Dear Condo Smarts: What do you do when a strata lot owes the strata corporation $50,000 but the council cannot collect it?
We are an 18-unit townhouse complex in East Vancouver and a grow-op was discovered last fall. The police and the city were involved, and the owner was ordered to effect the repairs. The units on both sides were damaged as well as the offending strata lot.
Because we have grow-op coverage on our insurance policy, the owner requested we file a claim, which we did, and agreed to pay the $50,000 deductible. Unfortunately, we did not get this in writing, and we did not file a lien for the deductible amount.
We were also unaware that the owner was in default of his mortgage payments, so his bank is foreclosing on his strata lot. The bank has advised us that it will not pay the deductible amount because it was not lienable under the act.
Must the remaining 17 owners cover the loss of the $50,000 because the bank had a bad client? Luckily we had enough saved in the contingency for our roof, but now we are looking at special levies for a roof replacement.
Jerrit F.
Dear Jerrit: A grow-op or meth lab is a nasty problem for multi-family buildings. In addition to the grow-op, all of the adjacent units, sometimes including entire buildings, are contaminated, requiring major restoration before they can be occupied again.
The bank is correct in that the strata corporation cannot lien for an insurance deductible; however, in your case the strata corporation covered a cost directly created by the owner and its tenant. You need to consult a strata lawyer to figure out your options and to negotiate with the bank.
Generally when a strata corporation identifies a grow-op or meth lab, it wants to make sure it is in communication with the bylaw officer of the local city or district office to confirm the corporation is included under the order for repairs and restoration.
This is also a good time for legal advice to ensure that all possible damages and risks associated with the contravention are included in the order to repair.
When the strata corporation is included in the order to repair, under section 84 of the Strata Property Act, if the owner fails to do the required work, the strata corporation may legally undertake the required work, and may file a lien for the reimbursement of the cost of the work done under the repair order.
It is important to confirm the details with every party in writing. Many disputes are quickly resolved when a reliable record is produced.
On the topic of drug labs or grow ops, remember that prevention of a problem is easier than cleaning up afterward. Strata corporations are entitled to routinely inspect strata lots for maintenance purposes. The annual inspections of the interior of strata lots to address issues of drainage, mould, window performance or plumbing will achieve a better maintenance program and serve as a deterrent to drug labs.
If a tenant or owner does not provide access, enforce your bylaws. If the strata council meets with absolute refusal from homeowner or tenant to give access to the home to inspectors, that should raise a red flag that you might be dealing with unauthorized alterations or drug manufacturing.