Last month I described a story of a purchaser who shared too much information with potential sellers which would undoubtedly put the purchaser at a disadvantage in a negotiation. This month, I’d like to touch on a larger and potentially much scarier situation: insurance for strata-titled properties in BC. The year is just beginning, so perhaps news rumblings of significant insurance premium increases have not landed on your radar, but if you are the owner of a strata-titled property or are interested in purchasing strata-titled property, this will certainly be something to which you will want to pay close attention.
Let’s start with some introductions. Insurance is essentially compensation for loss. As it relates to homes, every home owner is either required or well advised to insure their property against potential loss arising from a variety of circumstances. When we purchase insurance from an insurance provider, it’s called a premium. Each person’s premium (the cost of the insurance) will vary depending on a number of factors which could include the homes replacement value, where it’s located, the plumbing, the electrical, the age or other aspects of the property like the roof, etc… as well the type and extent of coverages selected, and many other factors. Once paid, these premiums are placed in an account available to be drawn from if a claim against the insurance is made.
It is my understanding, at least at this point, that the replacement cost and risk associated with insuring certain strata properties is so high that it has some insurers concerned and has already resulted in drastic increases in insurance premiums for a number of strata corporations including this one in Langley which you may recognize: https://globalnews.ca/news/6363104/langley-condo-owners-strata-insurance-deductible/
According to the Government of BC’s website
“A strata corporation is a legal entity with all of the powers of a natural person who has full capacity. This means that it can sue or be sued, enter into contracts and hire employees.”
There are many different kinds of strata corporations including residential strata corporations. Residential strata corporations are comprised of owners of individual strata lots. These strata corporations are required to have insurance that typically covers buildings on the strata plan, common property such as roof, driveway, etc… and other assets. Each year, strata corporations hold Annual General Meetings (AGMs) at which numerous items are discussed and dealt with including insurance renewal. Each strata lot owner is then required to contribute to the strata corporation’s insurance typically through their payment of a monthly strata fee. The time of year a strata corporation will hold its AGM varies from strata corporation to strata corporation, so perhaps the reason why this is not a bigger story yet is because it is still early in the year and not every strata corporation will have held its AGM, and, therefore, not every strata lot owner may be aware of this emerging concern.
So, if this story is not currently on your radar, it may be something you will want to monitor.
I’ve included a link to a recent Vancouver Sun article below as well as a link to more information about Strata Insurance.
If you would like to know more about how this may affect you as a property owner or tenant, please click the following link: https://caseyduncan.ca/contact-us/ to select a time for us to chat. Alternatively, you can give me a text or email and I will respond to you at the earliest opportunity. In addition, you may want to also reach out to your preferred insurance provider to make your own inquiries as to whether you have the correct coverages in place.