Is a condo corporation liable to property owners for water damage loss?
Q I am the president of our condominium complex. There was a water loss in a third-floor unit that caused water damage in a number of other units. The owners in the damaged units were asked to vacate while the condominium corporation repaired the units. Unfortunately, it has been taking a lot of time and some of the owners are now threatening to sue the condominium complex for loss of income as a result of their tenants not being able to live in their units and for general damages. Is the condominium corporation liable to these owners? What can we do? Help! A Pursuant to section 67 of the Condominium Property
Act of Alberta, any owner may bring a lawsuit against a condominium corporation alleging “improper conduct” as against the condominium corporation for non-compliance with the Condominium Property Act. If improper conduct is found, the court can order damages, costs or any other order that the court considers appropriate in the circumstances.
Generally speaking, an owner has the right to sue their condominium corporation and they would use section 67 as their vehicle to start the lawsuit. To be successful, an owner will have to establish that the condominium corporation had a duty or obligation to do something and that the condominium corporation breached that duty or obligation.
In your example, the condominium corporation has an obligation to insure against the water loss. Therefore, the condominium corporation has a duty to arrange for and supervise the repairs to the units that were damaged as a result of the flood. You will also need to review your standard insurable unit description, which will describe what the condominium corporation's insurance will rebuild or replace following a loss. Things that are not listed in the description will not be covered by the condominium corporation's insurance.
With respect to timing, condominium corporations must act in a reasonable time and with reasonable effort. Obviously, each case will depend on its own facts. If the condominium corporation can show that it acted on a timely basis, that it has its trades lined up and a time frame to complete the work, that is good evidence to show that the condominium corporation is acting reasonably and is taking its duty seriously. These types of issues generally turn on the facts and I would require more facts from you to give you a definitive answer. The answer that I have given you is the general framework in which condominium corporations must act when a loss occurs. Helpful Hint: Condominium corporations have a statutory duty and obligation to repair and maintain common property. Condominium corporations are also required to file the standard insurable unit description at the Land Titles Office to ensure that owners are aware of what will be covered in the event of a loss and what will not be covered. Therefore, corporations are not responsible for making or arranging for repairs to any improvements that were made to the unit and not covered by the description, which will ultimately be the responsibility of the owner. To owners: be sure to ask for a copy of your condominium corporation's standard insurable unit description!
Roberto Noce, K.C. is a partner with Miller Thomson LLP in both the Edmonton and Calgary offices. He welcomes your questions at albertacondolaw@millerthomson.com. Answers are not intended as legal opinions; readers are cautioned not to act on the information provided without seeking legal advice on their unique circumstances.
Follow Noce on X at @Robertnoce.