Monday, August 01, 2005
Good News for Leaky Condo Homeowners: but Vancouver may be the Exception
A recent visit to a Client of mine has spurred me to write this article. This Client bought an apartment in Burnaby, B.C. in 2001 in a building that was at the time considered leakproof. For a variety of reasons, the building has since then developed a big envelope and rainscreen problem with an overall cost of repairs running in the CAD $8 million figure. After receiving a few estimates Strata Council is now involved in the claims submission to the Homeowners Protection Office (HPO). The average special assessment for each property Owner hovers to on or about CAD $40,000.
The good news is that pursuant to current legislation many of these property Owners need not to worry - at least not to worry so much. Since the BC Supreme Court, back in 2001, found the Municipality of Delta liable to cover the costs associated with repairs to the Riverwest Complex, municipalities throughout the Lower Mainland have been put under the microscope. In the Riverwest action it was alleged negligent approval of the application for a building permit on the part of the Municipality of Delta. The action, furthermore, alleged negligent inspection of construction and negligent issuance of the final occupancy permit. The judge - who ultimately awarded CAD $3.15 million to Riverwest - found the municipality to be partly responsible for water damage because it failed to enforce Part 5 of the BC Building Code. Part 5 states, among other things, that municipalities must be actively involved in the examination of building plans and subsequent inspection of construction. In the Riverwest case, the Judge found that Delta had failed to live up to the word of the Code.
This decision of the Supreme Court has had a tremendous impact throughout the Lower Mainland, where the aggregate estimated cost of repairs to leaky condos exceeds CAD $1 billion. City of Vancouver Owners of water-damaged condominiums, however, may not be able to sue for damages proximately caused by negligence in building inspections and issuance of final occupancy permits on the part of City Hall. In 1987 the Vancouver Charter was amended so as to protect the City from responsibility arising out of claims of negligence from Building Code regulations. The amendment states that Vancouver has "no legal duty" to ensure that plans and construction "comply with the By-laws of the City". The amendment, moreover, goes as far as stating that "the City or any officer or employee is not liable for damages of any nature, including economic loss" relating to the enforcement of building codes.
What has become to be known as the "leaky condo crisis" has now been around for about five years. In 1999/2000 the Provincial Government responded with the Barrett Commission of Inquiry into Condominium Construction. Report recommendations resulted in the creation of the Homeowners Protection Office (HPO), now responsible for residential builders licensing, repair loan programs and a PST relief grant for homeowners of leaky condos. The Homeowner Protection Act was also developed.
Luigi Frascati
Real Estate Chronicle
