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As per the January 26, 2021 article that SVR Lawyers (www.svrlawyers.com) published, failure to maintain appliances is an ‘act or omission’ triggering owners paying insurance deductibles. In 2019, an Alberta court held that the failure to have a furnace inspected following its installation and failing to regularly maintain it, meant that the owner had committed an ‘act or omission’ which rendered them responsible for the cost of repair, up to the insurance deductible (OCP No. 7721985 v. Breakwell).

Scott Venturo Rudakoff LLP (SVR Lawyers) have been helping condominium corporations and private individuals resolve their most important and complex legal challenges since 1986. With a team of highly skilled and determined lawyers, they remind all condo owners about the importance of maintaining appliances within their home.

SVR Lawyers broke down the 2019 Alberta case, in their article “Water Water Everywhere! But Who Should Pay the Deductible?” where the owner (Breakwell) was using her unit as a rental property. The owner had attended to show the unit on December 29, and on December 31 the circuit board on the unit’s furnace malfunctioned when no one was present in the unit. This malfunction caused a loss of heat and, ultimately, two pipes in the furnace room froze and ruptured. The furnace was only three years old, and there were no issues with the furnace prior to the incident. The loss was exacerbated due to the fact that the owner could not locate the water shut off valve for 45 minutes. The shut-off valve had been covered up by cabinetry units, allegedly in breach of the condominium’s bylaws. 

How The Alberta Case Has Set A New Precedent

A new Ontario case (Lozano v. Toronto Standard Condominium Corp. No. 1765) referenced the 2019 Alberta case decision, that an owner failing to maintain a toilet that had a slow leak constituted an ‘act or omission’ and the owner was responsible for the repair cost up to the insurance deductible. It was stated in the analysis that Condominium owners are responsible for the care and upkeep of their units.

“Where damage arises from a lack of care, unit owners will be held financially responsible. “

COURT FILE NO.: CV-19-628257

This case was more straightforward than that in the Breakwell case. In this incident, the owners were aware that the toilet had previously malfunctioned and chose not to employ a plumber to repair the issue. Even still, the Breakwell Court determined that the owner’s act or omission did not have to be negligent – and the damage did not have to be foreseeable – in order to make them liable for the cost of repair.

Take Aways To Remember

1. “Act or Omission” wording in Bylaws may not mean the corporation has to prove negligence. A full review of the bylaws is required.
2. In the event of a loss from an appliance or plumbing/heating system in their unit, owners may need to provide evidence that they properly maintained their appliances and plumbing and heating equipment.
3. Owners need to make themselves aware of the location of shut-off valves (and similar essential fixtures) in their units.
4. This does not mean that all maintenance issues resulting in a loss can be charged back to the owners. Each potential insurance chargeback needs to be reviewed on its own circumstances along with the Condominiums bylaw wording.

As per the new CPA Regulations on deductibles, it states:

an owner, on demand by the corporation, is absolutely liable to the corporation for the amount of the deductible in the corporation’s insurance claim for damage that originates in or from the owner’s unit or an exclusive possession area assigned to the owner

Condominium Property Regulation (s. 62.4)

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References:

SVR Lawyers Article
Court Case (OCP No. 7721985 v. Breakwell)
Court Case (Lozano v. Toronto Standard Condominium Corp. No. 1765)
“Water Water Everywhere! But Who Should Pay the Deductible?”
Condominium Property Regulation

Not Legal Advice:  This article is provided solely for information purposes.  The information presented does not constitute legal or professional advice and should not be relied upon for such purposes or used as a substitute for legal advice.