Date Issued: August 6, 2021
File: ST-2020-009748
Type: Strata
Civil Resolution Tribunal
Indexed as: Focus 2000 Business Ventures Ltd. v. The Owners, Strata Plan KAS 2460, 2021 BCCRT 864
Between:
FOCUS 2000 BUSINESS VENTURES LTD.
Applicant
And:
The Owners, Strata Plan KAS 2460
Respondent
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REASONS FOR DECISION |
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Tribunal Member: |
J. Garth Cambrey, Vice Chair |
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INTRODUCTION
1. This is a strata property dispute about repair expenses and alleged lost rental income.
2. The applicant, Focus 2000 Business Ventures Ltd. (Focus), owns a strata lot (SL11) in the respondent strata corporation, The Owners, Strata Plan KAS 2460 (strata).
3. Focus says it paid for repairs to the building comprising SL11 that were the strata’s responsibility. It also says the strata delayed the repair for about 1 year causing it to lose rental income for that period. Focus seeks the following orders:
a. Reimbursement of $10,853.74 it paid for structural repairs to the building.
b. Payment of $10,640.00 in lost rental income.
c. That the strata is not entitled to charge it $2,437.50 for repair costs the strata paid to its caretaker.
d. That the strata is not entitled to charge it $6,252.34 for unpaid repair costs charged to it by the strata’s contractor.
4. The strata says Focus agreed to pay to upgrade the building’s foundation and change the deck design. The strata also says it paid for deck repairs “in good faith” because the person that completed the deck repairs was also the strata’s caretaker and the strata did not want the caretaker to be owed money by Focus. The strata also says any delay in the repairs were caused by Focus and not the strata. The strata seeks dismissal of the Focus’ claims.
5. Focus is represented by Russel Birt, whom I infer is a director or officer of Focus. The strata is represented by a strata council member.
6. For the reasons that follow, I find the strata must reimburse Focus $2,491.00 in expenses, must not charge Focus for costs the strata paid its caretaker, and must not charge Focus $731.25 for unpaid expenses of its contractor.
JURISDICTION AND PROCEDURE
7. 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.
8. The CRT has discretion to decide the format of the hearing, including in writing, by telephone, videoconferencing, email, 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.
9. 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.
10. 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.
Preliminary Matters
Late Evidence
11. The strata provided an email report from its contractor involved in the repairs, Deer Point Construction (Deer Point), as evidence in this dispute after the evidence submission deadline, during the exchange of written arguments. I acknowledge Deer Point is owned and operated by another owner in the strata and routinely does work for the strata. Focus objects to the late evidence being admitted essentially for the sole reason it was submitted late. However, I find it is relevant to this dispute and that the applicant had the opportunity to review and respond to it. I also find the applicant has not been prejudiced by the late evidence, so I allow it.
Additional claims and requested remedies
12. In submissions, Focus makes a number of additional requested remedies that the strata did not respond to. These include orders that the strata not impose bylaw fines or interest on unpaid amounts against Focus, including at the time of any potential sale of SL11. I have not addressed these remedies in this decision because I find it would be procedurally unfair to the strata to do so, given Focus did not amend the Dispute Notice. Also, given my decision is final with respect to the dispute about repair expenses, I find it is not necessary for me address Focus’ additional requested remedies.
ISSUES
13. The issues in the dispute are:
a. How must the repair expenses be divided?
d. Must the strata reimburse Focus $10,853.74 for repair expenses that are allegedly the strata’s responsibility?
e. Must the strata pay Focus $17,640 as damages for lost rental income?
BACKGROUND
14. In a civil proceeding such as this, as applicant, Focus must prove its claims on a balance of probabilities. I have read all the submissions and evidence provided but refer only to information I find relevant to provide context for my decision.
15. The strata was created in November 2005 under the Strata Property Act (SPA). It contains 17 strata lots in 12 buildings next to a lake. Eight of the buildings are located on the lake shore and comprise single 2-level strata lots. The parties refer to these strata lots as cabins. SL11 is one of these strata lots (cabin 2). The strata plan shows a deck located along the south and west elevation of the building is limited common property (LCP) designated for the use of SL11 owners. The strata plan also shows an entry to SL11 on the east side of the building as LCP for strata lot 10. Based on my review of the strata plan and the photographs of the cabin buildings provided in evidence, I find the entry for SL11 is incorrectly identified on the strata plan and is likely meant to be LCP for SL11. However, nothing in this dispute turns on this LCP designation.
16. Under SPA section 72, the strata is responsible for repair and maintenance of common property (CP). CP is defined under SPA section 1(1) as “that part of the land and buildings shown on the strata plan that is not part of a strata lot”.
17. Section 72 also states the strata may make an owner responsible for the repair and maintenance of LCP the owner has a right to use, and may take responsibility for certain parts of a strata lot. LCP is defined as CP designated for the exclusive use of the owners of 1 or more strata lots. In order to make an owner responsible for LCP or take responsibility for parts of a strata lot, section 72 requires the strata to pass a bylaw to that effect. The strata has adopted bylaw 8 (summarized below) that requires it to repair and maintain LCP, depending on the frequency of the repair or maintenance, as well as certain parts of a strata lot. For completeness, I note the strata cannot make an owner responsible for CP that is not LCP, because there are currently no regulations that permit it as set out in section 72.
18. On December 29, 2009, the strata filed with the Land Title Office (LTO) a complete new set of bylaws that replaced the Standard Bylaws under the SPA. There are no subsequent bylaw amendments filed with the LTO, so I find these bylaws are relevant bylaws to this dispute. I have summarized the applicable bylaws as follows.
2 An owner must repair and maintain their strata lot and designated LCP, except for repair and maintenance that is the strata’s responsibility.
8 The strata must repair and maintain common assets of the strata and CP that has not been designated as LCP. The strata must also repair and maintain LCP if the repair or maintenance ordinarily occurs less often that once per year or, no matter how often the repair or maintenance occurs, if it involves
i. the structure or exterior of a building,
ii. stairs, balconies and other things attached to the exterior of a building, and
iii. fences, railings and similar structures that enclose patios and balconies
The strata must also repair and maintain a strata lot, but the duty to repair is restricted to
i. the structure or exterior of a building,
ii. stairs, balconies and other things attached to the exterior of a building, and
iii. fences, railings and similar structures that enclose patios and balconies
19. In 2014, the strata retained an engineering firm to provide a structural assessment of 5 of the 8 cabin strata lots, including SL11. The report identified what it termed “potential safety issues” with all 8 strata lots and recommended a more detailed investigation to determine structural deficiencies and remediation. It appears that most of the structural deficiencies related to the foundations of these strata lots, which were of post and beam construction, elevating the livable portion of the strata lots above the ground. For SL11, the report also identified BC Building Code issues with stairs and guardrails.
20. In February 2019, the strata raised funds by special levy to complete structural repairs to SL11 and one other cabin strata lot. That work started in about June 2019.
21. From the submissions, the strata approved previous alterations to existing decks and possibly new deck and stair construction relating to SL11, although specific alterations are unclear. The date the alterations were completed is also unclear, but according to Focus, they were completed in about 2007, which is not disputed by the strata.
22. My approach in deciding this dispute is to determine the parties’ responsibility for repairs, including what agreement the parties reached about sharing expenses, if any. I will then review the specific expenses claimed by Focus, considering it has the obligation to prove its claims.
EVIDENCE AND ANALYSIS
How must the repair expenses be divided?
23. I will first address the previous alterations that the parties agree were to a back deck and front deck and stairs next to SL11. I find the back deck refence is the entryway on the east or street side of the strata lot. I find the reference to the front deck and stairs are those on the west or lake side of the strata lot. As noted, details of the prior alterations are not clear, nor is there an executed agreement before me for which Focus takes repair responsibilities for the previous alterations. Based on my review of the strata plan and the parties’ submissions, I find the previous alterations must have been to CP or LCP areas. I say this because the strata plan shows LCP deck areas, and the exterior of the building is CP as defined under SPA section 1(1).
24. The fact that the strata had no agreement with Focus for the previous SL11 alterations is significant given the strata’s responsibility for repair under bylaw 8 noted above. Based on the strata’s bylaws, I find that if an owner alters CP with the strata corporation’s approval, and does not sign an alteration agreement accepting liability for repairs, the altered property remains the strata’s responsibility to repair and maintain. The same applies to LCP if the strata corporation is responsible for the repair under its bylaws. Given the alterations in question here are to CP and LCP, all of which are the strata’s responsibility under SPA section 72 and bylaw 8, the strata remains responsible for their ongoing repair and maintenance, subject to the parties agreeing otherwise, as I discuss below.
25. For the reasons that follow, I find the parties agreed to some general repair expenses, but did not agree to any specific expenses before the SL11 repairs started.
26. Based on the overall evidence, I find the repairs to SL11 started in June 2019. In a June 17, 2019 letter to the strata, Focus set out in detail, the results of a discussion between Mr. Birt and Deer Point, which appears to have occurred just before the repairs began. In the letter, Focus stated its understanding that the strata would take responsibility for the following (reproduced as written):
a. general structural issues pertaining to the cabin itself
b. general repairs to the front landing area of the cabin
c. general repairs to the passageway between cabin 2 [SL11] and cabin 3
d. general repairs to the deck area of the original cabin on the lake side of the cabin. (not including the enhancements made to the deck at the back, by ourselves[Focus]).
e. Removal of tin and former insulation on the underneath area of the cabin.
27. The letter also stated that “general repairs to the deck addition, both structural if and where necessary, and railings and stairs” would be the responsibility of Focus. The letter also confirms Focus would be responsible for all engineering and construction expenses for this area deemed necessary “by the engineer and or [Deer Point], to the satisfaction of the strata”. I find the areas of responsibility identified by Focus are general in nature, vague and lack detail.
28. Regardless, in a June 20, 2019 email from the strata president, the strata confirmed the council had discussed the June 17, 2019 letter from Focus and agreed “in principal” with its content and would draft an “Alterations Agreement” detailing the repair responsibilities for the upcoming repairs. However, I find no such agreement was ever made, which the strata admits in its submissions.
29. I do not agree with Focus that an undated document entitled “Indemnity Agreement for Strata Lot and Common Property Alterations” can be considered an agreement between to the parties. First the document was prepared by Focus and simply included a copy of its June 17, 2019 letter to the strata council and president’s June 20, 2019 reply (collectively June 2019 correspondence) as “details” of the work to be performed. Second, while Focus may have agreed to what was contained in the document, it was not executed or accepted by the strata. Finally, a subsequent identically titled agreement prepared by the strata was rejected by Focus. I consider the undated document prepared by Focus to be a request to the strata to have the work completed and acceptance of Focus to be responsible for some of the work, however vaguely worded.
30. Based on the overall evidence, I find the repairs to SL11 were started based on the June 2019 correspondence between the parties. The strata admits in submissions that it relied on Deer Point to communicate with Focus during the repair and to convey the strata’s position about specific repairs during the repair process. Not only did the strata not have direct communication with Focus, leaving room for miscommunication, it effectively delegated it decision making to Deer Point. Further, email and text exchanges in evidence show that details of the work and costing sharing were discussed between Focus and Deer Point that included comments that the cost sharing “could be worked out”.
31. I take from the strata’s submissions that it retained Deer Point to do the structural repair work. Although there appears to be agreement that Deer Point was retained on a time and material basis, without any fixed price agreement, no copies of contracts between Deer Point and either party were provided in evidence. I also find that the strata permitted Focus to deal directly with Deer Point on any alterations for which Focus took responsibility.
32. Given these loose arrangements, it is not surprising that disputes arose during the course of the repairs about who should be responsible for some of the expenses. Focus expressed that decisions were made “on the fly” as to how best to address problems that arose, and that conversations or agreement with Deer Point were not always documented at the time they occurred. I agree. This resulted in the parties asserting conversations took place with no way of providing supporting evidence. The parties disagree about who initiated some of the changes to the work, and each blames the other. I find I do not have sufficient evidence to determine the specific details of the work or which party initiated any changes. These facts have lead me to take the approach I have mentioned to decide this dispute. Namely, to determine the parties’ responsibility for repairs, including cost sharing agreements, and then reviewing specific expenses claimed by Focus.
33. In summary, and subject to any specific agreement about individual expenses I discuss below, I find the strata accepted responsibility for all expenses except those relating to the back deck alterations and front deck and stairs addition.
Is the strata entitled to charge Focus $2,437.50, the amount it paid its caretaker for work relating to SL11?
34. Focus seeks an order that the strata is not entitled to charge it for expenses it paid its caretaker for work relating to SL11 walkway and railings. The original claimed amount was for $2,437.50 but in submissions, Focus reduced the amount to $731.25 stating the strata had reduced the amount for which it believes Focus was responsible. The expenses include the following.
a. $297.00 (reduced from $990.00) for “walkway expenses”,
b. $434.25 (reduced from $1,447.50) for “caretaker cost” for reconstructing walkway including the railings.
35. The strata did not make a counterclaim, but there is documentary evidence the strata sought to recover 50% of these expenses from Focus as set out in a November 18, 2020 email from the council president to Focus. However, in submissions, the strata agreed it would not seek recovery of these expenses from Focus.
36. Therefore, I find the strata is responsible for $731.25, the amount its caretaker charged for walk and railing work related to SL11. I order the strata must not charge this amount to Focus.
Is the strata entitled to charge Focus $6,252.34, the alleged unpaid repair costs charged to Focus by Deer Point for work relating to SL11?
37. Although Focus’ requested remedy is framed differently, I find it is really seeking an order that the strata must pay Deer Point $6,252.34. This is the amount of invoice 2020-07 dated November 25, 2020. The invoice was provided in evidence and can be broken down into 2 parts. The first part deals with labour charges billed at $50 per hour from June 20, 2019 through August 22, 2020 of $3,606.25 plus a partial box of nails at $69.68. With taxes, this part of the invoice totals $3,856.24. The second part of the invoice deals with applying torch on membrane to the “streetside” and “lakeside” decks and shows expenses of $760.67 and $1,521.33 respectively. With taxes, the second part of the invoice totals $2,396.10, making the total invoice $6,252.34, which is the amount of Focus’ claim.
38. In submissions, the strata agreed to pay the $760.67 for torch on membrane to the “streetside” deck. However, the strata says the work for which the $1,521.33 was charged was requested by Focus as set out in an October 19, 2019 email. Focus disagrees and says it relates to an “unwanted living space” below the cabin, and it did not request the additional space. Focus argues that this additional cost was incurred to make it “whole”, meaning that it should be fully compensated for all losses. On my review an October 19, 2019 email from Focus to Deer Point and the strata council president, I agree with the strata that Focus requested the membrane be installed on the “upper lakeside deck”, along with other changes. Focus also admits to agreeing to this expense in an April 14, 2020 email but later took the opposite view. I do not find this expense was covered in the parties’ general agreement. Therefore, I find Focus is responsible for the $1,521.33 membrane expense. I dismiss its claim for this amount.
39. The strata also says the entire first part of the invoice totaling $3,856.24 has to do with “remedial work for [Focus’] deck”. The strata says that Focus is responsible for the expense because the deck “was falling down and harming the building as a whole”. Focus disagrees and says the invoiced work relates to structural repairs. Focus does not address whether the work involved previously approved alterations, for which it took responsibility. However, Focus does not appear to be certain of its argument using phrases such “appear to relate” throughout its argument suggesting the invoice details are unclear. Therefore, I find Focus has not proved its argument that the first part of the invoice of $3,856.24 relates to structural matters and is the strata’s responsibility. I dismiss this part of Focus’ claim.
40. In summary, I find that the strata is responsible for $760.67 of Deer Point’s expenses relating to the “streetside” deck of SL11 and order the strata to pay Deer Point this amount if it hasn’t already done so. I decline to make the order requested by Focus for the remaining $5,491.67 charged by Deer Point.
Must the strata reimburse Focus $10,853.74 for paid expenses?
41. Focus’ claim for $10,853.74 expenses was itemized in a November 25, 2020 letter to the strata council and can be summarized as follows.
a. $870.24 (777.00 plus 12% taxes) for deck boards
b. $3,675.00 for vinyl siding
c. $191.00 for building permit
d. $367.50 to enclose an area below the main floor of SL11
e. $500 for site cleanup and disposal
f. $800 to backfill the new foundation
g. $650 for dismantling of railing, deck and stairs of deck addition
h. $1,500 for labour to install support joists under the cabin floor
i. $2,300 for labour to install membrane and insulation
42. I find the total of the claimed expenses is $10,681.74, which is slightly less than the amount claimed. I find this is the amount of Focus’ actual claim, which is mostly supported by paid invoices, cheques or bank transfers made by Focus to various trades, including Deer Point.
43. However, I find Focus has not proven the strata is responsible for the majority of the claimed amounts. For example, Focus’ $870.24 claim for deck boards does not identify which deck the boards were for. If the boards relate to an addition for which Focus took responsibility, the expense would not be the strata’s. The same can be said about labour expenses relating to membrane and insulation ($2,300.00), for which there were no details provided. For the amount claimed for vinyl siding ($3,675.00), the strata says it never agreed to share in this expense and that Focus proceeded with the work without approval. This was undisputed by Focus, so I decline to order reimbursement of vinyl siding expenses. Except as noted below, I find the strata did not agree to pay the remaining expenses and I decline to order their reimbursement. Specifically, I do not agree with Focus that the strata had an obligation to restore any areas of CP or LCP to the state they were in prior to the work, which is the stated reason for the $650.00 railing, deck and stair expense associated with the deck alteration completed by Focus.
44. As for the $800.00 expense to backfill the new foundation, I do not agree with the strata that Focus accepted additional expenses for foundation work. While Deer Point may have presented Focus with different foundation options, I do not find there is any evidence Focus agreed to additional expenses if it accepted the foundation that was installed. Also, foundation work is structural work for which I have found the strata is responsible. Therefore, I find the strata must reimburse Focus for the $800.00 backfill expense.
45. I also find the strata is responsible for the $1,500.00 expense relating to joist installation under the main cabin. This is a structural issue, and although there is evidence the expense was discussed, there is no evidence to suggest Focus agreed to take responsibility for it. I order the strata to reimburse Focus $1,500.00 for the joist expense.
46. The evidence confirms the strata agreed to pay the building permit expense, so I order the strata to reimburse Focus $191.00 for this expense.
47. In summary, I order the strata to pay Focus $2,491.00 for the backfill, joist, and building permit expenses.
Must the strata pay Focus $17,640.00 as damages for lost rental income?
48. While I agree Focus was unable to rent SL11 for an extended period of time, there is no evidence that the strata agreed to a July 2019 completion date or caused any delay as argued by Focus. From the evidence, it is unclear when the work was completed.
49. Focus calculated its lost rental income based on $1,400.00 per month over 12 months from August 1, 2019 to July 31, 2020. It did not provide any past copies of rental agreements supporting the monthly rental income amount. Nor did Focus provide copies of rental agreements that it could not honour because of a delay in completion of the work. Also, in a December 26, 2019 email to the council president, Focus stated it had accepted it would not receive income for 2019.
50. For these reasons, I dismiss Focus’ claim for lost rental income.
CRT FEES, EXPENSES AND INTEREST
51. As noted, 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 to deviate from this general rule. I find Focus was partially successful in this dispute and is entitled to one half of the $225.00 it paid in CRT fees, or $112.50. Accordingly, I order the strata to pay Focus this amount.
52. No party claimed dispute-related expenses, so I order none.
53. The Court Order Interest Act (COIA) applies to the CRT. Under the COIA, Focus is entitled to pre-judgement interest from the time it paid the contractor’s invoices for the joist, backfill, and building permit expenses discussed above, to the date of this decision. The respective payment dates are October 10, 2019 for the joist and backfill expenses and August 22, 2019 for the building permit expense. I calculate pre-judgement interest to be $44.55.
54. The strata must comply with SPA section 189.4, which includes not charging dispute-related expenses against Focus.
ORDERS
55. I order the strata must:
a. not charge Focus $731.25, the amount its caretaker charged for walk and railing work related to SL11,
b. immediately pay Deer Point $760.67 for expenses relating to the “streetside” deck of SL11, if it has not already done so.
c. within 15 days of the date of this decision, pay Focus $2,648.05, broken down as follows:
i. $800.00 for backfill expenses
ii. $1,500.00 for labour expenses to install joists below the main floor of SL11,
iii. $191.00 for building permit expenses,
iv. $44.55 for pre-judgement interest under the COIA, and
v. $112.50 for CRT fees.
56. I dismiss Focus’ remaining claims.
57. Focus is also entitled to post-judgement interest under the COIA, as applicable.
58. Under section 57 of the CRTA, a validated copy of the CRT’s order can be enforced through the British Columbia Supreme Court. Under section 58 of the CRTA, the order can be enforced through the British Columbia Provincial Court if it is an order for financial compensation or return of personal property under $35,000. Once filed, a CRT order has the same force and effect as an order of the court that it is filed in.
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J. Garth Cambrey, Vice Chair |