Leaky Condo Issues

Many may be aware of the 'leaky condo crisis' that hit BC and has been ongoing in BC for many years. The condos, improperly built and designed for BC's climate leaked and caused millions of dollars of damage.

In response, many strata corporations have sued their builders for negligent design and construction of their buildings. However, Canadian negligence law can make it difficult for the strata corporations and owners to recover their damages because the strata corporation and owners didn't hire those builders and designers - the owner developer did.

In the case of The Owners, Strata Plan KAS 3575 v Renascence Enterprises (Shannon Lake) Corp., 2017 BCSC 1336, the strata corporation had sued the companies involved in the design and construction of the buildings, seeking compensation for the defects in the common property, including leaks in the building envelope. One party, Ferta, had been the structural engineer for the strata corporation. They were part of the litigation because some of the concrete in the parking garage had broken or wasn't properly installed.

Ferta applied to have the claim dismissed against it as the strata corporation hadn't alleged that the concrete deficiencies were dangerous. Further, the strata council acknowledged when examined, that the damages claimed from Ferta weren't dangerous.

The Court noted that the strata corporation was seeking damages for 'pure economic loss', or, the cost of repairing the defective work. However, not all economic loss caused by negligence can be recovered in Canadian law. The Court noted that there must be a degree of damages that pose a substantial danger to the health and safety of the occupants or other property before economic loss is recoverable.

It is clear, that the strata must show that the damaged concrete was not only defective, but dangerous. The strata failed to do that and had even acknowledged that the damaged concrete wasn't dangerous.

As a result, the Court dismissed the strata's claim against Ferta and the strata wouldn't be able to recover any money from Ferta for the concrete deficiencies.

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