Date Issued: September 18, 2020

File: ST-2020-001053

Type: Strata

Civil Resolution Tribunal

Indexed as: The Owners, Strata Plan BCS3381 v. Kelly, 2020 BCCRT 1060

Between:

The Owners, Strata Plan BCS3381

Applicant

And:

MICHAEL KELLY

Respondent

REASONS FOR DECISION
Tribunal Member:	David Jiang

INTRODUCTION

1.      This dispute is about who must pay for water damage repairs. The respondent, Michael Kelly, owns a strata lot in the applicant strata corporation, The Owners, Strata Plan BCS3381 (strata). The strata charged back the cost of repairs to Mr. Kelly’s strata lot account. It seeks an order for payment of $6,053.32.

2.      Mr. Kelly says the chargeback is impermissible under the strata’s bylaws. He also says the invoice amounts are excessive.

3.      A strata council member represents the strata. Mr. Kelly represents himself.

JURISDICTION AND PROCEDURE

4.      These are the formal written reasons of the Civil Resolution Tribunal (CRT). The CRT has jurisdiction over strata property claims under section 121 of the Civil Resolution Tribunal Act (CRTA). The CRT’s mandate is to provide dispute resolution services accessibly, quickly, economically, informally, and flexibly. The CRT must act fairly and follow the law. It must also recognize any relationships between dispute parties that will likely continue after the CRT’s process has ended.

5.      The CRT has discretion to decide the format of the hearing, including in writing, by telephone, videoconferencing, or a combination of these. I am satisfied an oral hearing is not required as I can fairly decide the dispute based on the evidence and submissions provided.

6.      The CRT may accept as evidence information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in court. The CRT may also ask the parties and witnesses questions and inform itself in any way it considers appropriate.

7.      Under section 123 of the CRTA and the CRT rules, in resolving this dispute the CRT may order a party to do or stop doing something, order a party to pay money, or order any other terms or conditions the CRT considers appropriate.

ISSUE

8.      The issue in this dispute is whether Mr. Kelly must pay for the repair costs charged to his strata lot account.

BACKGROUND, EVIDENCE AND ANALYSIS

9.      In a civil claim such as this, the applicant strata bears the burden of proof on a balance of probabilities. Although I have reviewed all the evidence and submissions, I have only addressed them to the extent necessary to explain my decision.

10.   As discussed below, I find that the strata did not properly charge back repair costs to Mr. Kelly’s strata lot account. I therefore dismiss the strata’s claim. My reasons follow.

11.   The strata consists of a multistory building that provides apartment-style housing. Mr. Kelly owns strata lot 64 in the strata, also known as unit 324. Mr. Kelly’s tenant lives there. According to the strata plan, unit 324 is located above strata lot 28, which I find to be unit 224. On January 4, 2019, the occupants of unit 224 emailed the strata’s property manager to report water coming in through the ceiling.

12.   I find from the evidence that the cause of the water leak was a disconnected drain hose in unit 324. On January 8, 2019, Mr. Kelly emailed the property manager to advise he visited unit 324. He found that the drain hose was not connected to the washing machine. He guessed this could be the cause of the water leak into unit 224. Mr. Kelly also admits the leak came from the laundry drain hose in his Dispute Response form.

13.   The invoices from a restoration company support the same conclusion. The strata hired the restoration company to do emergency mitigation work in both units 324 and 224. This work included removing and replacing affected drywall and applying an anti-microbial solution. The restoration company wrote in its invoices that the water leak was caused by the washing machine in Mr. Kelly’s strata lot.

14.   In total, the restoration company provided 2 invoices for its work dated February 28 and April 11, 2019. Together they equal ($3,252.44 + $2,800.88 =) $6,053.32. The strata paid this amount and charged back $6,053.32 to Mr. Kelly’s strata lot account.

15.   In an April 17, 2019 letter, Mr. Kelly’s insurer wrote the strata to say that it would not pay the restoration company’s invoices. In a May 21, 2019 letter, the strata’s property manager wrote Mr. Kelly. He advised that the strata had charged back the cost of repairs under bylaw 42(3), which I discuss below.

The Law on Charging Back Repair Costs

16.   Section 116(1) of the Strata Property Act (SPA) allows the strata to register a lien against a strata lot for certain unpaid debts, such as strata fees. However, a chargeback of repair costs is not a lienable amount under section 116 or the other provisions of the SPA. For the strata to charge back repair costs to a strata lot account, it must have the authority to do so under a valid and enforceable bylaw or rule that creates the debt. See Ward v. Strata Plan VIS #6115, 2011 BCCA 512 at paragraphs 40 to 41.

17.   The strata says it does not require a bylaw or rule to allow it to charge back a non-lienable amount. It cites the non-binding decision of Crichton v. The Owners, Strata Plan KAS431, 2017 BCCRT 33, to support its argument that the strata may charge back repairs under SPA sections 158(2) or 130 to 133.

18.   I do not find the reasoning in Crichton to be relevant to this dispute. SPA subsections 158(1) and (2), which were discussed in Chrichton, are inapplicable. These provisions are about the strata’s ability to sue an owner to recover an insurance deductible. The strata says it did not file an insurance claim because the invoice amounts were less than the strata’s insurance deductible. Therefore, subsections 158(1) and (2) do not apply here.

19.   I also find SPA sections 130 to 133, which were also discussed in Chrichton, to be inapplicable. These provisions allows a strata corporation to require a person to pay for the reasonable costs of remedying a bylaw contravention. The strata says Mr. Kelly breached bylaw 3(2), which prohibits an owner or tenant from causing damage, other than reasonable wear and tear, to property the strata must repair and maintain.

20.   SPA section 135 says that before requiring a person to pay the costs of remedying a contravention, the strata must give the person written notice of the alleged contravention and an opportunity to respond. In the correspondence before me, the strata did not provide Mr. Kelly with the required notice. The strata’s May 21, 2019 letter only mentions charging back repairs under bylaw 42(3), but no bylaw breach. I conclude the strata was not entitled to charge back repair expenses based on a bylaw breach.

21.   The strata also cites Shura v. The Owners, Strata Plan LMS 1104, et al, 2018 BCCRT 339, which is a dispute about whether the owner negligently caused a water leak. I find Shura distinguishable. The strata corporation in that dispute had a bylaw which allowed it to charge back repairs if an owner or occupant was negligent (Shura at paragraph 28).

22.   In any event, CRT decisions are not binding upon me whereas the court’s decision in Ward is. The key question is therefore whether the strata’s bylaws allow it to charge back the repair costs to Mr. Kelly’s strata lot account.

The Strata’s Bylaws

23.   The strata’s bylaws are the Standard Bylaws under the SPA, with amendments registered in the Land Title Office.

24.   Under strata bylaw 2, an owner is generally responsible for the repair and maintenance of their own strata lot. Strata bylaw 8 says the strata is responsible for repairing part of the strata lots, but this duty is restricted to the structure and exterior of the building, as well as other exterior features (like chimneys) that are not relevant to this dispute.

25.   Under SPA section 68, the boundaries of a strata lot are exactly in the middle of the shared wall between 2 strata lots, unless the strata plan shows otherwise.

26.   Strata bylaw 42(3), referenced above, was added in September 2018. It says the following:

The strata corporation, subject to the terms of the Strata Property Act and these bylaws, shall recover from an owner or tenant (as the case may be) the costs to repair any physical damage to the common property, limited common property or those portions of a strata lot which the strata corporation is required to repair and which is not covered by the strata corporation’s insurance policy for which an owner, tenant an occupant of the strata lot or their guest or invitee are responsible or the source of which originated in that strata lot. The strata corporation may choose to seek recovery (including suing) from only the owner of the strata lot or their guest or invitee. Nothing in this section shall act to restrict the rights of the strata corporation pursuant to s.133 of the Strata Property Act. [Emphasis added.]

27.   Based on bylaw 42(3)’s wording, I find that the strata does not need to prove that either Mr. Kelly or his tenant was negligent. Instead, the strata must show that the water leak originated in Mr. Kelly’s strata lot. The parties agree that it did.

28.   The remaining question under bylaw 42(3) is whether the repairs were to common property, limited common property, or those portions of a strata lot that the strata is required to repair. For repairs to a strata lot, the repairs must also be to a portion of the strata lot not covered under the strata’s insurance policy.

29.   What part of the strata lot does the strata have to insure? Under SPA section 149(1)(d), the strata must obtain and maintain property insurance on fixtures built or installed on a strata lot, if the fixtures were built or installed by the owner developer as part of the original construction on the strata lot. Section 9.1 of the Strata Property Regulation defines fixtures to include floor and wall covering and plumbing fixtures. It does not include washers or dryers if they can be removed without damage to the building. I conclude the floor, wall covering, and plumbing fixtures in the strata lots at issue were part of the original construction as there is no evidence to refute this.

30.   I note that the duty to insure fixtures under SPA section 149(1)(d) is separate from the duty to repair such fixtures. See, for example, the non-binding decision of Lee v. Gjerek et al, 2019 BCCRT 1150 at paragraph 22, which I find accurately sets out the law.

31.   What was repaired? The first February 28, 2019 invoice says that the restoration company did work in the laundry rooms in units 324 and 224. The restoration company removed affected drywall, insulation, and carpeting. This work also included temporarily removing baseboards. The second April 11, 2019 invoice says that further drywall work was done in the laundry rooms in units 324 and 224, including painting. There is a reference to “plumbing” work as well, without further explanation.

32.   Based on the strata plan and SPA section 68, discussed above, I find the repairs were to 2 strata lots and not any form of common property. This is because the restoration company repaired drywall, baseboards, carpets and insulation. These items were all part of either Mr. Kelly’s strata lot or the strata lot known as unit 224. I also find that these repairs were not to any areas of the strata lots that the strata is obligated to repair under bylaw 8, such as the structure or exterior of the building.

33.   I note that SPA section 1 defines common property to include pipes that carry water that are located within a floor, wall, or ceiling that forms a boundary between a strata lot and another strata lot or common property. Pipes wholly or partially within a strata lot are also common property if they are capable of being and intended to be used in connection with the enjoyment of another strata lot or the common property. In this dispute, the invoices provided no detail on the plumbing repairs. I am therefore not satisfied that the plumbing work repaired any common property.

34.   I also find that the repaired areas of the strata lots are covered by the strata’s insurance policy. This is because they affected the floor and wall covering and plumbing fixtures, which must be insured under SPA section 149(1)(d). This is another reason why the repairs cannot be charged back under bylaw 42(3).

35.   The strata also relies on bylaw 42(4), which says that an owner of a strata lot is obligated to pay to another owner the costs to repair any damage to that other owner’s strata lot, for which the owner or tenant of the strata lot are responsible or the source of which originated in the owner’s strata lot. I do not find this bylaw to be applicable. In these circumstances, the bylaw would require Mr. Kelly to pay the owner of unit 224 the cost of repairs. However, the owner of unit 224 did not pay for the repairs at issue and they are not an applicant in this dispute.

36.   Mr. Kelly provided a separate copy of the bylaws. In that copy, bylaw 4(3) appears to allow the strata to charge back the repairs if an owner has been negligent. However, this bylaw does not appear in the strata’s registered bylaws. The strata also did not rely on it or refer to it in submissions. I conclude bylaw 4(3) is not one of the strata’s actual bylaws.

37.   In summary, I find that the strata does not have the authority under its bylaws to charge the repair costs to the strata lot account in these circumstances. The chargebacks for the February 28 and April 11, 2019 invoices of the restoration company are not permitted under the bylaws and are invalid.

38.   Mr. Kelly attempted, unsuccessfully, to have his own insurer to pay for the repairs, but there is no indication Mr. Kelly agreed to be personally responsible to the strata for the repairs. As such, I dismiss the strata’s claim.

39.   I also had some concerns as to whether the strata provided the notice required under SPA section 112 before starting a CRT proceeding. However, given my conclusions, I do not find it necessary to address this issue or whether the restoration company’s invoices were unreasonably high.

40.   Mr. Kelly did not file a counterclaim to seek an order for the strata to reverse the charges at issue. I will leave that for the parties to consider.

CRT FEES AND EXPENSES

41.   Under section 49 of the CRTA, and the CRT rules, the CRT will generally order an unsuccessful party to reimburse a successful party for CRT fees and reasonable dispute-related expenses. I see no reason in this case not to follow that general rule.

42.   Mr. Kelly is the successful party. As he paid no CRT fees and claims no dispute-related expenses, I do not award them to any party.

43.   The strata must comply with section 189.4 of the SPA, which includes not charging dispute-related expenses against the Mr. Kelly.

ORDERS

44.   I dismiss the strata’s claims and this dispute.