How a late repair invoice stopped a strata from charging a $25K deductible to a unit owner

A condo corporation (strata) cannot charge a $25,000 deductible back to a unit holder for water damage repairs, since the final repair invoice from the restoration firm arrived three years after the leak was discovered — well beyond the two year limit for making a claim.

On Side Restoration didn’t invoice the condo corporation for the deductible until Sept. 11, 2024. In the meantime, “there was nothing preventing the strata from following up with Hub, ClaimsPro, or On Side about paying the deductible,” the B.C. Civil Rules Tribunal ruled in a decision released yesterday. “Yet, it never did so, instead waiting nearly three years before On Side issued an invoice.”

Alison Pillar Parker discovered a water leak in her unit in 2021. She reported the leak to her insurer, which provided emergency restoration services.

Her insurer estimated the total repair costs would be more than the condo corporation’s insurance deductible. So, the strata made a claim with its insurance provider, Hub, for the repairs.

On Sept. 24, 2021, Pillar Parker confirmed in an email to the condo corporation that if its insurer covered the loss, her personal insurance would cover the strata’s $25,000 deductible.

Hub assigned ClaimsPro as the adjuster on the claim. ClaimsPro hired On Side Restoration to complete the water damage repairs.

On Oct. 13, 2021, Hub emailed the condo corporation to advise that if repair costs exceeded the $25,000 deductible, the corporation could charge the deductible amount back to Pillar Parker, whose insurer would cover it on her behalf.

On Side completed the repairs in early 2022. However, it did not issue an invoice to the condo corporation for the $25,000 deductible until Sept. 11, 2024.

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The condo corporation asked Hub to explain the delay.

“On Sept. 24, 2024, Hub advised the strata in an email that a ‘compound of errors on On Side’s part” [led] to the delay,” CRT Vice Chair Kristin Gardner ruled. “The relevant factors included On Side being unable to trace the strata’s proper name, finding the strata’s email address unreliable, initially sending the invoice to the unit owner, and the original On Side project manager leaving the company.

“Hub told the strata that even though the claim was past the limitation period, the strata could still charge the deductible back to the owner…and she could forward it to her insurer.”

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The condo corporation paid the deductible from common funds (its contingency reserve fund). On Oct. 8, 2024, the condo corporation applied the $25,000 as a chargeback on Pillar Parker’s strata lot account. She did not pay it.

The Limitation Act does not allow a claim more than two years after it is ‘discovered.’ The law says a claim is discovered on the first day the person knew, or reasonably ought to have known that:

• the loss or damage occurred
• the loss or damage was caused or contributed to by an act or omission
• the act or omission was that of the person against whom the claim is made
• having regard to the nature of the loss or damage, a court (or tribunal) proceeding would be an appropriate way to remedy the damage.

Pillar Parker said the condo corporation knew all the relevant facts necessary to bring a claim by October 2021. That’s when HUB advised the condo corporation that it would have to recover the deductible from Pillar Parker and her insurer.

The condo corporation says it only discovered the claim against Pillar Parker in October 2024, when it received the repair invoice; that’s when its loss was first “crystallized,” as the CRT decision reads.

Before that final invoice, the condo company argued, it did not know legal proceedings would be necessary because it believed the deductible was ‘being handled’ through various insurers, adjusters, and contractors. It was only in October 2024 that it realized the deductible remained unpaid, the decision says.

The CRT ruled in favour of Pillar Parker, whose insurer had closed the file.

“I find that the strata knew by early 2022 that it would have to pay a $25,000 insurance deductible for the water damage repairs,” the CRT’s decision found. “In coming to this conclusion, I note that On Side’s initial repair estimate from September 2021 was more than $25,000, and there is no suggestion that anyone advised the strata that the repairs might be less than the estimate.

“I also find that the strata knew Ms. Pillar Parker was responsible for paying the deductible amount, in that it could charge back that expense to her strata lot account.”

Although the CRT acknowledged the condo corporation could not have known the actual repair amount until it received the bill, it still should have been more diligent about charging back the deductible amount to the condo unit owner.  

“The strata…chose to pay the deductible, even though On Side issued the invoice after the limitation period had expired,” Gardner wrote. “By that time, Ms. Pillar Parker’s insurer had already closed its file, and she could not claim the deductible through her own insurance policy due to the delay. I find she should not bear the burden of the strata’s poor decision.”