtheownersandtenantsassoonasfeasibleofanymaterialchangeininsurancecoverage,includinganincreaseinanydeductible.(75–76)The standard unit 11.ThegovernmentofBritishColumbiashouldundertakefurtherstudyofandconsul-tationsonadoptingthestandard-unitconcept.(76–81)



APPENDIX B

BiographiesofProject-CommitteeMembersPatrickWilliamsisapartneroftheVancouverlawfirmClarkWilsonLLPandamemberofthefirm’sStrataPropertyGroup.HeisalsoamemberoftheAlternativeDisputeResolutionPracticeGroup.Patrick’spracticefocusesonassistingstratacor-porations,developers,andstrata-lotownerswithdisputeresolution.Heisanexpe-riencedandqualifiedarbitratorandmediatorwhohasmanagednumerousstrata-property,real-estate,andconstructiondisputes.Patrickhaswrittenandpublishedmanyarticlesonissuesimpactingthestrata-propertyindustry,includingconstruction-relatedproblemsexperiencedbyowners,propertymanagers,anddevelopers.Heisaregularcontributortoindustryperiodi-calsandregularlydeliverspresentationsandseminarstoindustrygroups,stratacorporations,andpropertymanagers.Hehasalsopublishedarticlesregardingtheuseandbenefitofarbitrationandmediationasanalternativetocourtandisafre-quentguestinstructorforthemediationcomponentoftheProfessionalLegalTrain-ingCourserequiredtobetakenbyallarticledstudentsinBritishColumbia.PatrickreceivedhisdisputeresolutiontrainingthroughtheContinuingLegalEduca-tionSocietyofBritishColumbiaandtheBritishColumbiaArbitrationandMediationInstitute.HeobtainedhisBachelorofCommercedegreein1973andhisBachelorofLawsdegreein1974,fromtheUniversityofBritishColumbia.VeronicaBarlee(committeememberJuly2014–present)isaseniorpolicyadvi-sorwiththeprovincialgovernment’sOfficeofHousingandConstructionStandards.Forthepastsevenyears,Veronicahasworkedonstratalegislation,regulations,pol-icies,andissues.StratahousingisavitaleconomicdriverandakeyhousingchoiceinBritishColumbia,providingalmost25%oftheprovince’shousingstock.Veroni-ca’sprofessionalbackgroundincludesextensivepolicy-developmentandmanage-mentexperienceintheprivate,public,andnot-for-profitsectors,includingsmallbusiness,fundraising,forest-firefighting,andcommunityservices.HerMBAfromtheUniversityofAlbertaisaugmentedbyongoingprofessionaldevelopmentinpoli-cydevelopment,stakeholderconsultation,publicengagement,andinformationmanagement.



LarryButtress(committeememberOctober2013–June2016)wasfirstlicensedundertheRealEstateActinBritishColumbiain1980.Workingforhisfamily’ssmall,independentreal-estatecompany,hesoldresidentialandmulti-familyrealestate,assistedinthecompany’sproperty-managementportfolio,andachievedhisagent’squalificationsin1982.ThatsameyearhebeganworkingwiththeRealEstateBoardofGreaterVancouverasthemanagerofitsMultipleListingService.In1986,heearnedhisDiplomainUrbanLandEconomicsandbecameamemberoftheRealEs-tateInstituteofBritishColumbiaandtheRealEstateInstituteofCanada.In1988,hewasappointedasREBGV’sexecutiveofficer,apositionhehelduntil1995.In1995,hejoinedJCITechnologiesInc.asdirectorofreal-estateservices.Hesuccessfullyne-gotiatedthatcompany’spreferredsupplieragreementwiththeCanadianRealEstateAssociationthatledtothedevelopmentofmls.ca,nowREALTOR.ca,thelargestandmostfrequentlyvisitedreal-estatewebsiteinCanada.LarryjoinedstaffattheRealEstateCouncilofBritishColumbiain1998asitsman-ager,industrypractice.HehasbeenanactiveparticipantintheCanadianRegulatorsGroupaschairofitsInternetAdvertisingGuidelinesTaskForce,chairofitsElec-tronicTransactionsTaskForce,andvice-chairofitsAgencyTaskForce.In2003–04,Larryalsoservedasthedistrictvice-presidentoftheCanadianDistrictofARELLO,theAssociationofRealEstateLicenceLawOfficials.LarryrecentlyretiredasthedeputyexecutiveofficeroftheRealEstateCouncilofBritishColumbia.J.GarthCambreyhasover28yearsofexperienceintheproperty-managementin-dustryinBritishColumbia.GarthcurrentlysitsontheRealEstateCouncilofBritishColumbia,wasthefoundingdirectorandpastvice-presidentofStrataPropertyAgentsofBCandwasapastdirectorandvice-presidentoftheProfessionalAssocia-tionofManagingAgents(PAMA).HeisanactivememberoftheRealEstateInstituteofBritishColumbiaandisinvolvedwithvariousindustryassociationsandcommit-tees.GarthhasbeenappointedbytheSupremeCourtofBritishColumbiaasanad-ministratorundertheStrataPropertyActon17occasionsandholdsaCharteredAr-bitratordesignationwiththeADRInstituteofCanada,actingasanarbitratorinstra-tadisputes.GarthisalsoinvolvedinvariousadvisorygroupswiththeBritishCo-lumbiagovernment,providingsupportandadvicewithrespecttoprovinciallegisla-tion,includingtheCivilResolutionsTribunalAct.TonyGioventuistheexecutivedirectoroftheCondominiumHomeOwnersAssoci-ationofBritishColumbia(CHOA),aconsumerassociationinBritishColumbiawithover200000memberscomprisingstratacorporations,owners,andbusinessmem-berswhoservethestrataindustry.TonyistheweeklyCondoSmartscolumnistforTheProvince,TheTimesColonist,and24HoursVancouver.Since2002,Tonyhaswrittenover1000columnsandinformationbulletinsdedicatedtostratalivingand



istheco-authorofAPracticalGuidetoBylaws:TheStrataPropertyAct,andUnder-standingGovernance:StrataRulesoforderandproceduresinBritishColumbia.Tonyhasservedasadirector/committeememberfortheHomeownerProtectionOffice,BCBuildingEnvelopeCouncil,CanadianStandardsAssociation,theRealEstateCouncilofBritishColumbia,andcontinuestoplayanactiveroleinresearchandde-velopmentofbuildingstandards,legislationforstratacorporations,andconsumerprotection.WithofficesinNewWestminster,Victoria,andKelowna,CHOAprovidesservicetoitsmembersthroughouttheprovince,promotinganunderstandingofstrataliving,andtheinterestsofstrata-propertyowners.Onaveragetheassociationfields300inquiriesadayfromowners,strata-councilmembers,managersandagents,andde-liversover100seminarsannuallyonavarietyofstrata-relatedtopicsincludinggov-ernance,operations,andadministration.IanHolt(committeememberOctober2016–April2017)startedhiscareerinre-al-estatesalesin1993.Heiscurrentlyareal-estateagentwithRe/MaxRealEstateServicesinVancouver.Ianspecializesandhassoldmanystratapropertiesthrough-outhiscareer.IanisamemberoftheRealEstateBoardofGreaterVancouverandtheCanadianRealEstateAssociationandislicensedwiththeRealEstateCouncilofBritishColumbia.IanhasbeenanMLSMedallionClubmemberfor19yearswiththeRealEstateBoardofGreaterVancouver.From2006to2008,IanwasaVancouverWestsideDivisionboardmemberoftheRealEstateBoardofGreaterVancouver.From2008tothepresent,IanhasbeenanactivememberoftheGovernmentRela-tionsCommitteeattheRealEstateBoardofGreaterVancouver.TimJowettstartedwiththeVancouverlandtitleofficein1988andhasprogressedthroughtheyearsfromanexamineroftitleintohiscurrentpositionofseniorman-ager,E-businessanddeputyregistrarwiththeNewWestminsterlandtitleofficeattheLandTitleandSurveyAuthorityofBritishColumbia.TimcurrentlyoverseestheE-businessteam,agroupofspecialistexaminerswhoareresponsibleforthepublishedpractices,statutoryproceduresandfunctionalityre-latedtotheelectronicfilingsystem.Theteam’sworkinvolvesvariousenhance-ments,changes,andupdatestothesystemsandprocessesthatarebeingdoneinanefforttosupporttheneedsofstakeholders.Hisrolealsoentailsansweringquestionsfromavarietyofstakeholders,primarilylawyers,notaries,landsurveyors,andemployeeswithlocalgovernments.Timhaspresentedandisakeyparticipantatvariousmeetingsandconferencesonland-titleissueswiththesestakeholders.



AlexLongson(committeememberJuly2016–present)startedhiscareerinrealestatein2005,shortlyafteremigratingfromtheUnitedKingdom,wherehehad20years’experienceintheautomotive-engineeringindustryworkingasatestengineerforFordMotorCompany.Hebecamelicensedforstratamanagementin2006withabrokerageintheOkanagan,andsubsequentlybecamelicensedforrentalmanage-mentandasamanagingbrokerin2009.In2012,hejoinedthestaffoftheRealEs-tateCouncilofBritishColumbiaandinhisroleasseniorcomplianceofficerheinves-tigatescomplaints,advisesandeducateslicenseesontherequirementsofthelegis-lation,andsupportstherealestatecouncil’sStrataManagementAdvisoryGroup.HehasalsobeenaguestspeakertotheStrataPropertyAgentsofBritishColumbiaandtheBritishColumbiaRealEstateAssociation,andiscurrentlyaresourcetotheRealEstateCouncilofAlbertafortheCondominiumManagersImplementationAdvisoryCommittee.JudithMatheson(committeememberOctober2013–October2016)startedhercareerinrealestatein1980.Sheiscurrentlyareal-estateagentwithColdwellBankerPremierRealty.Judithhassoldthousandsofstratapropertiesasresales,aswellashavingworkedformanyofthetopstratadevelopersinBritishColumbia.SheisrankedinthetopsevenpercentofrealtorsworldwidewithColdwellBanker,andisaColdwellBankerPremierRealtyTopProducer.JudithisamemberoftheRealEstateBoardofGreaterVancouverandtheCanadianRealEstateAssociation,andislicensedwiththeRealEstateCouncilofBritishCo-lumbia.SheisanMLSMedallionClubMember,RealEstateBoardofGreaterVancou-verQuarterCenturyClubMember,andanAffiliateMemberofLuxuryHomes.com.JudithhasbeenawardedtheColdwellBankerUltimateServiceAward,theColdwellBankerPresidentsCircle,theColdwellBankerDiamondSociety,theColdwellBankerSterlingSociety,andtheColdwellBankerTop50inWesternCanada.ElaineMcCormackisafoundingmemberofthelawfirmWilsonMcCormackLawGroup.Forover20yearsshehasassistedstratacorporations,individualowners,andmanagementcompaniesinthegovernanceanddispute-resolutionprocessesofstratalife.Shepreparesbylawsandprivacypolicies,resolutions,andcontracts.Shehasalsorepresentedclientsincourtandinhuman-rightsmatters.Elaineisactivelyinvolvedineducatingmembersofthestratacommunity.Shefre-quentlydesignsanddeliversseminarsfortheProfessionalAssociationofManagingAgentsandpresentlyservesontheeducationcommitteeofPAMA.Shehaswrittenanddeliveredthelatestfull-daycourseentitled“RealEstateE&OInsuranceLegalUpdateforStrataManagers”usedfortheRelicensingEducationProgramforstrata



managers.ShealsofrequentlydeliversseminarsfortheCondominiumHomeOwn-ers’AssociationofBritishColumbiaandhaswrittenmanyarticlesfortheCHOANews.SheisapastdirectoroftheBritishColumbiaArbitrationandMediationInsti-tute(BCAMI)andcurrentlysitsontheaccreditationcommitteeofBCAMIfortheQArbdesignation.AsaCharterArbitrator,Elainefrequentlyadjudicatesdisputesandusesthisexperi-enceinturnwhenadvocatingforclientsbeforefellowarbitrators.SheisamemberoftheMediateBCCivilRosterandhasreceivedmediationtrainingthroughtheBrit-ishColumbiaJusticeInstitute,theContinuingLegalEducationSocietyofBritishCo-lumbia,andMediateBC.ElainehasalsobeencounselinseveralseminalSupremeCourtofBritishColumbiadecisionsinvolvingsuchdiversestrataissuesastheen-forcementandvalidityofagebylawsandrentalbylaws,thetransitionalprovisionsbetweentheCondominiumActandtheStrataPropertyActwithrespecttoallocationofrepaircosts,andclaimingdamagesforimproperlycalculatedstratafees.Elaine’sdegreesanddesignationsincludeaBAwithamajorinEnglish,minorinLawandtheLiberalArtsfromtheUniversityofCalgaryin1988,anLLBfromtheUniver-sityofBritishColumbia,andaCArbdesignationfromtheADRInstituteofCanadaInc.in1998.SusanMercer(committeememberSeptember2016–present)startedhercareerasanotarypublicin1986inSidney,BC.Duringheryearsofpractice,shespecializedinreal-estatetransactions,whichincludedmanystrataproperties.Asaresult,sheisveryawareofvariousissuesfacedbystrata-propertyowners,aswellasbystrata-propertymanagers.Shehasalsobeeninvolvedinstrata-propertydevelopment.Susanhasservedvariouscommunityandprofessionalboardsandfoundations.ShealsoservedontheBCLIRealPropertyReformProjectCommitteefrom2008–12.In1986,SusanreceivedhercertificationasanotarypublicfromtheUniversityofBritishColumbia.Atthattime,shebecamethefirstrecipientoftheannualBernardHoeterAwardforhighestmarksachievedontheBCNotarystatutoryexams.SheisalsoagraduateoftheUBCUrbanLandEconomicsDiplomaProgram(2002),receiv-ingtwobursariesrecognizingherexcellentmarksuponcompletionoftheprogram.DougPage(committeememberOctober2013–July2014)isthemanagerofhousingpolicyintheBritishColumbiagovernment’sOfficeofHousingandConstruc-tionStandardsandisaformercondoowner.BritishColumbia’sstratalegislationandregulationsarenowoneofhismainresponsibilities.Hehasworkedfor25yearsinvariousaspectsofthehousingfield,includingstintswiththeUrbanInstitutein



Washington,DC,theUSDepartmentofHousingandUrbanDevelopment,BC’sTreasuryBoardstaff,andwithalargeprivatedeveloperandmanagerofapartmentbuildings.DoughasaBAfromDartmouthCollegeandanMAinurbangeographyandadiplomainurbanlandeconomics,bothfromtheUniversityofBritishColum-bia.HeisamemberoftheRealEstateInstituteofBritishColumbia.DavidParkinistheassistantcitysurveyorfortheCityofVancouver.Hehasbeenworkinginthelandsurveyingprofessionforover30yearsindifferentcapacitiesinWhistlerandtheVancouverLowerMainland.HeobtainedhisBachelorofScienceinSurveyingEngineeringfromtheUniversityofCalgaryin1992andwascommis-sionedasaBritishColumbiaLandSurveyorin1995.HeisapractisingmemberoftheAssociationofBritishColumbiaLandSurveyors.DavidwasemployedbyUnderhillGeomaticsLtd.for15yearsandworkedasapro-jectlandsurveyorandwasresponsibleformanagingandsupervisingtheday-to-dayoperationsandprojectsoftheVancouveroffice.HispreferredareasofpracticewhilewithUnderhill’swerelargerdevelopmentprojectsthatincludedtheprepara-tionofair-spacesubdivisionsandstrataplans.Inhiscurrentcapacityastheassistantcitysurveyor,Davidreviewsconventionalandair-spacesubdivisionapplications,subdivisionsofexistingstrataplansandstatutoryrightofwayplans,andagreementsrelatedtocommercialandresidentialdevelopments.AllenReganisthevicepresidentandmanagingbrokerforBaysidePropertySer-vicesLtd.HehasbeenwithBaysidesinceApril1999.Baysideprovidesmanagementservicestoapproximately145stratacorporationsthroughoutthelowermainland,aswellasapproximately40rental-apartmentbuildings.Intotal,Baysidemanagesabout12000strataandrentalunits.PriortoworkingatBayside,Allenheldposi-tionsinthecommercialreal-estatefieldwithGWLRealtyAdvisorsasregionaldirec-torforBritishColumbiaandwithO&YEnterpriseasgeneralmanagerforBritishColumbia.AllenhasaBCommfromtheUniversityofBritishColumbiainurbanlandeconomics(1979)andislicensedinBritishColumbiafortrading,rental,andstratamanagement,allasamanagingbroker.AllenisalsoontheboardofdirectorsoftheStrataPropertyAgentsofBritishColumbia.GarrettRobinson(committeememberApril2017–present)startedhiscareerinreal-estatesalesin1993.HeiscurrentlyarealtorwithRe/MaxCrestRealtyWestsideinVancouver.GarrettisamemberoftheRealEstateBoardofGreaterVan-couverandtheCanadianRealEstateAssociationandislicensedwiththeRealEstateCouncilofBritishColumbia.Garretthaspreviouslybeenasubcommitteememberof



the2009StrataPropertyActReviewthatwasheadedbyAdrienneMurray.GarretthasbeenanMLSMedallionClubmemberfor18yearswiththeRealEstateBoardofGreaterVancouver.Garrettisapastdirector(threeterms)fortheVancouverWestsideDivisionoftheRealEstateBoardofGreaterVancouver.Garrettisastrata-propertyownerandactiveinday-to-daystrata-councilactivity.StanRule(committeememberOctober2013–September2016)isapartnerattheKelownalawfirmofSabeyRuleLLP.HehasbeenpracticinginKelownasinceshortlyafterhewascalledtothebarin1989.Hispreferredareasofpracticearewills,trusts,estates,andestatelitigation.Stanwritesalegalblogentitled“RuleofLaw.”HehasbeenaguestspeakerattheTrialLawyersAssociationofBritishColumbia,theCanadianBarAssociationOkana-ganwillsandtrustsandtheVictoriawillsandtrustssubsections,theOkanaganfami-lylawsubsection,theKelownaEstatePlanningSociety,theVernonEstatePlanningSociety,andhehaspresentedpapersateightcontinuinglegaleducationcourses.StanisadirectoroftheBritishColumbiaLawInstitute.Heisthetreasurerofthena-tionalwillsandestatessubsectionoftheCanadianBarAssociation.HeisamemberandformerchairoftheOkanaganwillsandtrustssubsection,andamemberandaformerpresidentoftheKelownaEstatePlanningSociety.HeisalsoamemberoftheSocietyofTrustandEstatePractitioners.HerecentlyparticipatedasamemberoftheBritishColumbiaLawInstituteProjectCommitteeonRecommendedPracticesforWillsPractitionersRelatingtoPotentialUndueInfluence.SandyWagnerrepresentsstrataownersinmanyareasofpublicconcernaspresi-dentoftheboardofdirectorsoftheVancouverIslandStrataOwnersAssociation.VISOA’smandateiseducation,empowerment,andassistanceforBritishColumbiastrataowners,andhasprovidedfront-lineservicetothemfor45years.ShehasbeenadirectorofVISOAsince2007andhasledtheassociationaspresidentforthepastsevenyears,duringwhichtimeithasgrownsignificantlybothinmem-bershipandinvisibility.SandycurrentlyeditstheVISOABulletin,aquarterlynewsmagazinedistributedtonearly10000VISOAmembers,andleadsVISOA’sworkshopgroup,providingeducationalfull-dayworkshopsonstratabestpractices.SheisalsopartoftheCivilResolutionTribunalstaff.Previously,SandywasamemberoftheCivilResolutionTribunalWorkingGroup(acommitteeworkingonproceduralmattersfortheCRT)andavolunteerontheStra-taManagementAdvisoryGroup(workingwiththeRealEstateCouncilofBritishCo-lumbiatoprovideeducationandinformationforstratamanagers).



EdWilsonisapartnerwiththeVancouverlawfirmLawsonLundellLLPandhaspracticedinthereal-estateandmunicipal-lawfields,withaspecialtyinreal-estatedevelopment,forover30years.EdwasamemberoftheCanadianBarAssociation’sstratapropertycommitteethatworkedwithgovernmentindevelopingthecurrentStrataPropertyAct.EdhasbeenactivelyinvolvedwiththeContinuingLegalEduca-tionSocietyofBritishColumbia.Hehastaughtmorethan15CLEBCcourses,includ-ingcoursesonstrata-propertylaw,resortdevelopment,real-estatedevelopment,anddepreciationreportsforstratacorporations.EdisalsoamemberoftheUrbanDevelopmentInstitute’slegalissuescommittee.



PRINCIPAL FUNDERS IN 2018 TheBritishColumbiaLawInstituteexpressesitsthankstoitsfundersin2018:• LawFoundationofBritishColumbia

• MinistryofAttorneyGeneralforBritishColumbia

• NotaryFoundationofBritishColumbia

• RealEstateFoundationofBritishColumbia

• RealEstateCouncilofBritishColumbia

• RealEstateInstituteofBritishColumbia

• StrataPropertyAgentsofBritishColumbia

• AssociationofBritishColumbiaLandSurveyors

• VancouverIslandStrataOwnersAssociation

• CondominiumHomeOwnersAssociation

• MinistryofMunicipalAffairsandHousingforBritishColumbia

• CoalitionofBCBusinesses

• BCGovernmentEmployeesUnion

• HealthEmployeesUnion

• MinistryofLabourforBritishColumbia

• LawFoundationofOntarioAccesstoJusticeFund

• AGE-WELLNCE(AgingGracefullyacrossEnvironmentsusingTechnologytoSupportWellness,EngagementandLongLifeNCEInc.)

• MinistryofSocialandFamilyDevelopment,AdultProtectionService,Singa-pore

BCLIalsoreiteratesitsthankstoallthoseindividualsandorganizationswhohaveprovidedfinancialsupportforitspresentandpastactivities.

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Report on Insurance Issues for Stratas...Alex Longson (Jul. 2016–present) (Senior Compliance...

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