Fire Sprinkler Defects and Warranty Coverage

It may not come as a surprise to everyone, but new strata corporation buildings have warranty coverage. However, it may be a surprise that the warranty coverage has very tight timelines to notice defects and issue a written claim to the warranty provider.

Under the Homeowner Protection Act, builders are required to obtain warranty coverage for the strata corporation they build. Once the building is complete, a warranty certificate is issued which sets out the basic information of the warranty coverage. Typically the coverage periods are as follows:
15 months for common property
2 years for defects in materials and labour supplied for the gas, electrical, plumbing, heating, ventilation and air conditioning delivery and distribution systems
5 years for building envelope
10 years for structural defects
All claims regarding defects must be sent in during the above warranty coverage periods. If a strata corporation is late sending in a claim, the claim can be denied completely, even if it was a warranty covered defect.

In the case of The Owners, Strata Plan 4249 v Travelers Insurance Company of Canada, 2018 BCSC 114, the main issue was whether the fire sprinkler suppression systems fell under the 15 month common property or the 2 year defect coverage defects in plumbing delivery and distribution system.

Shortly after the strata corporation was completed, the sprinkler system failed and caused over $400,000 in damage to the building. However, by the time the strata had notified the warranty company, the 15 month coverage had been expired for at least 4 months. The warranty company denied coverage saying that the sprinkler system was covered under the 15 month policy. The strata corporation disagreed and said that the sprinkler system was part of the plumbing system, had 2 years of coverage, and notice was provided in time.

In a 38 page decision, the Court found that the sprinkler system was part of the plumbing system, and was covered under the 2 year warranty.

The Court noted:
. . . I find that the essence of the Sprinkler System is the delivery and distribution of water through pipes located in the [strata]. That, in my opinion, is sufficient to bring the Sprinkler System within the term "plumbing delivery and distribution system," as that term is used in both the Minimum Standards and the Certificate. In my view, it is immaterial that, with the Sprinkler System, that the purpose of the delivery and distribution of water is fire suppression. There is nothing in the Minimum Standards that suggests the purpose of delivery or distribution . . . is a relevant consideration.
The Court also did not consider it relevant that plumbing systems and sprinkler systems are considered different sections of the Building Code.

As a result, the warranty company and the strata corporation would have to determine the level of damages covered under the insurance policy or apply further to the court for a determination on how much of the strata corporation's damages were covered.





TAEYA FITZPATRICK

Taeya Fitzpatrick has specialized in strata law for most of her practice, has won cases for her clients in the BC Supreme Court, the BC Court of Appeal, and assisted with a client succeeding in defending a Civil Resolution Tribunal claim. Taeya offers full services to a strata corporation or a strata owner from redrafting the strata’s bylaws, collection of outstanding strata fees or other charges, issues with bylaw enforcement, to amending the strata plan. For more information on the services provided, you can reach Taeya by email, phone: 250-762-6111, or at her Web Page

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