Lessons for board members from BC decision: The Owners, Strata Plan KAS 2503 v. Houtstra et al (2019 BCCRT 690)
Similar to recent caselaw in Ontario, The Owners, Strata Plan KAS 2503 v. Houtstra et al is a decision of the BC Civil Resolution Tribunal (“CRT”), which illustrates the need for condominium boards to act "reasonably", and in accordance with the law, when claiming chargebacks from owners.
Houtstra was argued at the CRT, which is Canada’s first online tribunal for resolving condominium and small claims disputes. Our savvy readers may think of the CRT as being similar to Ontario's Condominium Authority Tribunal, however, the CRT has the authority to deal with many more disputes than does the CAT. While CRT decisions are not binding law in Ontario, they still offer valuable lessons regarding how condominium boards ought to conduct themselves.
For our readers that do not know, condominium corporations are referred to as "strata corporations" in British Columbia.
In the Houtstra case, The Owners, Strata Plan KAS 2503 (the “Corporation”) alleged that the strata lot owners’ (the “Houtstras”) tenant had damaged the building’s garage door by driving under it while it was closing. The Corporation charged $1,335.24, the cost of repairing the garage door, to the Houtstras’ strata lot account.
For some additional context in Houtstra, the garage door was setup to only allow one vehicle to enter at a time (in 9 second intervals). This meant that anyone using the garage door after another vehicle would have to wait until the door was fully closed to press their garage door opener and gain entry. The Corporation had no clear signage indicating that this was how the door operated and the door had been run into twice in the preceding 6 months.
The Houtstras' counterclaimed for their legal fees in the amount of $2,479.84, alleging that: the damage was not caused by their tenant but instead because of ineffective sensors, lack of proper signage and the failure of the outgoing vehicle to yield to the incoming vehicle in breach of the Corporation's bylaws.
The Houtstras also alleged that the Corporation had failed to comply with the Strata Property Act, S.B.C. 1998, c. 43 (the “SPA”) by, among other things, not conducting a proper investigation of the incident, including destroying the video evidence, and failing to hold a hearing before levying the charge back. The Corporation argued that the video evidence was mistakenly erased because all video footage was programmed to be deleted after 30 days.
Ultimately, the CRT member found that the Corporation:
did "not have signage to warn drivers that the parkade door must close completely between each vehicle passing through";
"failed in its obligation to install proper signage regarding the safe use of the door… the strata knew there was a problem with users hitting the door but did not improve signage to try to prevent it";
should have "place[d] signage inside and outside the parkade, explaining that the door is timed for one car only"; and
"breached section 135 of the SPA by applying a chargeback of the repair expenses to the respondents' strata lot before they had (a) production of requested garage door maintenance records and (b) their hearing before strata council".
The Takeaway
In our view, the Houtstra decision offers a very important lesson for condominium corporations in Ontario:
Corporations must be diligent and reasonable when dealing with issues of damage to their property. It was clear that there was an issue with the way that the garage door functioned since 2 other vehicles had already collided with it in the previous 6 months. While it is not uncommon to see incidents of damage with garage doors, it is uncommon for it to happen repeatedly and the condominium failed to take diligent and reasonable action to meaningfully address it. The Corporation in Houtstra could have easily replaced the signage to make it clear to residents how the garage door worked or, better yet, it could have changed the way that the door operated to prevent other incidents.
It is important that corporations be conscious of the authorities that permit them to charge back costs to owners. Many corporations have weak indemnifications provisions, or lack the authority under the Ontario Condominium Act, 1998 to charge back certain costs. Before claiming these costs from owners, corporations should seek legal advice regarding whether they are entitled to do so. Failing to take these steps might result in corporations becoming embroiled in needless and costly litigation.