In Saskatchewan, The Condominium Property Act, 1993 (the "Act") empowers condominium corporations ("Corporations") to recover from certain persons the cost of repairing damage to condominium property. This can be relevant to insurers in the subrogation context given the duty imposed by the Act on Corporations to maintain insurance on condominium units. A Corporation must insure condominium units against major perils and any perils specified in the Corporation's bylaws, and may insure the replacement value of units (including developed bare land units), common property, common facilities, and services units. The purpose of this article is to provide an overview of the principal ways the Act allows Corporations to recover from unit owners, tenants, and others for damage to condominium units, Corporation property, and common property.
As a starting point, section 98 of the Act provides a Corporation the general authority to recover against a unit owner for damage to his or her unit. It states that a Corporation can sue an owner in debt for any sum of money spent by the Corporation for repairs to the owner's unit.
In addition to the right of a Corporation to sue an owner in debt for damage to his or her unit, the Act also provides for recovery against an owner or others for damage to Corporation or common property. One mechanism through which it accomplishes this is found in sections 76 to 79.1(1) of the Act. In Goertz v The Owners Condominium Plan No. 98SA12401, 2018 SKCA 41, the Saskatchewan Court of Appeal briefly commented on these sections, noting that sections 76 – 79.1 are part of a scheme that manages a Corporation's financial risk in relation to damage caused by a tenant. These sections provide for the recovery by a Corporation against an owner for the cost of damage to Corporation or common property in excess of any damage deposit taken. Firstly, section 76 of the Act makes it a condition of an owner’s tenancy that the tenant not cause damage to Corporation or common property. Section 77 of the Act then provides that a Corporation can require a unit owner renting the unit to pay a deposit to be used for the repair and/or replacement of any of the Corporation's property or common property. If a tenant causes damage, section 79.1 of the Act kicks in to allow a Corporation to sue the owner for the amount of that damage over the damage deposit but up to the insurance deductible.
Further, the Act permits a Corporation to recover against owners and tenants for damage to Corporation or common property through section 34(4) of the Act. Section 34(4) of the Act provides a Corporation the authority to sue with respect to any damage to common property, losses to the Corporation, or any losses or damage that affect unit owners jointly. This applies to damage caused by any person, whether an owner or not. In relation to section 34(4), the Saskatchewan Court of Queen's Bench in Canterbury Lofts Condominium Corp. v Dureau, 2016 SKQB 410 has held that unpaid fees by a unit owner fall into this category.
Sections 65(6) and 65(7) of the Act also provide that, if an owner or tenant causes damage to a unit, the lesser of the repair costs and the deductible limit can be added to the common expenses payable by the owner of that unit. Reading sections 34(4), 65(6), and 65(7) together, then, provides Corporations the authority to sue persons for damage to property or owners for recovery of common expenses assessed in relation property damage.
It is also worth noting that section 99 of the Act provides that, if the Corporation's bylaws so authorize, a Corporation can sue an owner or tenant in Small Claims Court for the contravention of a bylaw. If, as a result of the breach of a bylaw there is damage to common property, the Act authorizes the corporation to seek compensation for the damages up to the lesser of the insurance deductible and the Small Claims maximum award of $30,000.00.
In summary, the Act provides Corporations and their respective insurers with many tools to assist with recovery when there has been damage to the condominium property. Given the recent surge in the Saskatchewan condominium market, condominium related litigation resulting from property damage issues is likely to become more common and reliance on these sections of the Act will be critical.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
