Recently, we wrote about the Shen decision which is causing a fair bit of consternation for Owners and Councils at Strata Corporations. As we indicated in our post, we believe that meetings held in person to comply with the Strata Property Act and encouraging Owners to submit proxies (restricted or otherwise) to reduce the number of attendees as much as possible, were unlikely to be overturned. Of course, we are not a substitute for legal advice and many lawyers within the Strata community have begun to weigh in on the conversation.
We are once again taking the opportunity to republish one of our more popular articles (originally published October 16, 2014) currently with more than 50,000 views. We refer clients (both Strata Council members and Owners) to this guidance on a regular basis and we feel it important to re-post from time to time as a reminder of the obligations of the Strata Corporation versus those of the effected Owner(s) with respect to repairing and maintaining Strata Lots when there is an insurable loss.
A Chinese language translation of this article can be found here.
Strata Corporations often wrestle with the question of who is responsible for repairing a Strata Lot when there is water damage as a result of a leak, drainage backup or other calamity. Included below for your benefit is advice offered by Clark Wilson LLP on the subject, which we hope will provide some guidance. Special thanks to them for offering this advice.
Budget Considerations – Most Strata Corporations have year-ends that occur in the months of November, December and January which is by far the busiest time of year for our firm when it comes to Annual General Meeting and budget preparation. While we have written a great deal about the COVID-19 related challenges to AGMs themselves, we feel it important to point out some general budget considerations as well.
In November 2019 we began publishing a series of articles on our blog regarding significant increases in insurance premiums and deductibles for strata corporations across the Lower Mainland. We wrote several follow-up articles in December 2019 and then again in June 2020. Since our initial article, the subject has become a continuing conversation in the media, which led to some high profile government legislative changes. In that first article, we asked that you please try not to shoot the messenger and here we are with the same plea amid more unwelcome news.
Dear Strata Councils,
We are half-way through August and into the home stretch of summer. While there is thankfully less day-to-day urgent information to pass along as the industry gets acclimatized to the challenges being faced by Strata Corporations, we remain involved with various working groups tackling the issues as they come up and more guidance is gathered.
Our firm, as an industry leader, is taking part in regular calls led by BC Housing Policy Branch to assist with strata-COVID-19 related policy and potential legislation changes, as well as how to address the current insurance crisis. With that in mind, we’d like to offer the follow important update on the latest developments around COVID-19 and how they impact your Strata Corporation.
Draft Policy Documents (Sample Mask Protocol/Pool Policy/Outbreak Checklist)
The Condominium Homeowners Association (CHOA) has been kind enough to provide updated versions of a number of draft documents to be posted/circulated at the direction of strata councils that wish to have these sorts of policies to be implemented. These include a Sample Mask protocol, a Draft Pool Policy and ‘What to do if we have a COVID-19 Outbreak’. While Stratawest has clients who have already developed similar protocols, the CHOA versions and other updates can be found here: https://www.choa.bc.ca/whats-happening/
Currently, it is up to each Strata Council to consider implementing a Rule requiring mask usage while on the Common Property. At this time, such measures have not been mandated by any health authorities in BC (however, such policies are in place in other jurisdictions around Canada). Anecdotally, CHOA has noted that some large downtown core and Coal Harbour strata corporations have put a mandatory mask policy in place for common areas and there has been near total buy-in with the residents. Of course, enforcement of such Rules presents a significant challenge and it is no secret that the subject of masks has become a very sensitive subject for many. More information on the wearing of masks to prevent spread of the virus can be found here http://www.bccdc.ca/health-info/diseases-conditions/covid-19/prevention-risks/masks
It is worth noting that the various committees and industry groups we are involved with have yielded much information over the past month on what strata corporations are doing with respect to deciding whether or not to open fitness facilities and other amenities. In short, while many in the Lower Mainland have re-opened there have also been a number of cases of reversing this decision due to the costs, frustrations in dealing with residents not complying with the required rules, and the potential liability concerns. In some properties, legitimate outbreak concerns have led to gym closures. Again, while we appreciate that many residents are asking for amenities to reopen this is completely a decision to be made by your strata council with the best interests of all residents in mind. We encourage you to take a cautious and thoughtful approach considering the elevated risk associated with reopening shared common spaces and the number of positive COVID-19 cases on the rise, particularly here in the Lower Mainland.
Insurance Crisis and Bill 14
Many of you have already been impacted by significant increases in your insurance premiums at your most recent policy renewal. This topic has been covered in great detail in previous blog posts from our firm. In an attempt to address some of the concerns and perceived underlying factors impacting insurance costs, the Provincial government has passed Bill 14 amending various Sections of the Strata Property Act which has received royal assent. The first and immediate provision will be the requirement to advise your ownership of any material change in coverage, cost, deductible, etc. as soon as feasibly. The Bill will also see amendments and new Regulations prohibiting referral fees and improve disclosure on changes in the insurance policy wordings. As previously stated, Stratawest has never received insurance commissions of any type in all of our years of placing insurance for clients and we are very hopeful these changes (apparently to be enforceable later in the fall) will actually perform as intended to end this practice carried out by a relatively small number of brokerages in our industry.
With regard to the actual effect these changes contemplated in Bill 14 may have, we’d caution not to expect them to significantly impact or influence the cost of strata insurance. This is a starting point and the Provincial government trying to do something (or be seen as doing something) to improve the position of consumers dealing with a complicated supply/demand situation in a private industry over which they have relatively little influence. There is a balance being struck between trying to make positive change and not ‘scaring off’ those underwriters currently involved in the BC market and discouraging them from even offering coverage for subscription policies in the first place.
On a related matter, we are pleased to note that members of the Board of Directors for Strata Property Agents of BC (SPABC) have been invited by the BC Financial Services Authority (BCFSA) to take part in stakeholder engagement sessions about the sustainability of the strata property insurance market in British Columbia. It is great to have the opportunity to advocate for our clients and be included as experts in our area of the industry to discuss topics such as how to bring the insurance market back to a healthy state, ways to better educate consumers on strata insurance, efforts to improve information disclosure at unit point of sale, and Home warranty coverage. We will report on this information becomes available and is allowed to be shared.
Electronic Annual General Meetings
As everyone is aware, the current State of Emergency in place has eased a number of restrictions and allowed for strata corporations to hold General Meetings electronically. While many strata corporations continue to handle these meetings by discouraging in-person attendance and allowing Owners to submit a “restricted proxy” form for another individual to vote on their behalf, the option of meeting electronically will be in place for at least 90 days following the end of the State of Emergency. Furthermore, there is the strong potential for this to be extended by way of a Regulation on the recommendation of the Policy and Legislation Branch until June 2021.
We have had great success with clients holding Annual and Special General Meetings by allowing owners to vote via “restricted proxy” (often with a Town Hall style meeting held in advance to allow owner’s to discuss contentious issues and ask questions) and we are here to assist those clients choosing to hold their General Meeting entirely electronically. However, as we and other brokerages have noted this poses some challenges since the tools have not yet evolved to a point where they can approximate the experience of an in-person AGM. While Stratawest can assist with the administration of these electronic meetings, and we are doing our best to stay on top of the latest technology, our Property Managers are not experts in this area and the strata council will need to be involved should this be the route you choose to take.
Thank you for all that you are doing for your fellow owners during this extraordinary time, enjoy the rest of your summer, we will be in touch again soon.
Dear Strata Councils,
We hope you are managing to enjoy the summer despite the unusual circumstances we all find ourselves in. We’d like to offer the follow important update on the latest developments around COVID-19 and how they impact your Strata Corporation:
As noted in recent media reports, the Province has announced (and is enacting) a number of legislative measures that the government intends to mitigate the dramatic increase in insurance premium costs and related deductibles being borne by Strata Corporations since approximately November of last year. We have written about these sudden and significant increases on a number of occasions and recommend the following blog posts for background reading:
- Insurance Market Updates – June 2020
- 2019-2020 Insurance Renewals;
- 2019-2020 Insurance Renewals (Continued)
You can find the full text of the announcement at the Government’s website.
Dear Strata Councils,
Our latest update is targeted at one specific issue, Worksafe BC’s requirements for Employers.
WorksafeBC has mandated that all Employers, including Strata Corporations, are required to develop a COVID-19 Safety Plan “that outlines the policies, guidelines and procedures they have put in place to reduce the risk of COVID-19 transmission”.