In the recent decision of The Owners, Strata Plan LMS 3539 v Ng, 2016 BCSC 2462, the BC Supreme Court found a strata corporation could be responsible for damage to a strata lot on the grounds of nuisance.
The situation arose from a water leak between the second and third floor of the building where the water caused damage to the Ng’s strata lot. Prior to the flood that caused the majority of the damage, the owner’s tenant had noticed a water stain and reported the water stain to the building manager, on at least two different occasions. A few days later, a major water leak occurred and a substantial amount of water flowed into the owner’s unit. The repair work took approximately 5 months to complete for which the unit was uninhabitable.
The owners sued for the loss of use of the units (the lost rental income) for the five month period.
The case was originally heard in Small Claims Court where the Small Claims Court Judge found the strata corporation to be responsible for the damages on the ground that the strata corporation failed to have adequate insurance coverage. Meaning, the strata corporation had the minimum coverage required under section 149 of the Strata Property Act but didn’t have coverage for loss of use of the strata lots.
The strata corporation appealed the decision of the Small Claims Court Judge and lost on appeal but on different grounds.
The BC Supreme Court found the strata corporation to be liable for the loss of rental income on the basis of nuisance. The Court found that the strata corporation was aware that there was a water leak that was causing damage to the units in question. When the strata corporation failed to repair the water leak in a timely fashion, the strata corporation took a risk to be responsible for any damages that resulted.
In this case, the owners brought the water leak to the strata corporation’s attention, which indicated that a further investigation was required. The strata corporation’s failure to conduct an investigation amounted to an omission to use reasonable care to discover the facts. Therefore, the owners were still entitled to their lost rental income from the strata corporation.
Previous to this case, the strata corporation had to have been found negligent before it could be found responsible to repair and maintain the damage to the strata lot. This is the first case where the strata corporation was found responsible for the loss of use on the grounds of negligence.