Imagine this. A fire has occurred within a strata unit and caused damages to the unit. The subsidiary proprietor (SP) filed a claim under the Damage Policy carried by the MCST as provided under Section 69 of the Building Maintenance & Strata Management (BMSMA).
The repair cost for the damages at the unit came up to about $3k. However, the excess listed in the Damage Policy amounted to $5k. The insurance company responded that there would be no financial involvement since the excess of the policy was higher than the repair cost and therefore no compensation to be payable.
The BMSMA is silent on who is responsible for payment of excess.
Para 15 of the Prescribed Bylaw requires an SP to maintain his lot. Section 29 of the BMSMA requires an MCST to maintain the common property. The fire occurred within the SP’s unit and damaged only the interior of the unit. There was no damage caused to the common property.
The Management Fund of an MCST is established under Section 38(1) for the purpose of repairs and upkeep of the common property stated under Section 39(1).
I could not find any local case law on the burden of excess in insurance for MCSTs. I found two old cases from the British Columbia (BC):Strata Plan LMS 2835 v Mari and Strata Plan KAS 1019 v Keiran, Simkus and Wawanesa. While theirs might be a different legal system and different types of damages, their courts ruled that the SPs then were responsible for the damages in their own units and therefore the excess.
